Trustees of charities must fulfil their responsibilities

25 Jan 2016 03:43 PM

The Public Administration and Constitutional Affairs Committee (PACAC) finds it is the failure of Trustees to fulfil their responsibilities which lies behind the causes of last summer’s charity fundraising scandals.

Report summary

The Public Administration and Constitutional Affairs Committee (PACAC) publishes its Fourth Report of the 2015-16 session, following its inquiry into fundraising in the charitable sector.

The report warns that the Etherington proposals represent the “last chance” for self-regulation of charity fundraising. The Committee says if the trustees in the sector fail to put their house in order, statutory regulation must follow.

Ultimate responsibility for every aspect of governance and sustainability of charities, including, but not limited to, fundraising, rests with trustees. The Committee welcomes the Charity Commission's new guidance on the duties of trustees over fundraising, in particular their emphasis that trustees need to ensure that charities always act in accordance with their values, and ensure that their subcontractors do also. The Committee will also shortly bereporting on Kids Company, drawing out lessons for trustees from that case study.

The Committee welcomes the Government’s acceptance of the Etherington review, however, it says that his proposals do not go far enough. Greater transparency in annual reports about fundraising is “no more than a means to an end”. Stronger regulation is no substitute for the required change of attitudes and behaviour from trustees. Reinstating and maintaining public trust in charity fundraising is critical for the sector. Trustees must accept this in full and demonstrate it in changed attitudes and behaviour.

Chair's comments

Bernard Jenkin MP, Chair of PACAC, said:

"This sorry episode has damaged the reputation of charities across the board, including those who have behaved properly, and hindered their ability to raise essential funds. This is the last chance for the trustees of charities, who allowed this to happen, to put their house in order. Ultimately, the responsibility rests with them. No system of regulation can substitute for effective governance by trustees. 

All the chief executives of the charities that gave oral evidence to us admitted that they did not scrutinise fundraising by sub-contractors enough. The only possible conclusion is that, by failing in this responsibility, trustees were either not competent, or wilfully blind to what was being done in their names.

Trustees already have all the powers they need: they must have the right skills, information and attitude to prevent this kind of poor and sharp practice happening again. Government must monitor the sector and not hesitate to use its reserve powers if needs be, but it would be a sad and inexcusable failure of charities if statutory regulation becomes necessary."

Committee's findings and recommendations

Further information