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.

 

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2 thoughts on “Helping Trustees to Oversee Fundraising

  1. Dear Andrew Excellent posting. Thank you. Karen PS From my recollection but maybe my memory is faulty and so for your interest only, I think Ken introduced the poor person (rights holder) chair, I added the supporter’s chair and in my time there weren’t three chairs so social movement chair must have come later. Also the presence of the chair(s) was most often honoured in the breach. But I could have this wrong as I wasn’t ever ‘chaired’ by Ken.

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