Most charities are governed by a group of trustees who select and appoint their own successors, an arrangement that raises doubts about their accountability.
And accountability is critical in 2002. If donors' views are neglected they may put their money elsewhere, while every excluded beneficiary is another lost opportunity.
Thus it is time to rethink "self-perpetuating trustees
as the main model for charity governance. Companies (where the primary stakeholders - shareholders - call directors to account) can give insights into accountability for the voluntary sector in a number of ways.
First, donors are comparable with shareholders. The "dividend
is the pleasure of funding a solution to a particular social problem, while the beneficiaries are like consumers, receiving the goods or service being provided. Beneficiaries are also like shareholders, but they get the "dividend
of the goods or service provided. The donors, in this view, are more like customers buying a service for others.
Accordingly, donors or beneficiaries should be given greater formal powers.
We propose that charities could decide where to position themselves on an "accountability triangle", with trustees, donors and beneficiaries in each corner. (Issues that will need to be tackled include: how are the views of past donors balanced with the views of current donors, and how are the interests of the today's beneficiaries reconciled with those of potential beneficiaries of tomorrow?)
Charities are sufficiently varied so that more than one approach may be needed. And rather than prescribe the approach, we believe that experimentation is required. Charities could choose their desired place on this triangle and then think how to get there. Different governance models could then compete with each other to see which proves most effective in which circumstances.
Charitable endeavour rightly boasts great achievement, but the prevailing model of charitable accountability could be the weakest link. Perhaps it is time to say goodbye - and welcome a wider range of contestants in a competition for the most appropriate forms of charitable governance.