Charities in need of reform

My Times column on charities:

David Cameron, luxuriating in the prospect of weak
opposition, has a chance to think about radical reform of both the
private and public sectors. But there is a third sector that
requires his attention even more urgently. He is well known to want
to harness the generosity of Britain. To do that effectively the
charity sector needs some big thinking — because after decades of
regulatory neglect it is starting to unravel and is in crisis.

The collapse of Kids Company and the British Association for
Adoption and Fostering should ring alarm bells throughout the
sector: fear of failure or takeover is one of the things that keep
private companies effective and, for too long, charities have not
felt that breath on their neck. They have been given the benefit of
the doubt because of their noble intent.

Many charities are wonderful institutions, doing tireless work
for little reward. But too many are low on compassion and have thin
financial reserves and big pension fund deficits, making them
vulnerable to donors going on strike following revelations of
problems.

Some charities are running on fumes. Others have governance
arrangements that would never pass muster in private firms: Alan
Yentob has chaired Kids Company for 18 years. A few are little more
than arms of government delivering public services, or have become
overtly political, or covers for extremism.

A charities bill going through parliament offers the chance to
begin to tackle reform. The prime minister has asked Sir Stuart
Etherington to look into the existing system of self-regulation
under the Fundraising Standards Board. Here’s a shocking fact for
Sir Stuart to chew upon: the FRSB’s last annual report speaks of 20 billion fundraising requests
being made in the space of a year. Yet, its board found the time to
look at just one complaint — which it rejected. A body that
receives 98 per cent of its funds from the charities that it
regulates could never have been expected to bite the hand.

After years of factory trawling for funds, the big charities are
finding it ever more costly to find fish, as recent “chugging”
scandals and the plight of the poppy seller Olive Cooke have shown.
In the space of a few years, the cost to a charity of getting one
of the chugging agencies to persuade a passer-by to sign up to a
direct debit has gone up from £40 to £120, which means that even
less of a donor’s money goes to the good cause. (This leads to a
vicious circle of even less trust in charities because so little
gets through to those we wish to help.)

Here’s another issue. A parliamentary question by Lord
Marlesford recently revealed that the RSPCA has access to the
police national computer, via the National Police Chiefs’ Council
criminal records office; and that its Scottish cousin, the Scottish
Society for the Prevention of Cruelty to Animals, has — even more
surprisingly — direct access to the computer. These are both
organisations with no accountability to the electorate and, with
fundraising benefits from the PR opportunities presented by arrests
and prosecutions, this is a recipe for malpractice.

The Royal Society for the Protection of Birds runs some fine
nature reserves and conservation initiatives. But why on earth is
it campaigning against fracking — which it knows
offers far less threat to birds than wind farms do? It must be
because getting mentioned in the news keeps donations flowing.

Heather Hancock’s independent review for the BBC last year on
its impartiality with respect to rural issues found an
over-reliance of BBC newsrooms on the RSPB for virtually all rural
issues, not just bird-related ones: “Time after time, when asked
who their top contacts would be for a rural story, BBC programme
makers or journalists quoted the RSPB first.”

Many charities have suffered egregious activist entryism, to the
point where their leaders have views wildly at variance with those
of their donors. William Shawcross, chairman of the Charity
Commission, worries that old ladies who give money to the
RSPCA thinking it will help to save stray cats don’t expect its
executives to compare farming to the Holocaust or call for the end
of pet ownership.

In the case of Islamist extremism, the problem is less one of
innocent donors duped into supporting extremism than one in which
both donors and executives may sometimes be keen to disguise
extremism inside moderate charities. Such abuse of charitable status clearly does
happen.

Some charities have become little more than fundraising
businesses, who spend the funds they raise on fundraising. Take
Greenpeace, for example. It aims to save the world, but its output
consists largely of stunts, such as the shockingly ill-advised trespass on the ancient Nazca lines in Peru
last year, whose purpose was to get publicity . . . and raise
funds. The RSPB at least spends money on nature reserves and runs
conservation projects, but even it has been upbraided recently by
the Advertising Standards Authority for misleading advertising on
how much money was going into conservation, rather than
marketing.

Some charities have become overt political campaigners. Last
December, the Charity Commission reprimanded Oxfam for a poster attacking the
government’s austerity policies. The Indian government has been
cracking down on Greenpeace, saying that in “selectively targeting those
projects that were of great national importance for industrial
growth and development” it may have crossed the line “between
creating environmental awareness and creating social unrest”.

Many charities now depend heavily on government for their funds,
and yet are immune to freedom-of-information requests. Worse, they
spend some of those funds on lobbying government for policies
favoured by the very civil servants who doled out the cash to
them.

The Institute of Economic Affairs calls this
circular process “sock-puppetry”, and it is especially rife in
Brussels. It is hard not to see it as corrupt.

This is a partial list of the things that seem to be wrong in
the charity sector. I repeat that most charities do brilliant work,
including, I hope, the ones that I support. But it is a sector of
the economy ripe for the sort of radical cleansing and scrutiny
that the private and public sectors have at least begun to
endure.