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Are trustees ‘on another planet’ – does the voluntary sector need more regulation?

July 5, 2016

vcs blog

I recently attended a discussion organised by the Galileo Group which considered the above question.

The title comes from a statement by Conservative peer Lord Hodgson, a member of the All-Party Parliamentary Group on Charities and Volunteering, who stated ‘what planet are these people on’? When he heard that one of the largest charities did not want to pay £15,000 to set up the new Fundraising Regulator.

Since this discussion the Charity Commission Report “Public Trust and Confidence in Charities” notes that the level of trust and confidence in charities has fallen to 5.7/10 compared to 6.7/10 in 2012 and 2014.

The temptation is for the Charity Sector to accept the analysis of Lord Hodgson and of the Charity Commission and focus inwards on improvement. I am not convinced that there is any evidence that the sector as a whole has witnessed a deterioration in standards of practice.

Instead I think we are experiencing a ‘moral panic’ driven by an unpleasant mixture of government, some think tanks and some elements of the press

The sector is being criticised in a number of ways:

  • its independence and legitimacy to campaign
  • the strategies they use to fundraise
  • the competence of its governance

There have been cases where some charities have not been as good as we have the right to expect. However, I see no evidence that the current performance of the charitable sector is any worse now than it has been in the past. In fact the growth of an executive function and the diminution of the role of trustees has ironically probably led to greater organisational competence.

It is therefore disappointing when organisations like the Charity Commission fail to provide wider evidence of the competence of the sector and instead produce reports which tell us that the public have lost confidence in the sector because the media and government tell them that the sector is behaving badly.

If you look at other sectors (Banking – various miselling scandals), Service Sector (G4S, SERCO, A4E), High Street Retail (BHS etc), NHS Trusts (Mid Staffs) and judge them on the above criteria there are much stronger grounds for being concerned about their legitimacy, fundraising strategies and governance rather than that of big national charities.

I think that the current highly critical environment exists (there is a good summary in the Morning Star here) – not because the sector is failing – rather the reverse – its actually rather successful despite government imposed austerity. I think this relative success exposes the national voluntary sector to attack because there is:

  • dislike of independent challenge to government
  • concern that the charity model of service delivery is a direct challenge to that offered by private sector corporates who are fishing in the same pond for government contracts.
  • belief that large charities are a redoubt of the left of centre professional class

Sympathy

I have some sympathy for national charities (I am on the board of one – Citizens Advice) they have responded to the marketisation of public sector funding and the move away from grant funding – in some cases quite successfully. This must be galling to private sector providers who are keen to get access to the lucrative public sector market.

Action

I think that the sector needs to develop a more strategic response here.

  • Evidence – there needs to be a clear evidence based view of the competence of the sector. If the Charity Commission cannot do this (and in my view it should) then other players like NCVO need to step up and do the work – we urgently need a robust and clear view of the sector which challenges this moral panic.
  • Governance – it is too easy to portray many charities as the mouthpiece of the professional ‘charitariat’, it may feel frustrating for some to to give some power over to members and trustees but strong accountability and roots into the communities we serve is essential to charities survival and is an important way of keeping true to founding values – avoiding a drift to social enterprise or business.
  • Challenge – national charities must see the gagging legislation as giving them a mandate for evidence based challenge rather than a restriction. Part of all charities business plans should be to raise funds to ensure that they can lobby appropriately to represent the interests of the people who rely on their services.
  • Government – finally the sector should have the confidence to challenge government. A number of the problems here rest with government behaviour. From the sweetheart deals that were done by ministers with Kids Company, through to the way in which lobbying from some charities and private sector companies is condoned while charities are attacked – we need a coherent challenge that places these issues in the wider context of policy influence and access to markets.

What do you think?

2 Comments leave one →
  1. Mike PEDLER permalink
    July 5, 2016 09:47

    I share your suspicions of “regulation” as an answer to everything in the free market thinking world – it doesn’t seem to hold the big 6 energy companies back much does it? The danger must always be of the regulator acting as a fig leaf rather than a reformer. Do they even have organisational reform as an objective?

    What many charities – like other organisations – could do with is encouragement and help to improve their managerial and governmental processes. I doubt that a regulator will do this.

    Is the Charities Commission still run by William Shawcross? Probably not much hope for developmental thinking there.

  2. July 9, 2016 21:12

    I completely agree with the analysis that there is no evidence of governance of charities being poorer today than before and that the calls for the regulation and silencing of charities are stoked by a mischievous press, with its own agenda of silencing opinions contrary to its own and the political parties of its affinity. Indeed one might argue that a huge purpose of charities, and yes, commercial providers too, as well as academics, is to inform policy development, through evidence based on practice, in terms of what works and what doesn’t. So when the Child Poverty Action Group observed that welfare reform reform would lead to a dramatic increase of children in poverty, the government responded that it wouldn’t and to be certain even tried to change the definition of child poverty. Oh but had the government listened and acted, because, this week, as if on cue, the number of children in poverty lept by 200,000. This is but a single example of why governments need charities to understand the implications of their policies. Could it be that they want to silence them not because the evidence they provide, based on their understanding of what happens on the ground, is funded out of public contracts, but rather because our governments really don’t want evidence based policy?

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