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| The Guardian view on Britain’s charities: building trust in trustees | The Guardian view on Britain’s charities: building trust in trustees |
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| The House of Commons report into the collapse of the Kids Company charity that was published on Monday divided opinion almost as much as the charity’s formidable and charismatic founder Camila Batmanghelidjh does. Some of the arguments, over how many children were really on the books, how results were measured and whether the Cabinet Office was misguided to continue to fund it, will take months, perhaps years, to resolve. But the report also makes important points with much broader consequences about how to manage the voluntary sector that plays such a big role in so many communities. | The House of Commons report into the collapse of the Kids Company charity that was published on Monday divided opinion almost as much as the charity’s formidable and charismatic founder Camila Batmanghelidjh does. Some of the arguments, over how many children were really on the books, how results were measured and whether the Cabinet Office was misguided to continue to fund it, will take months, perhaps years, to resolve. But the report also makes important points with much broader consequences about how to manage the voluntary sector that plays such a big role in so many communities. |
| Charity finances are under strain, yet too often the expertise to assess and manage risk is missing from trustee boards | Charity finances are under strain, yet too often the expertise to assess and manage risk is missing from trustee boards |
| Charities have taken a terrible buffeting over the past few months. The suicide last May of Olive Cooke, a 92-year-old fundraiser who was overwhelmed by the literally thousands of begging letters she received, cast a dark shadow over techniques employed by a sector that occasionally seems to be focused more on how much cash it can squeeze out of its supporters than on the good it can do. Months later Kids Company folded, with a welter of accusations of mismanagement on every side. Ever since, an air of crisis has hung over institutions set up and supported by people who only want to do good. The common thread between the two events has been a failure of governance – the fragile relationship between a charity, its beneficiaries and its supporters that relies on the vigilance of its trustees. | Charities have taken a terrible buffeting over the past few months. The suicide last May of Olive Cooke, a 92-year-old fundraiser who was overwhelmed by the literally thousands of begging letters she received, cast a dark shadow over techniques employed by a sector that occasionally seems to be focused more on how much cash it can squeeze out of its supporters than on the good it can do. Months later Kids Company folded, with a welter of accusations of mismanagement on every side. Ever since, an air of crisis has hung over institutions set up and supported by people who only want to do good. The common thread between the two events has been a failure of governance – the fragile relationship between a charity, its beneficiaries and its supporters that relies on the vigilance of its trustees. |
| There are more than 165,000 registered charities in the UK and probably 500,000 trustees ranging from local activists to highly qualified lawyers and accountants. All of them are volunteers; many will have little management experience. There is some free support available – the national organisation for charities, the NCVO, offers a downloadable guide, for example – but the public spending cuts since 2008 have simultaneously reduced the amount of support that is freely available and have made many charities more vulnerable. More than £2bn has been taken out of the charitable sector. Government contracts have become too big for charities to be able to compete, and they have had to rely on an insecure role as subcontractors. As a result, charity finances are under strain, yet too often the expertise to assess and manage risk is missing from trustee boards. | There are more than 165,000 registered charities in the UK and probably 500,000 trustees ranging from local activists to highly qualified lawyers and accountants. All of them are volunteers; many will have little management experience. There is some free support available – the national organisation for charities, the NCVO, offers a downloadable guide, for example – but the public spending cuts since 2008 have simultaneously reduced the amount of support that is freely available and have made many charities more vulnerable. More than £2bn has been taken out of the charitable sector. Government contracts have become too big for charities to be able to compete, and they have had to rely on an insecure role as subcontractors. As a result, charity finances are under strain, yet too often the expertise to assess and manage risk is missing from trustee boards. |
| Hard cases make bad law. Dealing with the particular governance challenges at Kids Company that are still being fought over – the well-recognised problem of “founder syndrome”, where a single committed individual can dominate trustee boards, for example – will not help to restore the sector to public esteem and may end up making things worse. According to the Charity Commission’s register, nearly three-quarters of charities have an annual income of less than £100,000 and only 2% have incomes on anything like the scale of the £23m that Kids Company showed in its last published accounts. Few charities work as closely with vulnerable children. The combination of its huge income, the way it responded to need rather than setting up programmes for a defined number of children, and the vulnerability of its clients, put a particular burden on the charity. It is hard to argue with the need identified in the MPs’ report to build up reserves so that, at the very least, Kids Company might have had a cushion that would have allowed it to put its affairs in order when it ran into the storm that forced it to close in August last year. Nevertheless, very few charities will find themselves in similar circumstances. | |
| Charities continue to play an invaluable part in civil society …They must be protected and modernised | Charities continue to play an invaluable part in civil society …They must be protected and modernised |
| After Olive Cooke’s death, the government accepted that there should be a new, independent regulator to oversee fundraising. The charities bill that is now going through parliament will also give the Charities Commission more nuanced regulatory powers so that it can do more to support charities on a day-to-day basis. But there is a strong case too for much more support, advice and continuing training for the trustees who guard the reputations of individual charities and the sector as a whole. | After Olive Cooke’s death, the government accepted that there should be a new, independent regulator to oversee fundraising. The charities bill that is now going through parliament will also give the Charities Commission more nuanced regulatory powers so that it can do more to support charities on a day-to-day basis. But there is a strong case too for much more support, advice and continuing training for the trustees who guard the reputations of individual charities and the sector as a whole. |
| Charities continue to play an invaluable part in civil society. They provide ongoing support for the needy and vulnerable. And they act as an outlet for millions of ordinary people who want to do some good in the world. They must be protected and modernised. Yet at the same time it is also imperative that any new burdens imposed upon them can safeguard the baby – the thousands of small, local, high-impact charities – while the sad bathwater of high-profile bad management is being glumly emptied down the drain. | Charities continue to play an invaluable part in civil society. They provide ongoing support for the needy and vulnerable. And they act as an outlet for millions of ordinary people who want to do some good in the world. They must be protected and modernised. Yet at the same time it is also imperative that any new burdens imposed upon them can safeguard the baby – the thousands of small, local, high-impact charities – while the sad bathwater of high-profile bad management is being glumly emptied down the drain. |