Paying Trustees: Is NPC Thinking Straight?

New Philanthropy Capital (NPC) have published a report (“It Starts from the Top”) about how to improve charity governance. The two most eye-catching recommendations are that it should be easier for Trustees to be paid, and that it should be up to each charity to decide if paid staff should be members of the Board alongside volunteers. They suggest that the requirements of SORP should be extended to include mandatory reporting of key governance activities like Board evaluation and Trustee appraisals, and also mandatory reporting on impact. Are they thinking straight?

It is a punchy discussion paper with some good ideas to debate. I particularly liked the emphasis on Boards not getting preoccupied with avoiding trouble, and having a positive hunger to improve impact. This is timely in the context of much finger-wagging aimed at Trustees. Other welcome suggestions are that Boards should fish in non-traditional ponds for diverse new recruits, and that employers should be encouraged to permit more employee volunteering, regarding being a Trustee as good for development of their staff’s skills, experience and confidence. We can all applaud the idea of more awards recognising good contributions to governance and the wider access to good practice, using new technology more creatively. So far, so good.

NPC are also careful to say that their suggestions are for discussion, that their more ambitious proposals might be piloted and evaluated before wider implementation, and that they are sensitive to the problem of appearing to add disproportionate burdens to smaller charities. They stress rightly that there is no one-size-fits-all approach to improving governance in such a large, diverse sector.

The eye-catching recommendations, however, are poorly supported and skimpily argued, despite the fact that NPC is fully aware that they are controversial.  Making it easier to pay Trustees would have had no impact on the recent controversies that are referenced at the start and end of the report. The rationale used is that it would increase diversity, thereby improving impact in the longer run. They do not produce research or evidence to back up this claim. They say that such payments must not be made to wealthy Trustees, but without defining a limit or considering the pitfalls of means-testing. They do not explore the potential and limits of what can be done to improve diversity without paying Trustees.

More seriously, they do not acknowledge the key arguments against more widespread payment of Trustees, so their presentation of the issue is unbalanced. The key argument is that paying Trustees will, cumulatively and over time, destroy the public (including donor) perception that charity trustees are in it for the public benefit and not for their own gain;  and that volunteer effort, freely given for love, is the animating force of charity: therefore, paying Trustees should be exceptional. NPC say that such decisions should be left to the individual charity, but this misses the point about the cumulative and collective consequences for the sector. At a time when public trust and confidence is under some threat from media attacks, it seems odd to omit this consideration altogether. Is it possible that a one-eyed pre-occupation with “driving impact” has obscured it from NPC’s view?

Next up is the suggestion that some paid staff should more often be Board members, with each charity deciding for itself. The advantage is summarised thus: “as with commercial companies, it ties key people into the governance of the organisation, meaning that they become party to major decisions and share responsibility for success with the Board”. I must say that I am unaware of a significant problem of cases where the Chief Executive of a charity is not party to major decisions and does not share (or indeed feel principal) responsibility for its success or failure. Is there evidence that such cases are at all common? The argument against is summarised as making it easier for Boards to dislodge an inadequate CEO, but that is not the main argument. The main argument is the same one NPC missed before, namely that Trustees should in general be seen to be acting without personal financial gain, and this is messed up if paid staff become Trustees too. Perceptions and possibly actual decisions are also affected if Trustees deciding the budget for pay and working conditions include key beneficiaries from such policies. Think of the larger Housing Associations, the least recognisable as charities: is this what NPC is edging towards for the future of the wider sector?

The suggestion that charities should have to report on such governance activities as Board evaluation, Trustee appraisal, role descriptions of Trustees and induction of new Trustees is an interesting one to ventilate. This is certainly good practice for the kind of model Board that NPC has in mind, driving for impact. But should it be a general requirement, supposing the Charity Commission ever had the resources to monitor and police it effectively? NPC have themselves done work recently showing that one in five charities include the advancement of religion in their objects – a huge part of the sector. Do they expect the average Parochial Church Council or equivalents in other denominations and faiths to be compulsorily reporting on these governance activities as part of “driving for impact”? And for how many modest or local charities would such concepts be operable? The volunteer Trustee ethos may rear its head yet again here: more sophisticated, larger organisations and volunteers may feel no qualms about performance appraisals, role descriptions and the like for their volunteer Trustees, but many others will no doubt feel them to be uncomfortable or inappropriate? Where would NPC draw the line on compulsory reporting?

Compulsory reporting on impact via SORP is also interesting but problematical. There is already a requirement to report on public benefit. If the Charity Commission were ever to have the resources, would it not be more productive to beef up the requirements for public benefit reporting rather than load more issues into SORP? And which charities do not, in their Annual Reports, and other reports to the regulator, report on impact, however imperfectly? Selecting compulsory measures of impact on which charities must report would be the devil of a job, because there are so many different kinds of measures, of variable relevance depending on the nature of a charity’s objectives and chosen strategies. And again we come back to the point that the Charity Commission is skint.

OK, a concise discussion document has its place. It is stimulating to be  provoked. There are some good ideas in the mix. On the other hand, the more far-reaching and contentious the proposal, the more it deserves a degree of careful exploration and argumentation. That is missing here. Perhaps NPC’s next contribution on the subject will be equally bold but less skimpy?




Public Trust in Charities? Let’s not play the hypochondriac with a dodgy thermometer.

Make no mistake:  public trust and confidence in charities matter. They enjoy privileged status, including over £5 billion in tax relief in England and Wales in the year to March 2016. From the public come our donors and volunteers. As many sensible people have warned, that cannot be taken for granted.

On the other hand, perhaps the fact that we are so frightened of losing that trust sometimes causes us to become unhinged when trying to test it and talk about it.

The public is enormous and amorphous, so it is extraordinarily difficult to pronounce reliably on the state of mind of such a diverse mass, especially on the basis of a sample of 1000 plus deeper exploration in tiny focus groups. We have all learned from the General Election how the most sophisticated pollsters can get it wrong.

