Collapse of Kids Company might have helped small charities, Lords hear

Marged Griffiths of the Welsh children's charity Y Bont tells the Lords Select Committee on Charities that the affair might have had a ripple effect that turned donors away from largest charities

The Lords committee
The Lords committee

Some small charities might have benefited from the collapse of Kids Company, the Lords Select Committee on Charities heard yesterday.

Marged Griffiths, chief executive of the Bridgend-based children’s charity Y Bont, told peers her charity had experienced a financial boost because people lost faith in larger charities when Kid’s Company closed its doors in August last year.

She was speaking as a witness during the committee’s evidence session on the challenges of charity governance, as part of its year-long investigation into charity sustainability and governance.

Griffiths told the committee it had become more difficult to recruit trustees to small charities because people were anxious about the responsibility.

But she said there had also been a beneficial "ripple effect", with former donors to large national charities approaching her organisation to donate because they said they had more confidence they would be able to see most of their donation reaching front-line services.

Shaks Ghosh, chief executive of the charity Clore Social Leadership, who gave evidence alongside Griffiths, said her biggest concern about sector governance was the fall in public trust.

"It pierces me to my very heart… that the British public are starting to question our role and their confidence in what we do," she said.

Ghosh, Griffiths and fellow panellist Eve Martin, chair of the sexual health charity Brook, all called for more support and training for trustees, and said the Charity Commission could do more to use "soft powers" to guide and support boards before turning to regulation.

The committee also heard from the Conservative peer Lord Hodgson of Astley Abbotts, who has previously led reviews of the Charities Act 2006 and part two of the Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act 2014, and from Professor John Mohan, director of the Third Sector Research Centre.

Hodgson told the committee he believed charities that had no volunteers and derived all of their income from government funding should reconsider their identity as charities.

"It does seem to me that, if you have no volunteers at all, you are slightly different type of organisation and if you depend on the government entirely, local or national, you’re different" he said.

He said he did not intend this comment as a value judgement, and he was not saying such organisations were worse, just that they were different from more traditionally organised and funded charities.

But Mohan said such rules about the percentage of income from the public purse or number of volunteers seemed "fairly arbitrary" to him, because such bodies were still offering public benefit.

"It’s not as straightforward as saying ‘absence of public benefit equals removal of privileges’," he said.

Hodgson said there were "questions to be raised" about the charitable status of fee-charging organisations such as independent schools, but warned the committee against including such questions in their final report.

"The word on the street is that you’re asking extremely good questions and there are going to be some worthwhile results coming from your enquiries," he said.

"But I daresay two or three paragraphs on private schools will probably drown out everything else you’re recommending."

Ghosh also expressed concern about the response to the committee’s final report, due by 31 March 2017, urging the committee to call for a taskforce to implement the committee’s recommendations as soon as it was published.

"We’ve had loads and loads of inquiries and reports," she said. "My fear is they don’t go anywhere."

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