Trustee payment will damage public confidence in charities, sector leaders warn

Umbrella bodies and the Directory of Social Change tell Nick Hurd, the Minister for Civil Society, that adopting the proposal by Lord Hodgson could lead to recruitment problems

Nick Hurd
Nick Hurd

The proposal to allow large charities to pay their trustees without the Charity Commission’s consent lacks support and would be damaging to public confidence and the charity sector, sector leaders have warned Nick Hurd, the Minister for Civil Society.

A joint response from the chief executives of the umbrella bodies Navca, Community Matters and the Small Charities Coalition and a separate response from the policy body the Directory of Social Change, both warn against introducing the measure, proposed by the Conservative peer Lord Hodgson in his review of the Charities Act 2006.

Hodgson’s final report contained 113 recommendations, including a proposal that charities with annual incomes of more than £1m should be able to pay their trustees without gaining consent from the Charity Commission, as is currently required.

The response from Navca, Community Matters and the Small Charities Coalition, says: "We oppose this recommendation and think it will be damaging for the sector and public confidence. There is no evidence that paying trustees results in greater diversity on boards or better governance.

"We are also concerned that such a measure could lead to problems in recruiting trustees if an expectation of payment is created that small and medium-sized charities with low levels of income these charities cannot fulfil."

The DSC response says that it "completely opposes" the proposal.

The Navca, Community Matters and SCC response also cautions against introducing charges for registration and filing accounts with the Charity Commission because it would disproportionately affect smaller charities, it says.

The DSC says it remains "adamantly opposed" to the suggestion.

The response from the three organisations says the proposal to raise the annual income threshold for compulsory registration with the commission from £5,000 to £25,000 requires more thought.

"We are unconvinced that raising the threshold is the right approach and lean more towards considering this recommendation as ‘red’," the response says. The Cabinet Office asked organisations to use a traffic light system to demonstrate the level of support they had for various proposals.

"Registration with the Charity Commission is vital for fundraising because a significant number of trusts and foundations do not support unregistered charities," the joint response says.

The joint response says that the suggestion that charities with incomes of less than £25,000 a year should be listed as "small" on the commission’s register could create a two-tier system.

The DSC also warned it would be damaging for small charities.

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