UK: Stronger Charities

Baroness Pitkeathley discusses promoting the role of trustees, the need to embrace digitalisation and how being involved with a charity is a two-way street

Baroness Pitkeathley chaired the House of Lords Select Committee inquiry into charities. The resulting report, 'Stronger charities for a stronger society', was released in March.

What is your opinion of the state of charity governance?

One of the reasons the Select Committee and the inquiry were set up was because of the rather torrid time the charity sector had been going through in recent years with Kids' Company and the fundraising difficulties and so forth. One of the main aims of the inquiry was to acknowledge just how good the sector is, how much good it does, how well it manages itself, and also to increase confidence in the sector.

And we certainly had vindication of that during the evidence sessions.

That is not to say the sector is without its challenges. The requirements of trustees are much more stringent now compared to when I set up a charity in the late eighties. That is something we have really got to reflect upon; the financial requirements and the expectations on trustees are so much greater than they were.

You need skills and expertise on a trustee board, as well as commitment to the issue. But one of the strengths of the current system is the commitment to the issues that you see all the time, and the passion and devotion to causes.

One of the weaknesses may be that you do not always have trustees with the requisite financial skills. You need to know how to interpret a balance sheet as well if you are going to manage the finances properly.

We also recognise there is still a long way to go on the digital issue and having sufficient expertise to capitalise on the possibilities that digitalisation offers the charitable sector.

In conducting the inquiry did you receive any evidence that really surprised you?

Well, the amount of evidence submitted surprised us! There was a deluge of it, with lots of people wanting to give evidence. There was a huge amount of interest.

But perhaps 'surprised' is the wrong word. We were gratified by it. Gratified by the people saying charities are fantastic, how they inspire and lead. There is a very positive attitude and that is particularly encouraging in light of the difficult time the sector has had.

There are a lot of recommendations in the report. Are there a few you feel are key?

It depends on which area you are looking at. If you look at, for example, the recommendations about funding, then we need to look at payroll giving and the continuing role of grants.

Linked with funding, but on a different plane, we have the recommendations on how to encourage better commissioning by local authorities and others.

We also need to include health services when we talk about local authorities and the role that small charities can and should play. Small charities are perhaps being squeezed out of the commissioning procedures.

So standardised contracts, encouragement of consortia – a range of things.

Then there are the recommendations around governance. These are mainly focused on training for trustees to increase skills, but also fishing in a wider pool for trustees and those involved in governance, and encouraging businesses to support people to perform trustee roles.

Then there is another set of recommendations about the actual work of charities, which includes their campaigning role, 'the voice' role. I would not want to label any one of those as more important; it depends where you are looking.

How do you strike a balance with the recommendations, particularly given charities vary drastically in size?

It is tricky. It was something we struggled with throughout the inquiry really. In our private discussions we were constantly saying 'but what does this mean for small charities?'

Is there really such a thing as a typical charity? We know the answer is no. We tried to ensure the recommendations were pitched at levels so they could apply, or not apply, depending on the size of charities.

The way in which the recommendations are being picked up by the sector itself pleases me because small charities, as well as large ones, are involved.

How can trusteeship be better promoted and incentivised to ensure a diverse range of trustees?

Diversity is something we were concerned with. We believe the trustee board should reflect the population and should reflect the nature of the beneficiaries of those charities. The pool is not sufficiently wide or deep at the moment.

We had lots of examples when we asked how people became trustees, or got involved with a charity, along the lines of 'because somebody asked me' or 'because somebody approached me'.

If somebody approaches you, they are likely to be a similar kind of person to you. We have got to widen the range and promote it beyond the current group.

After all, being a trustee is not a one-way street. You give something to the charity, most certainly, but you get something back. You get experience, you get contact with different people, you get stuff you can put on your CV. Why not promote it in that way as well?

It is also important to get more recognition with employers around trustee roles, we need to get involved with employers of a certain size to encourage them to allow time off to be a trustee.

In quite a few of our evidence sessions, people said things like 'helping a charity is not just about painting the room for a youth club'. There is currently a very limited way of thinking of how you can get involved. Think of the other things you can give. Think of the financial skills you have, of the communication skills, of the media skills, and above all the digital skills that would be of use to that particular charity, in that particular way.

Are term limits for trustees and chairs important?

Yes. We have all seen trustees who have been around for 30 years – and things have changed a lot in that time. You cannot have too many trustees on the board all saying 'well we tried that 10 years ago but it did not work'.

We did acknowledge that there were certain family trusts where the case would be different and for which you might have to make exceptions. But on the whole we thought Lord Hodgson's recommendations were the right ones [in his 2012 review of the Charities Act 2006, Lord Hodgson recommended trusteeship should be limited to three terms of three years each].

