Peter Stanford: We need charity laws that look after large and small

Lord Hodgson's Charities Act review went some way to addressing the challenge of legislating for different sized charities, says our columnist

Peter Stanford
Peter Stanford

It was one of those juxtapositions that rarely happen in the same day, and made me wish I had Lord Hodgson, reviewer of the Charities Act 2006, at my shoulder.

It occurred on a balmy summer evening while I was in Norfolk. In our village there is an old Methodist chapel, now run by a charity called the Yorke Trust, which nurtures young classical musicians through tuition and the chance to perform major roles.

That night, a group of 18 to 25-year-old music students had convened as part of a summer school to perform a programme of pieces and arias. Here we were, in the middle of nowhere, listening to a community-based organisation delivering a standard of work usually heard only in great opera houses. This was all thanks to a small trust managing to achieve extraordinary things on a shoestring budget.

This is one end of the charity world that Lord Hodgson wants to reform. At home after the performance, I picked up a magazine and read a profile of Trevor Neilson, partner and president of Global Philanthropy Group, "the man who advises the stars on their good causes".

Here was charity as celebrity marketing, with globetrotting goodwill ambassadors and million-pound donations to large organisations - the opposite end of the spectrum to the one I had just witnessed: a juxtaposition of high and low.

Disparity in the sector

Despite the differences, both these sides of the scale operate as charities and are covered by both the Charity Commission and charity law. How to legislate for both? That is the challenge that Lord Hodgson confronted and went some way to addressing. One solution - allowing charities with annual incomes of more than £1m the automatic right to pay their trustees - showed how acutely aware he was of the disparity between different parts of the sector.

So far, so good, you might think. Yet to enshrine the notion of a two-tier charity world feels a bit like a counsel of despair. Indeed, what might do a great deal more good than establishing one set of rules for the globally uber-successful and another for the locally struggling, would be to encourage the Brangelinas and Bonos of this world to bestow their blessing on the likes of the Yorke Trust - or better still, a small fraction of their bank accounts. That might create a more even playing field.

There are two sorts of trustees: those full of goodwill, time and expertise, who are so inspired by the work of a local charity that they decide to volunteer and find themselves on the board; and those with less time and a more finely honed expertise, be it from Whitehall, quangos or the boards of the great and good. It is the latter type that seems to populate the boards of the largest charities.

Differentiating between organisations can feel like an either/or choice: you are either a grass-roots type or a big business type. Both are valuable, but it is good to know where you flourish best.

Transition and turbulence

Problems arise, of course, when the local organisation, with its board of enthusiasts, grows to such an extent that it starts cosying up to the big boys. The local bank manager is no longer such a neat fit to oversee the finances: a retired senior figure from the City suddenly seems more appropriate to the new company you are keeping. So there is an awkward period of transition - and turbulence.

Which brings me back to Hodgson. I agree with him that trustees, like company directors, should be limited to three terms of three years each. He says this will tackle lack of rotation among board members. It will certainly allow those with the third sector gene, who feel drawn to trusteeship, to do so by directing their energies to the sort and size of charity that best suits their talents.

Get one charity up and running and then, as it gets going, bow out as your term of office expires and move on to employ those start-up skills on the next small charity. These are the links in the chain that join the Yorke Trust with Trevor Neilson.

Peter Stanford is a writer and broadcaster, and was a charity chair for more than 20 years

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