I enter the caveat that I am not a statistician, understand little about statistical methods and know nothing about how different statistical bodies are authenticated. So if there were a sample of 1000 or so people a bit like me in those respects, findings about a shift in our trust in statistics or our opinions about how well statistical bodies are regulated would not be worth very much. And at least I know what the word “statistic” means.

Not so with trust and confidence in charities. Many members of the public do not know what a charity is. For example, one in five of all charities includes the advancement of religion as its charitable objective, but how many of the public know that churches and  other religious bodies are charities when they reply? How many are thinking about universities, or academy schools, or arts and sports organisations? If they don’t know what is included in the charity sector, on what are they basing their views on whether to trust it? A small number of household names described as charities which they have seen in advertisements or read about in the newspapers?

It is a consistent finding that, in general, those who are close to charities and know them from personal experience are substantially more likely to express trust and confidence than those who do not, so part of the findings about trust and confidence ( not all) is a measure of how ignorant the respondents are about what charities actually are and do.

There is a striking example in the  latest research by Populus for the Charity Commission, published in June 2016. Unaided,  only 32 per cent of the sample said that they or their close families or friends had ever benefited from or used the services of a charity. But when a short list of typical charities and charitable services was provided, the percentage rose to 94 per cent! That is a gaping knowledge deficit, affecting our interpretation of expressions of trust and confidence based on such a sample. Over half of the Populus sample agreed that they knew very little about how charities are run and managed, so their views on how ethical, effective or trustworthy charities are must be seen in that light. Three quarters of the sample told Populus that they were more likely to trust a charity if they had heard of it. Well, yes. So what does it  actually mean when a minority one third of the sample say their confidence in charities has declined when many of them don’t know what a charity is and may not have heard of more than a handful of charities (as they understand them to be) at all? And, in most cases, vastly underestimate the real number and contribution of local charities?

Now note that in the Commission’s 2014 research the figure equivalent to that 32 per cent (those thinking they or their friends had been affected in some way by a charity) was 40 per cent. So that means that the number of the public in 2016 saying that they or anyone they know had ever received any benefit from a charity tumbled by 8 per cent in two years. But wait a minute, the figure in 2012 was 34 per cent, so the level of perception of charitable activity rose by 6 per cent in 2014, then fell by 8 per cent in 2016?   Is it not likely that our thermometer is subject to a significant  margin of meaningless fluctuation?

The same suspicion arises when we consider the nfpSynergy monitoring of public trust and confidence since 2003. Noting an apparently puzzling drop from 66 per cent in 2013 to 56 per cent in 2014,  Joy Dobbs who did a judicious overview of such research for NCVO pointed out that there had been “a number of fluctuations in this measure of levels of trust since it was first collected”. On 26 August 2015 Third Sector carried the alarming news that “Public trust in charities is at lowest level since 2007” at 53 per cent, using nfpSynergy data collected before the Olive Cooke affair. Confusingly, on 6 July 2016, after the Olive Cooke affair, and just after the Charity Commission published its 2016 research suggesting a significant fall in trust and confidence, Third Sector carried the cheering news that according to nfpSynergy public trust was returning.  55 per cent of people trusted charities quite a lot or a great deal, compared with 48 per cent 6 months’ before, and in the 55 to 64 age group confidence had shot up by 16 per cent! The worst ever result had been 2007, when trust and confidence tanked at 42 per cent. (Crickey, what on earth was going on in 2007?) But it rose to an all time high of 70 per cent in January 2010.

I attribute this result to my period of office as a Board Member of the Charity Commission, which I left in 2010, after which confidence has never been the same again.

Only joking. Seriously, though, I am a great admirer of much of the work of nfpSynergy and its thought provoking insights on many different subjects, and I do not have their statistical expertise, but is this thermometer reliable enough?

And when OSCR produced similar figures for Scotland showing trust and confidence at only 61 per cent in 2011, 68 per cent in 2014 and 64 per cent in 2016, three points ahead of 2011 despite the UK media stories, should we be racking our brains trying to explain why things were worse in 2011, and what improvements can explain the rise in 2014, or is it the thermometer challenge again?

Let us return to what is regarded as the authoritative Populus research for the Charity Commission with which I began. We already noted a suspiciously hard-to-explain tumble in numbers reporting that they had been helped by or used a charity. I don’t myself take seriously the reported 5 per cent fall since 2014 in members of the public who had heard of the Charity Commission. Nor, when only 50 per cent of the sample had even heard of the Charity Commission, and over half admit they know nothing about the running or operation of charities, can one place much weight on the finding that 60 per cent of the sample believe that charities are well regulated. When they are asked which charities they trust the most, and the least, it is notable that some of the same big names come up in a slightly different order on both lists. Why? Surely because there is such a small pool of charities that many people have heard of (and know are charities) at all.

Despite all these thermometer problems, one must give the benefit of the doubt to the core finding that the measure of public trust and confidence that had remained stable for some years at 6.7 fell to 5.7 in 2016, even though the measure for other sectors remained stable. Note that 67 per cent of the sample said that their trust and confidence had remained the same (or, for 6 per cent,  increased), but 33 per cent, or 359 individuals, said it had decreased. Of that minority of 359, 65 per cent (some 236 people) attributed their decreased trust and confidence to hostile media stories about charities or how charities spend their money. 21 per cent of the minority, ie 75 people (out of a total 1089), said their trust had decreased because they don’t trust charities (sic) or, slightly more meaningfully, that they didn’t know what they did with their money, while a further 18 per cent of the minority (64 people) blamed pressurizing fundraising techniques, which again may often have been picked up from or reinforced by media stories. A fair summary seems to be that a one third minority of the sample, many of whom know little about charities or what they are, have principally remembered and been troubled by.hostile stories in the media, whilst the overall trust and confidence of the two thirds majority, who tend on average to know more about charities, was apparently unaffected, even though they may have been equally troubled by media coverage of particular cases.

It has been argued that the media stories were reflecting what people were thinking about charities anyway, but in that case I am not entirely clear why previous trust and confidence measures were higher.

