Editorial: Paying trustees always entails reputational risk

There is a growing tension between the voluntary principle in trusteeship and the needs of large modern charities, writes Stephen Cook

Stephen Cook, editor
Stephen Cook, editor

Few things have united sector representative bodies so firmly as the proposal by Lord Hodgson that charities with annual incomes of more than £1m should be allowed to pay their trustees without permission from the Charity Commission. The National Council for Voluntary Organisations is opposed, and last week Navca, Community Matters, the Small Charities Coalition and the Directory of Social Change all re-emphasised their opposition.

This leaves only the chief executives body Acevo in favour, and many of its members expressed strong reservations in a recent poll: one said it would fundamentally change the nature of trusteeship. At the same time, a quarter of respondents said they could "envisage" paying their trustees within five years.

At the Commons Public Administration Select Committee last week, Hodgson defended his proposal, which would affect fewer than 3 per cent of charities on the Charity Commission register. He said large charities were big businesses and payment would help them get the right people on board; charities would have to balance the advantages against any risk to reputation or fundraising and take responsibility for the decision.

The fundamental problem is the growing tension between the voluntary principle in trusteeship, which many want to defend to the last ditch, and the needs of large modern charities. Some now want chairs to devote two or more days a week to their roles. Payment probably expands the otherwise shrinking pool of people who can afford to do that.

Payment is still very much the exception rather than the rule, and a glance at the commission's guidance shows that would-be payers have to pass a stiff test. This protects both the individual charity and charities in general against reputational and other risks. Transferring that supervisory function to the charity itself would be a major step, with obvious risks. It's a step worth taking only if it can be shown that charities with a persuasive case for payment are currently being frustrated. To cast more light on this and aid the debate, the commission should release figures on applications made, refused and granted.

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