Charities and the Charity Commission: is a re-set underway?

1. Helen Stephenson, Chief Executive of the Charity Commission, made a major speech on 21 January (to the Institute of Chartered Accountants in England and Wales) with only a month to go before the Chair, Baroness Tina Stowell, steps down. It is worth looking at the Chief Executive’s speech for signs of continuity and change.It’s a meaty speech and, if we are looking for signs of a re-set, there is some good news, but with plenty of room for further change during the interregnum and new era to come.

Helpful Points

Nearly two thirds of the speech is about operational achievements and improvements in the service to charities. That is in itself refreshing, and appears to reflect a genuine commitment to excellence and customer requirements. For example, their contact centre remained open on every working day throughout the lockdowns, with increased investment and capacity. The Commission have improved the way they deal with whistle-blowers, streamlined and simplified some rules and requirements to take account of the pandemic, and are at work on improving their online offer. She is rightly proud of the new 5-minute guides, getting the basics across in a user-friendly way. We can all welcome the sense of focused commitment to operational improvement.

There are also positive elements in a section about the fundamental principles underlying the Commission’s role. When she assures us that the commitment to the public interest is no passing fashion, we can applaud the emphasis on the public interest, because the Commission must serve, not the interests of charities per se, and not the interests of the Government of the day, but the long term public interest in a thriving charity sector. A good basis for a re-set.

It is useful, too, to be reminded that one of the Commission’s five objectives in the Charities Act is to increase (not merely maintain) public trust and confidence in charities (so long as they don’t downplay the other four).

Her personal enthusiasm for the contribution of the sector is also apparent and, I believe, entirely genuine. Nor does she downplay the dreadful challenges now faced by many charities.

I also agree with her vision that The Commission’s job is to safeguard what is essentially a covenant between charities and the public. Unlike other voluntary organisations, charities benefit from a special public status and fiscal privileges, and their obligations in return include an accountability to the wider public (as well as to beneficiaries and donors etc). She is right that the implied covenant needs more proactive protection in a period when respect for institutions generally (including charities) is no longer automatic.

She is also right to emphasise that the Commission’s work must be in part preventive, helping charities to avoid serious problems and improve their practice, as well as dealing with transgressions. We have shaken off the over-simplification of the Shawcross years that the Commission’s role was essentially to be a policeman – a one-eyed description that could not survive even a quick inspection of the remit given to the Commission by Parliament in the Charities Acts, which clearly comprises both promoting good practice and enforcement.

Areas for further work

Some of the other things she says need challenging and qualifying.

The core purpose or guiding tenet of the Commission is to be: “we continue to put the public, and the public interest, at the heart of everything we do.”  An unwavering commitment to the public interest is unreservedly welcome. But by inserting “the public” in this way, the clarity is lost. At one point in the speech she explains: “the public – that’s all of us”. But saying that all of us are to be put at the heart of everything loses useful meaning. It can also lead to the damaging conflation of the public interest with public opinion. Let’s stick to the public interest.

A further imprecision needs nailing. She says: “all charities represent the expression of people’s willingness to give time, or money, and to help others, to make a positive difference in their communities and around the world. This is the essence of charity and it is what unites charities.” No. It is the essence of all voluntary organisations, whether they are charities or not, (perhaps even including political parties), and of all sorts of informal carers and good neighbours who are not formally organised. To conflate charities and charity, as if they were synonymous, is wrong and pregnant with mission creep. Let’s stick to the distinctive features of charities. That includes returning public benefit to the Commission’s messaging from its exile during the Stowell years.

Part of protecting the covenant between public and charities is, the Chief Executive emphasises, “calling out” breaches of the law and of reasonable expectations of acceptable standards. “Calling out” should be used with caution by a body with quasi-judicial powers: it can carry connotations of playing to the gallery, which good judges don’t do. Scrupulous care and justice are not shouty qualities, and do not feature in this speech. They do, however, need to be part of the DNA of the Commission and its investigation teams, exercising huge power over a charity under investigation.

The Commission should also be very careful in claiming to “know” what “the public” expects of charities. placing behaviour in pole position. The Commission’s own research shows that by far the most important reasons people give to charities are belief in the cause and the belief that the particular charity is making a difference – not standards of behaviour. Invoking public opinion, the Commission has majored for three years on often vague and poorly-evidenced exhortations to charities to improve their behaviour, and should now progressively rebalance its messaging.

Suggestions for the Re-set

Here are a few summary suggestions for the Commission’s leadership at this opportune time:

• Build on the many good points of this speech

• Emphasise the public interest, which is not the same as popular opinion

• Acknowledge that the bedrock of the Commission’s authority lies in  the law and in the remit given by Parliament

• Continue a strong focus on operational improvements, customer care and user-friendliness

• In public speeches as in guidance, always aim for clarity and precision. Vague rhetoric is ineffective (and annoying)

• Always be clear what are the distinctive and essential characteristics of charities, which must include their charitable purpose, public benefit, and the requirement to observe charity law and the Commission’s guidance. Don’t just dwell on qualities that are shared by many players that are not charities at all.

• When referring to charities, use the word charities, not “charity”. Beware mission creep.

• Be self-aware when it comes to the limits of the Commission’s authority and effectiveness when telling Trustees how their charities should behave. Be clear that charities’ principal duty is to their beneficiaries, even while recognising wider accountability.

• Embrace justice, rigour and respect for Trustees who are doing their best, as defining features of the Commission’s investigations, compliance work and public commentary, whilst not hesitating to hold them publicly accountable for wrong-doing and promoting the right lessons to be learned.

• Try talking to responsible critics. They can learn from you. You may even learn from them.

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