There have been important, realistic recommendations on the way ahead by the likes of Karl Wilding of the NCVO, Sarah Atkinson of the Charity Commission, and Joe Saxton of nfpSynergy, sometimes in the context of such published research  (even if the research itself is uneven). Good. We should all put our backs into the excellent efforts being made to improve the performance and governance of the sector, to explain what charities actually are and communicate their messages better. Let us do it above all for the long term good of our beneficiaries, for the inherent importance of transparency, accountability, respect for donors as human beings (not ATM machines), and a responsible awareness that we enjoy great privileges because of a long term implied bargain of mutual benefit between the sector and the public.  But that does not require putting unrealistic weight on fluctuating thermometer readings of what “the public” is thinking.



Party of Government or Social Movement? Labour must decide

(Letter published in The Guardian, 31 July 2016)

Owen Jones believes that there is a “false dichotomy” between Labour as a social movement and as a party of government (Mass membership alone doesn’t make a social movement, 28 July). But there are stubborn differences.

Social movements – for example the feminist movement, or the environmental movement, or youth movements, or movements of LGBT people – usually have ambitions which are not limited to any one political party and seek supporters from all parties and none. Why would one want credit unions, or food banks, or tenants’ movements (all instances cited by Jones) to be party political in their identity rather than working across party lines?

Moreover, social movements, like the “campaigning organisations” which Jeremy Corbyn uses as a description of his party, are responsible to their own members alone and may take decades to secure their goals (if they ever do), as different governments come and go. By contrast, a party of government must show that it can govern on behalf of the whole people, not just its own members, and can make the necessary arduous compromises that every government must make in order to reconcile competing interests and views. It therefore requires skills and temperaments that are different from social movements’, and cannot afford to wait for many years and decades in the wilderness as social movements may do.

Jeremy Corbyn is undoubtedly a fine supporter of social movements, on picket lines and at evening meetings and demonstrations for decades, never erring from the movements’ goals, enduring in the wilderness, rarely deflected by other people’s views and interests. The question is whether he can also be an effective leader of a party of government, with its very different requirements.
Andrew Purkis

Pope on Politics and Charity

Pope Francis has said that “The Church must get involved in greater politics, because – and I quote Paul VI – politics is one of the highest forms of charity”.

This constitutes an authoritative affirmation that political activity is a not just legitimate but exalted part of charity. It is part and parcel of finding effective ways of expressing love of each and every neighbour (caritas) and of humanity.

The Pope was speaking at a Judges’ Summit on Human Trafficking and Organized Crime on Friday 3rd June 2016. He said that forced labour, prostitution, organ trafficking, and other modern forms of slavery must be seen by all regious and political leaders as “real crimes against humanity”.

This was an area where the Church should do more poltitics, not less, the Pope said.

The Church was fortunate to have allies in this fight at the UN, he said, and the unanimous ratification of the new Sustainable Development Goals – which included the target of eradicating slavery and trafficking – meant that every country had the “moral imperative” of joining the fight.

The Pope urged his audience of Judges to return to their home countries to raise awareness of slavery, use their powers to rescue slaves, and prosecute slavemasters. To achieve this, they must be careful to hold on to their freedom from governments and organised crime, he warned. (SOURCE: Church Times, 10 June 2016).

This is a very significant statement, not only about the scourge of modern forms of slavery, but about the nature of charity. It puts into perspective the sentiments of part of the UK’s political class that are hostile to charitable advocacy and recent statements from the Cabinet Office describing charitable lobbying as the antithesis of good causes.


Helping Trustees to Oversee Fundraising

The Charity Commission’s new guidance to Trustees on oversight of fundraising from the public, CC20, is, on a first reading, a helpful, sensible document – but if you read it by itself it is lopsided. I write from the perspective that the key audience is larger charities with staff including fundraising Departments.

It is useful above all because it empowers Trustees to engage with their staff on how fundraising methods can affect the reputation and long term success of the charity. The Charity Commission says that Trustees ought to be asking questions and establishing the correct Codes and processes of reporting and monitoring in line with that particular charity’s values. This will help overcome anxieties that perhaps such questioning might be seen as crossing the line between the governance role of Trustees and the management role of staff. And this time, the relevant issues have been identified through conscientious consultation of the sector and others. So the contents are not confined to the legal position: for example, Trustees are warned not to become “over involved” in fundraising operations.

Similarly, the guidance encourages Trustees and fundraisers to talk to each other and other staff about how to integrate fundraising operations in the wider ethos and strategic purposes of the charity. This is vital, because the professional separateness of the fundraisers can be a major obstacle to such integration. This separateness is not necessarily mitigated by appointing a Board member or two who think their job is to understand and bat for fundraising while other members concentrate on mission and policy. The fundraising teams need to feel that the whole Board owns and backs the fundraising effort as part of the mission, not that half or more of them hold their noses or start yawning when fundraising is on the agenda.

When Ken Burnett was Chair of ActionAid, he arranged for three empty chairs to be prominent at every Board meeting. They were for core constituents who were not physically present but who should constantly be borne in mind as if they were. One represented the movements and communities of dispossed and marginalised people who drive ActionAid’s mission. A second was for the staff of the charity spread across the globe. And the third was for the donors, on whose commitment the whole organisation relied. This was typical of his view that our donor relationships are crucial, to be cared for, respected and nourished. Donors are not ATM machines, purely instruments of the charity’s wider purposes. That is the kind of issue that every good charity needs to debate and discuss as a core part of its strategy processes.CC20 is right to state that fundraisers must know what is expected of them, in terms of method and ethos as well as the amount to be raised.

