Charities need to behave
As the investment management of Charities is a key area for Savvy it was interesting to read the speech made by Baroness Stowell, Charity Chair Commission, at the Royal Society for the Encouragement of Arts, Manufactures and Commerce (RSA).
Baroness Stowell raised her concerns about the loss of trust in charities as a result of the actions of some high profile charities being reported in the media. She said:
“People have seen some charities displaying uncharitable behaviour – whether that be aggressive fundraising practices, exploitation of vulnerable people, a single-minded pursuit of organisational growth – and they have become less inclined to trust them unquestioningly.
They feel that the promise of charity has not always been kept.
That charities are not always motivated by the same sense of decency, concern and selflessness which drives the public when they donate hard earned money, when they volunteer, when they take their possessions to a charity shop rather than selling them online. When they practice their altruism through countless acts of kindness and consideration.
Charities do not have a natural, eternal monopoly over the channeling of our altruistic impulses.”
She highlighted the need for all charities to not only have a charitable aim but also be an example of charitable behaviour in everything they do and say and to hold themselves accountable for the highest standards of conduct and behaviour. As an explanation of this she said:
“What does this mean, what does charitable behaviour imply?
Ask your neighbour, ask your family, ask the person you sit next to on the train. This is not complicated. It’s simple, and it goes back to the basic charitable instinct I spoke about earlier:
- treat the most vulnerable with the utmost care and kindness
- relate to all people, including your colleagues, with respect
- run your affairs with integrity and care
- be prudent with your resources
- avoid extravagance, complacency and the appearance of self-interest
- be open, transparent and above all:
- be driven by the charitable purpose that got you on the register in the first place. And this implies a relentless focus on the welfare of your beneficiaries, rather than the interests of your organisation.”
Let me give you an example: I recently met the leader of a household name charity. They told me that, under their leadership, the charity will not compete to deliver a contract if that service is already being provided well by another local charity. Why? Because that leader understands that the charity’s purpose is to help their beneficiaries, not to grow bigger and stronger for the sake of it – or worse, at the expense of another, smaller charity.
And because they are aware that as a leader of a charitable organisation, they have a wider responsibility towards the flourishing of charity as a whole, so more people benefit. To making society a bit better, a bit kinder.
That’s charitable behaviour, that’s behaviour that separates a charity from a profit-making business, that’s the attitude, the ethos the public expect.”
She was also passionate about the need for the commission to be a more effective, robust and proactive regulator. She eluded to what the future will bring saying:
Today much of our focus is on compliance with the law. And it is right that we can only use our regulatory powers of protection and sanction within the legal framework.
But when we limit ourselves to this, it can sometimes feel to the public like we are missing the point. At worst, it feels like we are letting them down.
We also have a leadership role, and a powerful voice, and I am clear that we have a responsibility to use these.
So in future, we will speak out more strongly to encourage the behaviour that people expect. To remind charities that it’s not just about what they aim to achieve – it’s also about the behaviour they display along the way.
We must, of course, continue to deal with wrongdoing and harm in individual charities. We’ve made significant improvements in this area in recent years. But here too, there’s room for us to become more purposeful, more efficient.
For example, in future, I want us to make better use of technology, to become more fleet-of-foot in concluding straightforward enforcement cases.
And I want to ensure that no complaint about a charity is ignored, so that those that don’t result in regulatory action do inform our trend data, and in turn help us become more proactive in preventing problems in charities in the first place.
I also want us to provide a better service to trustees who are trying to run their charity well. To provide advice, facilitate collaborations and mergers, provide swift and user-friendly permissions where these are required. More fundamentally, to back the people who demonstrate what it means to be a charity.
And crucially, the Commission must do more to help the public exercise meaningful choice around charity.
As many of you know, we hold, and display, significant volumes of information about individual charities. And we provide data about the sector as a whole.
But I’m not convinced that the way we gather, hold, and report information about charities is as purposeful and useful as it should be.”
It would seem that Baroness Stowell and the team at the charity commission have most definitely got ‘the bit between their teeth’ and will be continuing the work started by William Shawcross to make sure that those that want the benefits enjoyed by having charity status live up to all the requirements. The general public should also be reassured that if the commission do find an organisation that is not upholding the rules, in whatever form, then the commission will deal with the Trustees accordingly. Her final comment was an important one:
“I want us to work together to ensure that charity, which is so crucial to all of us, fulfils its potential, and thrives for the benefit of our society, and the most vulnerable within it.”
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