This is an open question for discussion - which of the following views do you tend to agree with more, and why?
a) The Charity Commission should rely principally on transparency to meet its regulatory remit
b) The Charity Commission should play a proactive regulatory role to deter abuse of charitable status
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Sorry, it's not clear to me what 'a' actually means. Luckily however, I fully comprehend 'b' and support this stance. So, it's 'b' for me, almost by default. I support 'b' because people will take the Commission (and the valuable charitable status) more seriously, if they see that there are consequences for abusing the priviledged position that comes with being the custodian of public donated funds. It could publicise more widely, its findings (when it uncovers wrongdoing). It could do this by using its media office/staff pro-actively. It could use local radio/tv. It could put it's message out there. People who see that is takes action, may think twice before undertaking something unsavory. Every other organisation does this sort of thing - local Council's, Police, Benefits Agency; they are all more pro-active in this way. The Charity Commission needs to modernise and not be afraid to speak out about what it finds. People who rip-off charities are worse than most (in my mind) as they are stealing for themselves and depriving the poor (or the sick, or elderly, etc) from getting help and assistance. Yet, you hardly ever hear about what the Commission uncovers (unless you view its website - and even then, the reports are so wordy [drafted by lawyers?] that you get the impression that they are too afraid to tell the truth). Also, it should introduce punishments that may deter abuse. How about suspending charities from the register? Does it do spot checks? Just the thought of Commission staff turning up unanounced to rummage through the paperwork woul probably send shivers down the spine of any person who is perhaps up to no good? Trading Standards does this I think.
ReplyDeleteWhat kind of statement is A? Do you honestly think that someone who is out to cheat people of their hard earned cash is going to be transparent? I agree with anonymous. Get tough Charity Commission, take no prisoners. Name and shame, random spot checks, and robust use of the powers you have got will all help to flush these people out.
ReplyDeleteI agree entirely with the first two comments. It is essential to pursue wrongdoing vigorously or the public will lose faith in the sector and stop giving. In the newsletter you ask whether the commission should only pursue cases of serious fraud. I am sure you should pursue ALL cases. This is particularly true if fraud or suspected fraud is reported to you. Nothing would generate cynicism more effectively that ignoring whistle-blowing.
ReplyDeleteWhile larger charities which are sensitive to their stakeholders (funders and beneficiaries in particular) will no doubt continue to be transaparent, the simple fact is that most charities are small and have very limited resources. Most trustees are busy trying to deliver much-needed services and have little time for governance and reporting. There are some of course who will be tempted to abuse charitable status and the high regard the public have for charities. So good charities do not have the resources and bad charities do not have the intention to make option a work
ReplyDelete(b) The Commission should investigate where its risk review indicates that it is appropriate.
ReplyDeleteAll interesting and valid comments, but I think are missing the context here; that the Commission is facing losing a third of its staff and is therefore going to have to cut back on the work it does, and not increase it. Initiatives like random spot checks for example are very resource-intensive. If people want the Commission to focus on (b) above, then this has to be balanced with significantly cutting back elsewhere or a drastic rethink in how to 'police' wrongdoing. Or, in an ideal world, getting the Government to rethink its cuts...
ReplyDeleteThe first 5 commentators have their hearts in the right place in saying that the Charity Commission should detect and prosecute wrong-doing. Unfortunately they then opt for precisely the wrong approach to achieving that goal. One of them even indicates that he or she does not understand transparency (option (a)) but nonetheless rejects it out of hand.
ReplyDeleteOption (a) is by far and away the more effective of the two options. This involves requiring charities to report on their compliance with regulations, having such reports reviewed by independant auditors and providing easily available facilities for whistle-blowers to report anything that the auditors miss. It is far cheaper, it will expose more wrong-doing and be less onerous on charities than charging around investigating all sorts of areas where there might be wrong doing but actually there isn't.
Option (a) is the way to go
Most Charity Trustees are genuine in their intention to support the purpose of the Charity. Those that are not should be pursued with vigour. It will always be difficult to discover complicity to commit fraud by a group of Trustees. Transparency would not work if the Trustees set out to defraud the public. The approval process for new charities should be rigorous, but that too might not be foolproof.
ReplyDeleteOption A is obviously cheaper, but a small number of spot checks - and publicity about them - would promote compliance.
ReplyDeletea)
ReplyDeletea) but I completely agree with the comment regarding Independent Examiners and auditors. They already have a duty to whistleblow and carry out specific procedures and report on their findings and regulated practices are externally monitored to ensure quality. Charities over £250k already have to use a professional practice and so there is already a safety net in place (albeit nothing is perfect but given cost saving must be made it seems obvious and pragmatic to accept the work being done by other professionals). However - charities under £250k do not have to use externally regulated practices, or even those who have to reglularly demonstrate knowledge of the relevant legislation - it could be a well meaning person just examining one charity. This is what concerns me if CC do place more reliance on those carrying out IE work on smaller entities.
ReplyDeleteOption A and B
ReplyDeleteTransparency and proactivity are not mutually exclusive. A primary emphasis on promoting and requiring transparency (option a) should be backed up by a pro-active (as required) role to prevent abuse of charitable status.