Just as diplomats try to prevent the last war rather than the one coming along the tracks, however, so CC20 focuses primarily on the sort of issues that have caught the headlines over the last year or so: the aggressive practices of contracted agencies, the high costs extracted by some professional fundraising bodies and direct mail firms, the damage caused by disproportionate fundraising investment in relation to returns, issues of unjustifiable individual gain and tax avoidance. And a good thing too. But a wider, real life context is missing. When Trustees are considering their responsibilities in relation to fundraising strategy, they must think about the crucial independence that substantial funding from the public underpins. They must think about what sort of funding is unrestricted, and available for flexible and core purposes, as opposed to restricted. They must consider whether alternative funding is available from the state or corporate sectors or grant-giving trusts, or not. Unlike the Trustees of Kids’ Company, they must attend constantly to long term solvency, to risk of sudden contraction, to a sustainable balance of funding. The appropriate targets and risk management for different kinds of fundraising from the public have to be integrated with these weighty responsibilities, on which the Commission is so insistent in other contexts. There is virtually no mention of them in CC20.

Moreover, the blog accompanying the new guidance is entitled “How trustees can restore donor trust”. There is evident fondness for the formulation that “the buck stops with you (the Trustee)”. Overall, yes, in the sense that a Secretary of State is formally responsible for poor operational practice in a large Government Department. In reality, though, where all operational and management responsibilities are delegated, as in virtually all large charities, the buck for management and operational failures stops with the Chief Executive or relevant Department Head, and sometimes they have to be dismissed – by the Chief Executive or in the case of the Chief Executive, by the Board. Many of the failures of the last few years were principally failures of delegated management. Others were failures of regulation, because Trustees and staff, focused on the mission of their particular charity, need a robust framework of rules and enforcement by the regulator. The buck stops with them, too. After all, it is the regulators, not Trustees of individual charities, that are principally responsible for the cumulative and collective effects of particular fundraising practices on the public and on the reputation of the sector as a whole. And it is precisely because the reasons for trying to grow and maintain funding from the public are often so compelling that the regulatory framework needs to be so strong. Helpful as the guidance of CC20 is, it is unrealistic to expect the Trustees of individual charities to take too much of the strain.

Nor let us forget that Trustees, unlike CC20, cannot afford to look at the risks of fundraising in isolation from all the other risks on the risk register. Often, it will be other sorts of risk that are rightly the priority for Board attention. There are plenty of them. The key is to integrate fundraising risks that may have received inadequate attention in the big picture of Trustee responsibilities, not displace all the others.

Let us recognise also that while Trustees and staff of large charities certainly do need to restore donor trust where it has taken a knock (though Mark Flannagan, CEO of Beating Bowel Cancer cautioned on 7 June at an Association of Chairs gathering that there is not much evidence of a big dent in donations despite the furore in the media), the trust between Trustees and staff may need to be restored, the trust between fundraisers and other parts of the charity may need to be restored, and of course the trust between the regulator and both the public/Parliament and the sector needs to be restored.

Trustees have a major responsibility to play their part, assisted by CC20, but in a context where others also have key responsibilities, not in a lopsided, legalistic world where it is all down to them.Trustees should be encouraged to focus on what only Trustees can do.  If there is no realistic, balanced attribution of responsibility, many people who would make very good Trustees may decide over time to spend more time with their families.


Salute to the Irrepressible Bubb

Sir Stephen Bubb has just announced he will shortly step down as Chief Executive of ACEVO, the Association of Charity Chief Executives, after 15 years. He is not retiring and will head up an important project, but he will not be a key sector leader in the same way. My main feeling, slightly unexpected, is that I shall miss him. A lot of others in the sector will, too. Why?

I don’t know Steve well, but we have had very infrequent, amicable dealings for roughly 30 years. I have always found him warm, energetic, with a zest for life and for what he is doing, and he laughs a lot. That’s part of it.

He hurls himself into projects and opportunities heart and soul. That has a downside. He doesn’t often do nuance. He doesn’t do intellectually fastidious detachment from the enthusiasms of the sector: he embodies them. I think he was sometimes uncritically, perhaps dangerously, enthusiastic about the potential of charities as contractors to deliver public services, whereas NCVO had a more balanced view of the pros and cons. Did he encourage some politicians in their essentially instrumental view of the sector as a service provider? He was sometimes aggressively defiant in the face of criticisms of charities, when others felt it would be wiser to admit faults and the need to do better. Many is the time when those with the best interests of the sector at heart have rolled their eyeballs and shaken their heads at the next Bubb “naif” or “simplistic” public statement. The noise of teeth grinding in Government circles, in the Charity Commission, the NCVO and worldly wise politicians has been almost audible over the years – sometimes with good reason from their perspective.

But the uncomplicated nature of his commitment also has a massive upside, in tune with the unfastidious enthusiasm of many charities themselves. That is why he has been such a popular leader for so many ACEVO members. That is also why he built up ACEVO into a much more potent organisation than it used to be before his arrival. If anyone thought Steve’s strong advocacy of the sector’s service delivery role meant that he took an instrumental view of their purpose, they should be disabused when they heard his sometimes lone voice protesting passionately against any attack on charities’ right to campaign. And his vociferous, lone contributions to debate cannot be seen in isolation. There were plenty of charity people willing to apologise and commit to change: perhaps his defiant defensiveness was a useful foil and additional element in the chemistry?

For example, when Eric Pickles first launched the noxious anti-advocacy clause relating to his Department’s grants, NCVO chose the inside track and worked hard behind the scenes to challenge the move. Steve went public and denounced Pickles in immoderate language on the front page of The Times. The usual tut-tutting ensued from the worldly wise. But in hindsight I am grateful to Steve for his demarche. It complemented the inside track taken by others. It signalled to the sector itself and to wider public opinion that this was not something to be taken lying down, that a key sector leader was willing to denounce it publicly, loudly.  Sometimes you need both approaches. When the inside track did not work, the NCVO lion is now roaring as loudly as ACEVO.

Like most formidable leaders, there is more to Steve than you might assume. When I was working for the Archbishop of Canterbury, he turned up with, of all people, the Anglican Bishop of Rangoon in Burma, with whom he had a significant contact. Steve is intuitively closer to the huge religious part of our sector than some other sector leaders. Was this part of his motivation in getting so close, and so supportively, to many Muslim charities in recent years, and helping to give them voice?

