“It’s quite simple”, declared William Shawcross, Chair of the Charity Commission Board in September 2013: “the Commission must fulfil its primary role as policeman of the charity sector”. As his third year in post draws towards a close, how is the policeman getting on?
The message oft-repeated by the Commission is indeed quite simple and goes like this:
1. The charity sector depends on public trust in order to sustain its tax advantages and above all secure money and volunteering from the public for its work.
2. The most effective way in which the Commission can buttress public trust is to concentrate on promoting compliance by charity Trustees and on holding charities accountable. This is the slimmed-down function that must be protected from further budget cuts.
3. The sector must also be warned against behaviour that erodes public trust: these have been identified by Shawcross at different times as including subversion by terrorism, abuse of vulnerable beneficiaries, (ill defined) “politicisation”, fraud, apparently excessive executive pay, and unacceptable fundraising methods.
There are strong arguments in support of this approach. It might even arguably have shored up the Charity Commission as an institution, when it had been condemned by the Public Accounts Committee (PAC) as not fit for purpose and was threatened by ferocious budget constraints. In an era of Conservative ascendancy, in a period of austerity, and with a view to the temper of the PAC and the Public Administration Select Committee (PASC), it was necessary and smart to focus on the slimmed down role, and on the Commission’s part in addressing terrorism and other forms of illegal or unethical behaviour. Shawcross and his Board have maintained a crucial constituency of political support extending through key sections of the Conservative Party and Ministers to the PAC and the Conservative-leaning press, not least the Daily Mail. That achievement is real and has produced some more funds for policing activities. Many people who are not in that political constituency would also agree with substantial parts of the Commission’s key messages. Shawcross has sometimes talked about his Board’s doing their best in difficult circumstances, and plenty of observers within and beyond the charity sector would accept that. He is also said by some to be likeable, to have the best interests of the sector at heart and be ready to listen and engage.
There are, however, a number of problems with this narrative.
Firstly, although Shawcross is not a member of any party, the narrative has become closely identified with parts of the Conservative Party. It is ironical that the Commission Board, whose job includes ensuring that charities do not become party political, has allowed itself to appear closely associated with a particular political tendency. The vote on the PASC to confirm Shawcross in post (before the General Election) split on party lines. That is a most unfortunate basis for perceptions of impartiality. Shawcross has rightly emphasized and successfully demonstrated the Commission’s independence from the charity sector – but not from the Conservative-led Government of the day or Conservative sentiment.
Secondly, and linked, we cannot now look to the Charity Commission for an authoritative, independent and well informed view. I have just re-read William Shawcross’s various speeches since October 2012. Too often, he has waited for a political row or media storm started by someone else and then joined in on a “Me too” basis, no doubt winning approval from strategically placed politicians and media but risking loss of respect elsewhere. On a whole string of difficult issues for the sector, Shawcross’s approach has usually been to wag his finger in time with Government and Conservative-leaning newspapers rather than aim for a different perspective and balance. He did it again in The Times on 1st August. A distinctive, detached voice that could have really mattered in public debate on the Lobbying Bill, or Muslim charities and extremism, or the political activities of charities, or fair pay for charity executives, or fund-raising methods, has not been heard.
Thirdly, the policeman analogy is over-simplified and misleading. There is a reason why regulation and policing are different words. The Police are there to enforce the law and prevent crime. The Charity Commission is also there to identify and encourage good practice and even assist those wanting to set up a charity, find new Trustees, or consider a merger. That is why it spends so much time emphasising what charities should do (good practice) as well as what they must do (the law). Imagine if the sum total of its overall aim to uphold public confidence in charities was limited to charities’ not actually breaking the law!
Fourthly, Sir Stephen Bubb of ACEVO has made a valid point that Shawcross has come to focus so hard on the general public as donors, volunteers and supporters of charity that he has tended to lose sight of beneficiaries. When he first took over the Chair he told the ACEVO conference in November 2012 (a month into his reign) “It’s the impact charities have made and continue to make that matters….impact on the immediate lives of their beneficiaries. And impact on wider society.” He added: “Independence is about making decisions only on the basis of the best interests of the charity and its beneficiaries. Not the interests of funders – including Government.” Amen to that. But the policeman since seems to have forgotten that and become much more interested in propriety and reputation among the giving public than in impact on beneficiaries. Thus in March this year he reports uncritically: “How a charity spends its money has become the most important factor in driving public trust. This is now more important to people than whether a charity is making a positive difference to the cause they work for.” He did not mention that Trustees’ main obligation is to their beneficiaries and to making a difference. In the same speech, he says “I understand that we must keep listening to charities. But we balance that against our role as regulator of charities on behalf of the giving public.” Yet the giving public is only one important constituency. Similarly, when he talks of promoting “accountability” alongside compliance, he does not seem to include accountability to beneficiaries and users at all. His expressed understanding of the public interest in charity has, in this way, shrunk. Nobody can doubt that the giving public is an essential constituency. It is, however, wrong to equate it with the wider public interest in charity.
Fifthly, when he took up his role as Chair, Shawcross knew very well the importance of non-party political activities by charities as part of achieving impact for their beneficiaries. In his first major speech he praised charities’ role in “speaking out”: “Voluntary organisations have always sought to change the conditions that gave rise to the need for their work”. How long ago that now seems! Within a few months Shawcross was naming the “politicisation” of charities, which he did not define, as a challenge on a par with fraud, terrorism and abuse of vulnerable beneficiaries and one of his Board coined the phrase about charities sticking to their knitting. I have written more about this disappointing record elsewhere (see my blog of 21 April 2015 “Charity Commission and Political Activity – Back into the Fog?”) For whatever reason, there has been no public appreciation by Shawcross of the contribution of both religious and secular charities to democratic decision-making and speaking truth to power since that very first speech. His handling of the issue has lost him and his Board respect among many people who value this part of the charity sector’s role.
Sixthly, many policemen will be the first to tell you that the respect and trust of those who are being policed is key to success. Given the examples already enumerated, it is unclear that Shawcross and his Board place any weight on this consideration. A regulator with a budget cut in half in the last few years can only achieve so much through truncheon waving, finger-wagging and bringing a tiny proportion of charities to book, important though they are. Soft power, respect and influence matter too. It is impossible to generalise about the views held about the Commission by such a vast and varied sector, mostly composed of small organisations with no staff. But a draining away of respect among a substantial part of the most influential, best funded segment of the sector, turning over £40.5 billion and employing 820,000 staff, is no small matter.
Part of the problem here may be attributable to Shawcross’s appointments. Apart from one of his Board members, Claire Dove, who runs an admirable social business with charitable status and is a leading social entrepreneur, the entire Board and senior staff of the Commission put together have, so far as I can tell, no experience of working as staff in a medium or large charity. This is the first time that has been the case since the early 1990s. To avoid being cosy with the sector, and on guard against pre-occupation with relatively big charities and their staff, is good. To dispense with any experience at all of working in such important charities is an error.
Finally, there is a potential paradox about the finger-wagging and compliance-dominated style of regulation, when it comes to maintaining public confidence in the charity sector. The swollen procession of miscreants publicly paraded through the press office of the Commission may be a mixed blessing for public trust. More important, if you over-do the “Me too” reinforcement of political and media criticisms, without offering a distinctive perspective, you can collude with popular misconceptions and end up further eroding the public confidence you are trying to maintain. You become part of the problem when you were hoping to be part of the solution.
So there are some strong arguments for the Shawcross version of “policing” the sector. But overall – perhaps this “simple” role is due for a re-think and re-balancing.