Charities: Public Benefit or Public Enemy?

The recently proposed new Charity Governance Code has stimulated little in the way of publicity.

In a nutshell, it has 7 principles, built on the foundation that all charity trustees are committed to their charity’s cause, understand their role and their legal obligations and are committed to good governance. 

This year, there were 165,334 charities registered in the UK, with 16,455 subsidiaries, raising some £70.93Bn. This code will apply to a lot of individuals acting as trustees in charities, which are mostly companies limited by guarantee, regulated by a Charity Commission whose budget for this year was more than £20M. The demise of Kids Company and the recent concerns about the conduct of several military charities has done little to inspire public trust in the charity sector.

One of the recommendations is that trustees should consider partnerships, merger or dissolution if others are seen to be fulfilling similar charitable purposes more effectively.  One area of interest to me is the case of research and support into brain tumours.  I read recently that in 2002 there were only 10 brain tumour charities; today I have identified 70 without any difficulty.  Leaving aside the larger, well known brain tumour charities, there is, in my opinion, a worrying number of small, possibly ineffective charities operating in this field.  

As a parent myself, I can think of little worse than receiving the news that your child has a brain tumour.  Some high-grade gliomas, such as Diffuse Intrinsic Pontine Glioma, are incurable and untreatable with only months from diagnosis to death.    I accept the need for ongoing research and the need to fund it.  However, I would also suggest that there is a need for a co-ordinated effort to ensure that money is directed at the most likely research and trials to ensure a cure is found and charitable funding is well used.

But should it be an automatic right to set up a charity in your child’s memory?  From my experience this often happens when a parent faces a life-threatening diagnosis for their child or loses a child to an illness.  It may be driven by the fact that there are limited options for treatment due to lack of research, or it may be that they feel that no other parent should have to suffer as they are.  There is also a good likelihood that setting up a charity will allow them to direct their grief and anger into something that would be therapeutic for them, not their child.  

Of the 70 charities I identified that in the brain tumour field, 22 included paediatric brain tumour research in their charitable objects which equates to 31%.  That figure doesn’t include the significant work being done by the likes of the Brain Tumour Charity and Children with Cancer.  Of those 22 charities 4 are restricting funding to Yorkshire, 2 to East Anglia and one to a tiny area in West Wales.  With an issue as pressing as this, surely it cannot be viewed as sensible and it certainly seems to be outside the proposed new recommendations?

However, of far greater concern to me, is the fact that I have identified 2 charities operating in this small group that should, on the face of it, be investigated by the Charity Commission as they clearly do not meet any standard of governance.  The first was registered in 2014 and their first set of accounts were 159 days late.  Their second set of accounts are now 160 days overdue.  The charity in question has a very good, up to date website, on which the income figures they have quoted  do not bear any relation to those been published on the Charity Commission’s website.  Why, when they can maintain a website, can they not adhere to their legal responsibilities to submit accounts on time?  This is a fundamental duty of a trustee.  Surely when a charity is funded by public donation the fundamental principles of financial accountability and transparency are paramount? 

The second charity is of even greater concern.  It was registered in 2011 and although still in existence six years later it has never once submitted accounts to the Charity Commission.  However, it does have a very active Facebook page detailing all the various fundraising activities.  It also has a justgiving page – it only has this because it has a registered charity number – and details of people who are fundraising for it.  There is also a real possibility that this charity is reclaiming Gift Aid, so public money is being solicited for this charity with not one penny of it reported via the Charity Commission.

The Charity Commission states in its annual report that one of its primary functions is “deciding whether charities meet the legal test for charitable status”.  Surely, once they have established that and awarded charitable status and all the benefits this brings, they have an obligation to ensure that the trustees meet their legal responsibilities? What is the point in devising an updated code to enhance governance when some charities are clearly ignoring basic requirements?

More to the point, with a budget of £20M funded out of the public purse, I am at a loss to understand why the Charity Commission systems fail to raise the alert and act on these failings. Perhaps pressure should be put on them to insist that a fundamental part of their role is to monitor the charities registered and ensure that they comply with the law.  With public trust in the sector waning, it’s about time that we got value for the money we spend on the Commission.  

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