Bubb is a lovely name, with apt associations with bubbles. Steve Bubb is forever coming up with bubbling ideas for future initiatives. Kick him in the teeth: he comes back with more. And our sector is reliant on that sort of indomitable, bubbling energy. If you condemn, tut-tut, poor cold water, he just bubbles back as before. Like bubbles, like the charity sector itself, whatever the rough edges and lack of nuance or political calculation, he is irrepressible. That, above all, is why we are going to miss him as one of the sector’s leaders.

Government’s Anti-Advocacy “Pause”: Make it Permanent

On 27 April, Cabinet Office Minister Matt Hancock MP announced a pause in the implementation of the anti advocacy clause to apply to all Government grants to charities. The Government was considering the comments of all interested parties, he explained. They were committed to some sort of clause but would take more time to decide its form. They have not yet agreed to a formal consultation process.

The Government had already retreated to the extent of exempting research grants awarded through named research councils. As Charlotte Ravenscroft of the NCVO pointed out, this betrayed the ill thought out nature of the policy. It implicitly acknowledged that the clause might well damage a valued contribution to society.  But charities were left in the firing line with a deadline of 1st May, as the Government continued to ignore carefully expressed arguments  in public and private, pertinent requests for clarification from the NCVO which they could not answer, objections in the House of Lords and from the Opposition, a letter from the Chief Executives of 140 charities, and the demolition of the IEA’s risible sock puppet report that the Government had unwisely cited as an “evidence” base. In truth, it was no more than a Tea Party style polemic, clearly hostile to core policies of the Government itself, particularly on international development, public health, environmental concerns and good equalities practice.

What is wrong with the clause? In brief:

  • it is illiberal, seeking to use grants to stifle the voices of grant aided workers
  • it is bad governance, because it implies that Whitehall knows best and doesn’t need feedback from grant aided workers or their users. The opposite is true.
  • It addresses a supposed harm for which there is no evidence. The Cabinet Office has failed to give even one example.
  • It is based on no consultation.
  • It breaches the Compact between Government and civil society signed by David Cameron. The Government’s efforts to argue otherwise are unpersuasive casuistry.
  • It is so widely drafted as to cause confusion and uncertainty as to what is covered and what not. As such it is grossly unfair to grant aided workers, to other staff in the charity and to Trustees, not sure what they are “allowed” to ask of their grant aided workers in order to fulfil their own responsibilities to their beneficiaries.
  • It adds to charities’ burdens as they try to work out what percentage of someone’s time was spent on “influencing” as opposed to other activities and develop other accounting jiggery-pokery.
  • It is also bad administration because the clause will in practice be applied inconsistently. Ministers and civil servants in a number of Departments who know the clause is nonsense will be tapping noses, winking and nodding to charities whom they fund, not asking too many questions, and carrying on as before. But other charities will be at the mercy of Ministers or civil servants who choose to make draconian use of the clause to crack down on political irritants.

Apart from that, the clause is an excellent idea.

Three hearty cheers for NCVO, ACEVO and Social Enterprise UK for persistent lobbying and winning the pause.

Look carefully at the Cabinet Office announcement of the pause. There is no longer any mention of sock puppets or the IEA. There is no longer the formulation that lobbying is a diversion from good causes. Let us be grateful for those small mercies. The target is now said to be “improper lobbying for new regulation or for more government funding”. Does that mean proper lobbying is OK? What does it take to be “improper”? And does it mean that lobbying against new regulation or against poor use of government money is OK? Why should new regulation and more public spending be singled out from all other possible concerns being relayed by charities to policy makers? And what if those concerns might typically require a mixture of better practice, different priorities, different attitudes and money: are they banned or not?

The announcement repeats the mantra of protecting taxpayers’ money from being wasted on government lobbying government. Again, we await one single example of this harm from the Cabinet Office. The mantra is anyway subject to these objections:

  1. independent charities, albeit receiving a government grant, do not turn into “government”. They give their own independent views. That is why they often publicly disagree with the Government.
  2. charities are prohibited by the clause from influencing of any kind (not just lobbying)
  3. their influencing of their MPs and other parliamentarians of all parties, and independent regulators, are also banned by the clause, so again the mantra does not fit the clause.
  4. Government Departments attempt every day to influence other Government Departments and policy makers, using taxpayers’ money for the purpose. The Department of Health argues the case for health, environmental Departments for the Environment, Northern Ireland for the interests of Northern Irelant, and so forth. Is it all a waste of money? What is wrong with the principle of using taxpayers’ money to enable this to happen, whether or not a charity is involved in the argument? It is not clear why Matt Hancock regards this as a “farce”.
  5. Taxpayers already pay indirectly towards all the activities of charities, including influencing, because of charities’ tax breaks.

There is a wider context to all this. It is not an isolated example of the Executive arm of Government trying to increase its centralised power and shrink the space for criticism. Look at the track record of the Charity Commission on the subject of political activity since late 2012. Look at attempts to increase Ministerial influence over public appointments. Look at the Trade Unions Bill. More widely, Governments and wealthy elites in many different countries around the world are busy shrinking the political space for civil society which poses inconvenient obstacles to their interests and ideologies. The UK used to be a beacon for civil society in such countries, a model for regulation without repression. No longer. But we can become such a beacon again if we resist and fight back.

Each wordly-wise compromise with this unnecessary, illiberal, muddled clause is an extra encouragement to those who want to curtail the contribution of civil society without bothering to consult or justify their policy – in this country and further afield. Yes, it is a matter of principle. So let us stand firm as rocks behind our sector leaders.



Shawcross Embraces Charitable Advocacy – Three Years Late

After three long years of negativism about charities’ political activity, the Chairman of the Charity Commission has suddenly embraced the vital role of charities in democratic debate and decision-making. Why?

  1. On 21 April 2016, NCVO announced in a tweet that the Chair of the Charity Commission William Shawcross had written to its veteran Chief Executive Sir Stuart Etherington, including this passage:

Let me say first that I wholly agree with you on the importance of charities being involved in advocacy in relation to their activities. Charities have a long and distinguished history of involvement in public debate leading to significant legislative and social changes in society. Such advocacy is a crucial element in a thriving democracy. However, as you know, the law sets limits on such involvement and it is the Commission’s responsibility to issue guidance to help trustees be aware of the relevant law”.