Certainly with the boards that I sit on, that is how it works. Although you regret people leaving – of course you do – and you question what you will do without them, nevertheless another suitable trustee will be found and will come in and bring fresh ideas.

Or perhaps more important than fresh ideas, they bring fresh challenges. They ask 'why have you always done it that way'. And they bring new and different approaches.

Why is it so important to maintain the voluntary aspect of trusteeship and only allow remunerations in special circumstances?

We think the voluntary aspect is very significant and important. It is a 'gift' relationship, with the gift of your time. Of course, we acknowledge that very occasionally you do have to pay trustees, but we do not want to see that as a general rule. Instead it is all about giving your time, the volunteering aspect, and this remains of great importance.

We do, however, need to offer better support to those dedicating time to charities. We recognise that volunteers do not just 'happen'. We recognise that you need the infrastructure to support them – whether it is a volunteer organiser, a coordinator, or similar. And the cost of that must be acknowledged in funding bids, because so often what happens with local authorities is that they simply cut out all of the infrastructure costs and seem to think everything can be based on volunteering. It cannot. You need people to do the recruitment, the training, the rotas, and pay their expenses. Volunteers are not cost free.

The report recommends charities evaluate their impact. How important is this transparency?

We are very keen that charities check up on themselves. They must evaluate how are they doing, whether they are fulfilling their mission and reaching their beneficiaries.

But at the same time we did not want to impose another huge layer of bureaucracy. We are very conscious that sometimes the paperwork that goes with accounting for grants or commissioning bids is just outrageous, particularly if you have several contracts. Each of them asks you to measure impact in a different way and that is a waste of time.

We need simple measures of impact. A simple question: what have we done this year to fulfil our mission? And simple checks: Are we still doing that? Are our beneficiaries still in need? Have their needs changed? We wanted to emphasise that and avoid charities spending all their time on measuring and proving their impact, instead of actually making the impact.

How do charities ensure that the hard-earned trust of the public is not lost?

Trust in charities took a knock over Kids Company and the Olive Cooke case [the 92-year old poppy seller who had been receiving almost 3,000 donation requests a year from charities, and took her own life]. However, trust is increasing again and, on the whole, the level is pretty good now.

But you cannot take that trust for granted. Just because you are a charity, you cannot assume that people will blindly trust you. You have to have a level of probity and a level of transparency in order to earn and maintain the public's confidence.

How do you ensure charities embrace digital technology more effectively?

We recommend that one of your trustees ought to have digital expertise. But also charities should have more confidence in digital technology.

We saw examples of very small charities using media very effectively to promote their cause, or you can look at examples like crowdfunding. Some of it is just a question of putting a toe in the water. Have the confidence to embrace it.

Many charities are missing a trick on digitalisation. All charities, however small, ought to have some kind of very simple website. The internet is now the medium people use to find out everything and if you do not even have a website to say 'here we are', then you are missing an opportunity.

The report recommends that local authorities and other public service commissioners adopt a partnership approach to service design and provision, involving charities and other voluntary bodies in the commissioning process. How can this benefit both parties?

Well it will certainly benefit both parties, but most importantly it will benefit the beneficiaries of services. It is the service users we have to think about, not just the benefit to the local authority or the charity.

And certainly that benefit would be much more effective if you have better partnerships between local authorities, or local health services, and the voluntary sector.

But partnership is not about designing your service and then throwing a crumb to the voluntary sector, offering them a tiny bit of it. Partnership is about involving everyone from the beginning. We acknowledge that takes time, and it takes effort, but the rewards are huge if you can do that. That also applies to the charities themselves. They have to be at the table if they are going to be involved in the design of services.

Do you feel there is still a training gap with trustees?

I think there is. We recommend that the infrastructure bodies should get together to look at training. I am very pleased that NCVO, ACEVO and the Small Charities Coalition are putting together a group of people exactly for this purpose – we had a meeting on 14 June to take forward the recommendations in the report.

The Government is supposed to respond to our report within two weeks. Well, of course that was slightly pushed out the window because of the election, but we are certainly not giving up on it.

We will certainly make sure they respond in due time, but I am very pleased that the sector itself is not waiting for that, but is actually proceeding with the recommendations in the report. I am both pleased and gratified that the sector has received the report so positively.

But rest assured, when there is a new minister for the voluntary sector, we shall be beating a path to his or her door.

What do you think the future of governance will look like?

I think there will be more interest in governance and I particularly hope we can promote this idea of being involved with a charity as a two-way street. It is not just about giving – you also gain skills and experience. The range of different experiences you can get from being a governor of a school or a trustee of a charity is immense.

But I hope that we can get people involved with charities at an earlier stage of their career. It should not just be something retired people do; the younger generation can make a huge contribution.

Henry Ker is Editor of Governance and Compliance

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