Many in the voluntary sector won’t be sad to see the back of 2015. It’s been an uncomfortable, even traumatic, year for the charity world generally as well as for many individual organisations, including some household names.
The Christmas break should provide some relief, but no one should delude themselves that the difficulties are going to melt away in 2016. We are only part of the way through some very significant changes in the charity world. It’s not exactly a revolution, but a substantial re-ordering is taking place.
Fundraising is the most obvious area of change. The new Fundraising Regulator is being set up, with a Fundraising Preference Service that will allow people to opt out, at a stroke, of receiving charity fundraising communications. The debate now is about whether that service should permit selective as well as general opting-out. There are also new rules about charities giving people more prominent opt-in and opt-out choices, along with impending changes on this front from the EU. One respected academic predicts that the sector could lose £2bn a year because of the new rules. Many charities are rethinking their entire fundraising strategies and reconciling themselves to the possibility of fewer, but perhaps better, donors. It’s a tough agenda.
The focus is on the future now, but it’s worth reflecting how this all came about. There was, in effect, a toxic confluence of hubris, happenstance and vengefulness. The hubris was in sections of the fundraising world and its representative body, which chose not to read the writing on the wall about the changing public mood towards industrial, data-based fundraising and failed to change its rules and practices in time. There had been plenty of warnings about the changing mood from the Fundraising Standards Board and in the sector press, but these were disregarded. It was as if people thought they could exempt themselves from the changing mood by repeating mantras about charity making a difference and changing the world.
Then came the happenstance of the Olive Cooke story, which, regardless of the facts of the case, broke the skin on that public discontent and allowed it to emerge through the conduit of the national press. Nemesis came to fundraising in the form of the Daily Mail and others, which did some notable undercover work that revealed the unpleasant approach of some fundraising agencies.
Some parts of the press have now gone beyond exposing malpractice and are proving vengeful, taking every opportunity to attack charities, even when there is little justification. The Sun’s story on how the Alzheimer’s Society spends its money was one case in point; The Times writing recently about how charities follow up legacies was another. Gone, regrettably, are the days when charities could expect a sympathetic hearing, let alone the benefit of the doubt, from the mainstream media. But nemesis, by its nature, is not proportionate.
Close behind fundraising comes governance, in the widest sense. It became clear in 2015 that trustees have not supervised fundraising properly, and the new charities bill proposes a section in charities’ annual reports to explain their fundraising strategies. The case of Kids Company also made it clear that trustees sometimes fail to ensure that proper management strategies are in place – it is a fair bet that there is a similar syndrome, or comparable failings, in other charities. The Charity Commission has tightened its guidance on trusteeship and has emphasised frequently that the buck always stops with trustees. All this is right and proper, but it has to be asked whether these developments will affect the always difficult task of attracting enough suitable people to volunteer for trusteeship and the major responsibilities it carries.
The commission is the main arbiter of good governance, but it has been a mixed year for the watchdog too. It has pressed on with its project of becoming a more robust regulator and making better use of information technology, which few would object to. But it has to be asked whether the pendulum is swinging too far in this direction with the powers proposed in the charities bill to allow the commission to issue warnings (without any provision for appeal, except through slow and expensive judicial review) and disqualify people as trustees on a catch-all basis.
The low point for the commission in 2015 was the judicial review in the High Court of its actions in relation to the Joseph Rowntree Charitable Trust. The commission had overreached itself and was obliged to climb down. The episode revealed the interventionist tendencies of some of its board members and drew attention to the lurking question of the right balance between the board and the executive, which the commission hopes will be addressed by its recently revised governance framework. Whether that will be the case remains to be seen: the next stage in this mini-drama will come when the three-year terms of many board members expire during 2016.