  1. The question arises as to why William Shawcross has failed to give voice to this belief for over three years of damaging negativism on this very subject?
  2. Let us briefly recap the Commission’s controversial record in this area since late 2012, when Shawcross was first appointed. His very first speech as Chair, to ACEVO, praised charities for their role in speaking out on behalf of their beneficiaries. That was the last really positive statement until last week. The next thing we heard was that Shawcross’s new Board had targeted “politicisation” as one of four key threats to be tackled along with fraud, infiltration by terrorism and possible sexual or violent abuse of beneficiaries (speech to WI, June 2013). He never did explain what he meant by politicisation, and we moved into a period of imprecise negativism and uncertainty (familiar to old hands from the Charity Commission of the 1980s and half of the 1990s). There was the notorious remark first coined by Commission Board member Gwithian Prins, then picked up by the Minister for Civil Society Brooks Newmark MP, that charities should “stick to their knitting”, with the threat that, as Prins put it, “the weather was changing” for campaigning charities. There was a prolonged, destabilising cat and mouse game as to whether CC9 was to be revised (clearly in a restrictive direction) or not. It only became clear by about November 2015 that the Commission had no current plans to revise CC9 after all.
  3. In further interventions, Shawcross allowed that campaigning was legally permissible but must be “responsible”, again without defining what he meant. In December 2014 we had the Commission’s report on its investigation into alleged political activity by Oxfam, triggered by its tweet about a “perfect storm” affecting poor people in the UK. This generally exonerated the charity of significant misdemeanours but included the infamous sentence in its lessons for the wider sector that “Particular care should be taken to ensure….that messages are appropriate and do not have any risk of being misinterpreted or perceived as party political” – which as Shawcross must know better than most can only be achieved by saying nothing at all.
  4. We have more recently endured the Commission’s guidance on charity participation in the EU referendum. It was negative and repressive in tone, a marked contrast to the positive and balanced guidance produced from the same body of law by OSCR in Scotland and the parallel body for Northern Ireland. Charity lawyers Bates, Wells Braithwaites demolished the guidance from a legal perspective, NCVO was prompt and persuasive in its criticisms, and such was the outcry that the guidance was hastily revised to soften some of the more contested points. The core of all the criticism was precisely that the guidance lacked any statement of the kind that Shawcross has now made in his letter to Sir Stuart: there was no inkling that charities might have real expertise with which to add value to the debate (which of course they already have and will continue to do).
  5. Recall also that we heard no concern from Shawcross about the potential chilling effects on charitable advocacy of the Lobbying Bill. We heard nothing when Eric Pickles first broke the Compact with his anti-advocacy clause in his Department’s grants, nor later when the intention to roll out this repressive clause right across Whitehall was announced and Ministers like Matt Hancock kept describing charitable advocacy as the opposite of, and a diversion from, good causes and improving people’s lives (in complete contrast to the view now expressed by Shawcross).
  6. So, after failing in this way for three long years to defend the public interest in charities’ contributions to democratic debate, why is Shawcross suddenly declaring himself to be a devoted admirer of charitable advocacy? I do not know, but here are some background factors that may be relevant.
  7. Firstly, the political context has changed. Shawcross has not been one to speak out in a manner clearly independent of his Ministerial paymasters. When Ministers were irked by religious and secular charities speaking out against cuts to public services and welfare benefits and other policies, perhaps helping to threaten their chances in the forthcoming General Election, the political atmosphere was conducive to Shawcross’s finger-wagging about “politicisation” of charities. Once the Conservatives had won the Election, however, Ministers felt more secure on that front. Moreover, they had observed that those recommending charities and churches to stick to their knitting had got into hot water. Centrist and One Nation politicians do not like antagonising well known charities and churches too much or for too long. Long before Shawcross’s recent letter, the Minister for Civil Society, Rob Wilson, had begun to say that charities were welcome in the political space so long as they stuck to the rules in CC9. And in late September 2015 Wilson wrote: “As a nation we can be justifiably proud of our history of campaigning for charitable causes both in this country and abroad….It is not the Government’s intention to prevent charities from supporting, engaging or influencing Government policy. Campaigning is a legitimate and valuable activity of civil society and we support the charity sector’s right to campaign…”. Even when the Government rolled out its noxious anti-advocacy clause in Government grants across Whitehall, they were at pains to say that they were keen to uphold charities’ freedom to campaign, just not with public money. So the crude negativism of “sticking to knitting” was becoming politically out of date.
  8. On top of this, the EU Referendum campaign changed the chemistry of this issue, along with so many others. Politicians in favour of remaining in the EU were conscious that charities (secular and religious) could be weighty and influential advocates, and the Prime Minister himself called on charities to make their voices heard as part of the debate. In that context it seemed particularly inept for the Commission to put out such negative, restrictive guidance on charities’ participation. Someone, most likely a Board member, clumsily leaked it to the Daily Telegraph in advance so they could proclaim a “crackdown” on the sector before charities had seen it. Completely out of synch with the PM’s known views, this was the background to the hasty revision of the guidance. The Minister for Civil Society went out of his way shortly afterwards to welcome pointedly the contribution of charities to the debate. It hardly helped when Prof Gwithian Prins was found to have published a militantly pro-Brexit essay, leading to an investigation by the Commission and the Cabinet Office as to whether he has broken the Code of Conduct for members of public bodies. The Commission had become uncomfortably isolated politically. This may be partly why Shawcross is belatedly falling back now on the positive position on advocacy articulated by Rob Wilson seven months’ ago.
  9. A second, related point is that the finger-wagging about politicisation was not really going very well after three years. The Commission were failing to articulate what they actually meant. Each time they tried, they hit problems. They had been reviled for the “sticking to knitting” formulation. They had encountered rather a lot of strong arguments and illustrations as to why charitable advocacy is actually an important element in a thriving democracy. They had moved towards revision of CC9, then back again (for now at least). All this time, they were paying a heavy price in the loss of respect of an influential part of the sector, which cherishes the advocacy role of charities (in the manner Shawcross now says he does himself). “Politicisation” quietly disappeared from the list of the Commission’s key challenges to the sector, but the difficulties kept accumulating. Perhaps there were considerable strains within the Commission, where many staff and some members of the Board certainly value charities’ advocacy role? Who knows what internal stresses and dysfunctionalities lie beneath the shambolic history of the EU referendum guidance? So the costs of negativism were substantial. That may be another factor in Shawcross’s change of emphasis.
  10. Is there, thirdly, a dawning recognition that, even if you define the Commission’s job simplistically as that of a policeman of the charity sector, you cannot be an effective policeman without the respect and confidence of those whom you are trying to police? In this area of political activity, there is not so much that the Commission can effectively do across the whole sector by finger-wagging, vague criticism and truncheon-waving. Soft power and influence are vital ingredients. This concern is reinforced if there is to be even a distant prospect of larger charities paying for the Commission in future. Perhaps Shawcross is finding out that the respect of a significant part of the sector that turns over £40.5 billion and employs 820,000 staff is considerably more important to good regulation than he, and those who appointed him and his subsequent new Board, assumed.
  11. Nobody said it was an easy job to chair the Commission, especially when the politics change around you. Nobody fair would deny that the current Board and staff of the Commission have done some excellent work in different dimensions. But the issue of charities’ political activity has been a running sore. If Shawcross and his team were to stabilise their position on the platform of CC9, integrating rather than ignoring his most recent words to Sir Stuart, that would be a big step forward.


