Supporting the position of trustees
This year’s London Marathon set a string of records. Apart from being the biggest – and hottest – in the event’s 38-year history, it also saw a record amount raised for more than 2,000 charities.
Virgin Money Giving raised £24.2m for good causes through its platform, while Just Giving collected a further £22.3m in donations and Gift Aid.
Such fundraising success bucked the wider trend of squeezed donations. A month earlier the Sport Relief telethon raised £38.2m, its lowest figure for a decade and £19m down on the total achieved by the previous edition in 2016.
Against this backdrop competition between charities is intense; for donations, for volunteers and for trustees. And in many ways, having the right trustees is the key to attracting the donations and volunteers needed for a charity to thrive.
Here, however charities face significant difficulties. What began as a nagging problem with charities’ ability to recruit trustees has steadily morphed into a full-blown crisis.
The most recent available figures - from November 2017 - showed there were 100,000 unfilled charity trustee vacancies.
By January this year, some 74% of charities were reporting difficulties hiring the trustees they needed.
Some of this crisis can, quite rightly, be blamed on media reports of falling public confidence in charities – a trend accelerated by the high profile scandals at Kids Company, Oxfam and Save the Children.
Demographic challenge
But this isn’t the full story. In fact much of the crisis in trustee recruitment lies in simple demographics. The Charity Commission’s most recent report into the make-up of charity trustee boards found the average age of a trustee is now 61, up from a previous estimate of 57.
That’s not all; 64% of charity trustees are male, rising to 72% in charities with an income of more than £5m. Meanwhile, 74% of charity trustee chairs and 68% of treasurers are male.
Equally striking was the finding that 92% of board members are white, compared with 86% of the UK population. The survey also found 75% of trustees have a household income above the national average, while half (51%) of trustees are retired.
In some ways these figures are a reflection of the demands placed on trustees – chief among them, the ability to donate substantial amounts of time for free.
But the increase in the average age of trustees also highlights the inability of charities to attract fresh blood. The perception that trustee boards are frequently male, pale and stale will inevitably hamper charities’ efforts to appeal to a wider demographic.
Trustee checklist
Yet it is imperative that charities have a strong board of trustees equipped with the right skills and experience to enable them to raise funds, but also to ensure donations are used effectively and, of course, correctly.
There is both a legal – and a moral – obligation for charities to use the funds they receive in the correct way.
But the raft of legal obligations imposed on those willing to give up their free time to become a trustee can also be daunting.
Trustees need to be aware of not only the Charities Act 2011, but also the Charities (Protection and Social Investment) Act 2016 and now the General Data Protection Regulations (GDPR).
Trustees are also being warned they need to take out indemnity insurance, as well as being cautioned of the need to retain legal counsel separate from that of the charity.
And while the general public may not have been put off charitable giving by the Kids Company and Oxfam scandals, it’s increasingly clear that potential trustees have.
One charity has been trying to recruit a new chair of trustees for nearly two months, through recruitment sites such as Charity Job and Charity Trustee Network.
But in all that time it has only had two applications, and both were from wholly unsuitable candidates. The charity in question has subsequently been forced to recruit the services of a headhunter – an expense it can ill afford.
Legislative burden
Such reluctance among potential trustees is a consequence of the raft of new legislation introduced since 2011, as well as the lack of clarity over the role the Charity Commission plays – and the unresolved question of whether it exists solely to regulate, or also to promote – the not for profit sector.
The Commission’s new chair, Baroness Stowell, raised the issue of public trust both before her appointment and immediately after: once in front of MPs in a pre-appointment hearing and then again in her first substantive speech as chair to the National Council of Voluntary Organisations’ (NCVO) annual conference in April.
While it is important to highlight declining public trust in charities, doing so also runs the risk of becoming a self-fulfilling prophecy. Talking down the charity sector will surely only put off potential well-qualified trustees.
In the same speech Baroness Stowell gave a glimpse, perhaps, of the attitude of the Commission to those it works with. She said: “The Commission’s job is not to represent charities to the public, but to represent the public interest to you.”
This is, or at least should be, only partly true. If the Commission does not help to represent charities to the public, the crisis in recruiting trustees is certain to get worse.
But government funding of the Charity Commission is, at least for now, geared towards regulation. As a result, much of the Commission’s work focuses on enforcement.
There are those who would argue that this is entirely appropriate. That there is in fact a need to thin the herd of charities out there, that some charities simply should not exist and that there is too much duplication – with too many charities fighting for the same cause but getting in each other’s way.
There are also concerns that the sheer number of charities in the UK leaves the sector open to abuse. These have led to requirements being placed on charities – and by extension their auditors – that can only be described as onerous. Chief among them are new whistleblowing obligations placed on charity auditors, which have the potential to put them in a very awkward position with their clients.
Trustee training
Meanwhile, there is less government funding available for training potential trustees about the role they are undertaking. As a result, many new trustees risk embarking on the job without a full appreciation of the importance of their position. There are useful documents on the Charity Commission website, yet the extent to which new charity trustees are aware of this is debatable.
There are, of course, specialists who can help bridge the training gap. But for small charities already operating on a shoestring, such professional support may not always be an option.
Yet none of this helps solve the recruitment crisis. And ultimately, without a greater focus on recruitment and training of trustees, there will be some charities that fail.
That may be no bad thing in the eyes of the Charity Commission, but equally if there is not a concerted effort to help charities maintain standards of governance, more are likely to fall foul of the Charity Commission’s rules and even the law. That will surely only help to erode public trust in charities further.
