NEWS

NEWS

Is this the time for charities to take stock?

18
Jun 2019

Is this the time for small charities to take stock? - Trustees actions pivotal for the future.

With this being the first few days of ‘Small Charity Week’ it is perhaps an opportune time for Trustees of (small) charities to reflect on the charity world today and how ready and able they are to meet the challenges of the future. All charities with an income of less than £1M per annum are classed as a ‘small charity’ and they account for 93% of the members of the National Council for Voluntary Organisations (NCVO). These charities are often very specific and highly focused on making a difference to individuals at a community level.

But how does the charitable landscape look today? Is it healthy? Is it delivering against expectations? Are charities being given a fair deal? Are Trustees fully addressing their responsibilities as accountable leaders? And a genuinely difficult question to answer – are there too many charities?

This short article is largely based on extracts from a speech by Baroness Stowell, Chair of the Charity Commission delivered at the end of May 2019.

Firstly not all charities are registered by the Charity Commission but for the moment let’s step back and look at a few statistics from the Charity Commission as the regulator.

  • 168,000 charities on the register and expanding by 5,000 per annum

  • Registered charities have combined income of £77Bn. Put into context that's equivalent to 60% of the NHS

    budget or 2.5 times the defence budget!

  • 700,000 Trustees give their time

  • Over 11 million people volunteer at least once per month.

    As many of us working in the charity sector know charities are increasingly ‘doing work and offering services that the public and private sectors cannot or will not offer’1 and frequently those charities services are often facing the ‘double whammy’ of increasing demands and lower funding. These trends are likely to intensify placing yet more pressure on Trustees who have the responsibility of ‘analysing the external environment and planning for sustainability’ [Charity Governance Code section 1.5]

    And the evidence is that there is good public recognition. According to the Charity Commission research ’the public care deeply about charity, that they are invested in the idea, and want it to succeed. And people continue to support charitable endeavour generously’1

    Yet even with these positive public accolades we disappointingly know from recent media attention that some behaviours have fallen far short of the high standards expected of charities. Some of these charities are household names whose reputation and standing has suffered serious damage; some charities while escaping public media scrutiny themselves know that their behaviour should be better and sadly as was seen in the Kids Company report sometimes Trustees are simply not aware.

    Baroness Stowell comments ‘ First, and most important, there is evidence of a growing gap between public expectations of charity, of what charity is and means on the one hand, and the attitude and behaviour the public see in some charities as institutions on the other’ ‘the public no longer give charities the benefit of the doubt just because they are charities. Research tells that charities are no more trusted than the average person in the street1

She continues ‘ all people expect charities to be driven by purpose, to live their values and hold themselves to high standards of ethical behaviour and attitude, and to be prudent, and transparent in their stewardship of money’1

And the challenge issued by Baroness Stowell to the Charity sector (and therefore Trustees in particular) is

I want to see organisations that inspire and give hope. To work in ways that make all members of society,
regardless of their circumstances, feel invested in, empowered to make changes and confident that their charitable endeavours are matched, exceeded even, by the attitude andbehaviour that the charities on our register display.

To achieve this future requires nothing short of a cultural upheaval in the sector. But the prize if we achieve this is so great. It's the prize of strengthening our society, our communities, our way of life, our democracy.

No other sector or grouping in society has this potential. Charities do.’1
So what can Trustees do to rise to such a powerful challenge and to meet it?
At SneddonClark we would propose that there are three distinct phases of action:-

1. Be courageous and undertake a thorough review of your charity

  1. Are your charity’s objects and governing document still fit for purpose?

  2. Are Trustees fully up to speed with the new Governance Code?

  3. How well does your charity meet it?

  4. How is the charity delivering public benefit?

  5. How do you know?

Recent research by PKF FrancisClark2 demonstrated that only 13% of charities responding to their research had

undertaken an independent review of governance in the last three years.

  1. Consider the benefits of a values based culture assessment within the charity and inclusive of key beneficiaries, donors, sponsors, commissioners to determine how the charity might need to change behaviours and embrace new values aligned to meet the charities beneficiary needs.

  2. Carefully reflect on future risks and opportunities and consider how beneficiaries might gain from your charity’s closer collaboration with others in working alliances, partnerships or even mergers.

Tom Sneddon has supported a range of charities in Board and Governance reviews, charity mergers and a number assignments as an interim charity CEO often in distressed or financially challenged charities.

Each of the directors of SneddonClark have specific experience of working with charities either as Trustees or senior staff. Additionally both Karon Clark and Tom Sneddon have over 8 years experience in supporting organisations through values based culture change.

Could our experiences be of help to you and to your beneficiaries?

Contact Tom Sneddon for an initial free, exploratory conversation. 07768 033652 or tom@scllp.org.uk 

1  Extracts in italics from Baroness Stowell's speech on 30 May 2019

2  Statistics provided by PKF FrancisClark LLP ( May 2019)