Andrew Purkis

26 April 2016.


“Unwelcome accretion of Executive power”: my evidence to PACAC on flawed review of public appointments

Sir Gerry Grimstone’s Review of Public Appointments

Written evidence to PACAC by Dr Andrew Purkis

  1. I am grateful for the invitation by the Chair of PACAC to those who wish to submit written evidence to assist the Committee in reaching its conclusions about Sir Gerry Grimstone’s recommendations.
  2. I write as an individual, not representing any organisation. My experience is that I have had a career as a fast stream civil servant, then as Chief Executive of a variety of UK charities, I have been Chair of the Trustees of four UK charities, a special adviser to the Archbishop of Canterbury, a Board Member of the Charity Commission for England and Wales and a Member of the Parole Board. I am now an international Board member of ActionAid, am Deputy Chairman of the ombudsman service for Higher Education in England and Wales, am a part time Executive Director of a grant making charitable trust and research and write about the charity sector. One way or another, I have made many appointments, been appointed myself to public bodies, and been on the receiving end of public bodies both good and not so good.
  3. I have serious reservations about Sir Gerry Grimstone’s report, as follows:
  • It fails to deal with some key issues altogether. The Institute of Government and the National Council for Voluntary Organisations have argued the case for a category of public bodies that need to be perceived to be above party politics and which in some cases are not responsible to Ministers, including the Charity Commission. So far as I can tell, Sir Gerry did not engage with this issue, but in my view it is of critical importance and must form part of an adequate review of the public appointments system.
  • Sir Gerry’s review embraces transparency as a principle but his review itself is not transparent. One needs to read between the lines, or read Sir David Normington’s reaction afterwards, to realise that he is in fact implying a dismantling of most of the powers of the Independent Commissioner for Public Appointments. This is not discussed openly, and there is no appraisal of the pros and cons, especially the risks. That is completely unsatisfactory. The Government’s response is also un-transparent, virtually eliding Lord Nolan’s principles as a whole with the particular principle that Ministers should be at the heart of the public appointments process. Nolan was clear that this particular principle has to be balanced against the need for public confidence in appointments as being made fairly, openly and on merit.
  • The greatest weaknesses of the review have been highlighted by Sir David Normington. His views command respect, because he spent his whole career in the exercise of power in the service of Ministers and knows the realities of that world inside out. He has also experienced the fretful pressure of Ministers on average once a month over the last few years asking why some political supporter has not been shortlisted or appointed. Unlike his proposed successor, who does not know this world, he understands that transparency without power is not enough to strike a healthy balance and avoid excessive politicisation of appointments. Sir Gerry seems to believe that the appointment by Ministers of people such as himself (he mentions the NEDs of Whitehall Departments as possible candidates more than once – he has been a NED of three such) will be a sufficient guarantee of independence, but such a major shift of power from the independent Commissioner to Ministers will be viewed with dismay by those who see genuine independence as a cornerstone of the checks and balances in the current system.
  • In my view Sir Gerry does not discuss the issue of checks and balances, and the power relationships at play, adequately. He simply asserts a set of principles and a scheme for the future, without arguing exactly what the difference is from the present system and what the risks of changes might be. He asserts that the regulator function of the Commissioner can be effective without actual participation, but does not justify this assertion and does not assess the downside. It is not at all clear exactly what powers the attenuated regulator would have or whether they would be effective. I would trust Sir David’s judgement rather than Mr Riddell’s.
  • Mr Riddell has a touching faith in “openness” but in the world of appointments it is very difficult to challenge when, for example, a Minister asserts that he has confidence that a supporter is independent minded or when someone appointed by a Minister asserts that a process has been conducted in accord with the requisite Code. The truth is, if you are not in the thick of it, you cannot tell unless there is some blatant transgression. Moreover, he seems to think that reporting something to a Select Committee is an awesome sanction, but Select Committees are composed of politicians. PACAC members will recall that the appointment and re-appointment of William Shawcross as Chair of the Charity Commission was approved on both occasions by a Conservative majority on the committee with all non-Conservative members voting against, so this will not be seen by many of us as a reassuring safeguard against the politicisation of such an appointment.
  • There are admirable recommendations relating to diversity and to the desirability of speedier appointments, but the more contentious of Sir Gerry’s recommendations are not obviously connected to these goals, which should be pursued anyway. For the rest, the warmth of the Government’s welcome for the review reinforces the anxieties expressed by Sir David that the recommendations would tilt the balance of control decisively in Ministers’ favour, removing essential checks and balances that are in the public interest.
  1. For these reasons, I ask the Committee to reject Sir Gerry’s review as an adequate basis for reform. There needs to be proper attention to important issues that he appears not to have considered at all. And the pros, cons and risks of proposed changes needs much more rigorous and transparent scrutiny and argumentation, taking fully into account the important criticisms voiced by Sir David Normington. Otherwise, any reform of the system will not carry the necessary public confidence, and will be seen as partisan and an unwelcome accretion of Executive power that has not been properly thought through.



Andrew Purkis,

15 April 2016

Public Appointments and Charities: Be Alert!

The Government intends to implement a review of the public appointments system that, in the view of the outgoing Commissioner for Public Appointments, Sir David Normington, threatens “a return to the days of political and personal patronage”. He claims that “Twenty years of progress is at risk” since the current system was set up after the Nolan Committee in 1995. There are welcome aspects of the review, such as enhanced emphasis on diversity, and on cutting excessive delays. But Sir David’s core concern is that the proposed changes will enhance Ministerial control over appointments at the expense of the checks and balances designed to give the public confidence that appointments are made openly, fairly and on merit.

The Parliamentary Committee on Administrative and Constitutional Affairs (PACAC) has not yet published its views on the review and welcomes more written evidence, but has already indicated concern that this “may be leading to the increased politicisation of senior public appointments.” Here is an opportunity for charities to express their views.

For this matters to charities. If I mention the words “William Shawcross” or “Gwythian Prins”, do I need to labour the point? Sir Stuart Etherington has just written to the Minister for Civil Society requesting a review of the Charity Commission’s governance, highlighting as a key issue the method of appointments and the sector’s interest in the Commission’s independence and neutrality. But of course this affects not only the Charity Commission, but the subject-based public bodies that are so important to many charities, and the source of information on which so many rely including the BBC itself and the regulators of the media. In many dimensions, it matters to our organisations and our users and beneficiaries that the people appointed to run public bodies are the best for the job on merit.

Why did the Government launch its review? No doubt partly because of weaknesses of the current system such as the excessive delays in appointments, but it looks as if the main driver was what Sarah Neville of the Financial Times reports as being stepped up attempts by the Government to ensure Conservative sympathisers should be appointed to public bodies since the General Election. The Prime Minister is said to have become frustrated that the system “served up New Labour people” (FT, 11 April 2016). Sir David reports that about once a month the Prime Minister or another Minister had intervened to ask him why a Conservative supporter had not been shortlisted or recommended for key posts. So Cabinet Office Minister Matt Hancock MP (yes, the enthusiast for the IEA sock puppets report and author of the anti-advocacy clause for all Government grants) asked the Deputy Chairman of Barclays and Chairman of Standard Life, Sir Gerry Grimstone, to review the system. Sir Gerry was previously a Treasury official before heading off into the merchant banking sector in 1986, and he has also been Non Executive Director on the Boards of the Foreign Office, HM Treasury and now the Ministry of Defence. It is Sir Gerry’s report, published in March 2016, that has provoked Sir David Normington’s wrath and anxiety.

Although Sir Gerry is a strong advocate of transparency as the key to public confidence, his report (“Better Public Appointments – A Review of the Public Appointments Process”, March 2016), and the Government’s response, do not seem to me at all transparent about the extent to which it deliberately dismantles many of the powers of the independent Commissioner of Public Appointments. You are left to infer this between the lines. And these serious changes are not properly explained and justified: the new system is simply described and stated as the way of best reflecting general principles, without mentioning the risks. As one would expect, best practice in the Corporate Sector is prayed in aid more than once, despite the debateable track record of NEDs in the financial services sector in protecting public  confidence and trust in that sector over recent years.

What are some of the contentious proposals? Most of the Commissioner’s powers are removed, with a consequent risk to public confidence. Now, the chair of a panel to select the best candidates for chair of a public body is appointed by the Commissioner; under Sir Gerry’s proposals, it will be someone appointed by the Minister – a big change. The rule-setting for appointments will, says Sir David, be transferred to Government and monitored by Departments. Panels will be expected to interview anyone suggested by a Minister (even if that person might not meet the criteria) and there will be enhanced powers for Ministers to disregard the outcome of a panel’s recommendations or dispense with a competition altogether. The Commissioner becomes a regulator with uncertain powers and stripped of the current actual participation in the system. It is not clear from Sir Gerry’s report why such measures are a response to the problems he identifies such as excessive delays in appointments.

Sir David’s designated successor, endorsed by PACAC subject to significant qualifications, is former journalist Peter Riddell. He takes a less dim view of Grimstone’s report than Sir David, but still has worries over the definition and understanding of what is proposed. He thinks he can achieve a lot by being more public in his interventions, even with reduced powers. He has a touching faith in reporting concerns to Select Committees, but in the charity sector we remember that PACAC was well aware of the partisan reputation and statements of William Shawcross, splitting on party lines twice in endorsing his appointment and its renewal: not much of a safeguard against politicisation!Sir David’s view, by contrast, is that mere transparency without retaining significant independent powers for the Commissioner will not do the job as envisaged by Nolan, and the balance will be tilted very firmly in the direction of Ministerial control. And Sir David knows a thing or two about how power works in Whitehall, because unlike Peter Riddell he worked for Ministers for his whole career ending up as a Permanent Secretary and has seen the fretful aspirations of Ministers at close quarters for the last five years as Commissioner.

The Government has made clear it intends to implement Sir Gerry’s recommendations: they would, wouldn’t they? There is a partial stay of execution while Peter Riddell awaits confirmation of his appointment and gives his views on implementation. If you are a charity that minds about the appointment of the next Chairman of the Charity Commission, or another public body that affects your work, or the BBC: please consider what representations you might want to make, eg to PACAC on this matter. This is an apparently technical subject, but the further politicisation of public appointments is not a small matter. The role of merit and fairness, many may consider, is weak enough already. Do you want to see it – if Sir David is right – become decidedly weaker still? Let us use our voices.