Heavy Hand
Jul 9 2017
Charges for Regulation by the Charity Commission or is there an alternative option?

Average Reading Time: 7 mins

In 2015 the Charity Commission head, Paula Sussex, advised there were talks ongoing regarding charging to keep the Regulator a float, while in March this year the treasury gave the all clear for the Charity Commission to formally look into the possibility of charges and costs.

This a very current and heated issue, which i’m still very conflicted with. On one hand I do very much agree with William Shawcross, believing the largest Charities should be contributing to the regulator to fund the costs of regulating the majority of smaller charities (that’s probably the socialist in me!) – but should it not come from public taxes?

As far as my opinion goes the Treasury already supports charities quite well with their Gift Aid Schemes and other tax benefits for registered Charities. While most would say any charge for regulation should go to those who benefit from regulation, but it cannot be that simple as you can’t really charge Homeless people or animals, rare trees, users of foodbanks, cancer patients, and the list goes on. One thing all charities have to have in common, by their very nature, is that they are to benefit the Public, mostly certain specific areas or selected groups of people but over all the benefit is to the public.

The problem with this is you can’t charge those people who are using the services, you can’t charge employees, you can’t really charge Trustees as they’re offering their governance for free and you don’t really want to increase taxes to the public (as that would result in public resentment and criticism of the Third Sector and political scapegoating of the industry too). This really only leaves the current government budget being increased from its current point which means budget will need to be gathered elsewhere (We’ll shy away from current party politics and fiscal policies for now). We’re left with the following options to gain some budget back to effectively regulate;

  1. Charities to pay
  2. Fines/Charges to charities
  3. Companies
  4. Gift Aid Scheme changes
  5. Match Funding
  6. Mixture of the above

CAVEAT: with my current experiences with the regulator I do not believe it is fit for purpose regardless of how much money you throw at it.

Lets look at some figures;

Charity CommissionCharities
  • An organisation which can spend £5000 on creation of a new logo; I’m all for marketing, but when the organisation is not achieving what it needs to and the main reason it provides is budget then this expenditure shows the core aim is not the true focus.
  • increased spending on agency staff, which almost tripled from £900,000 to just under £2.7m in 2015/16 which to me says their HR function is not appropriate either (now hiring new HR management as of 7.7.17)
  • The Charity Commissions own report said it hit 16 out of 17 of its internal targets – who created them – why has Parliament not set targets in line with Third Sector organisations requirements?
  • In 2015 there are around 2.5 organisation for every 1000 people 1 , I like that statistic as indicator, it provides a clearer view of just how many charities there are.

As of December 2016 78% of the revenue brought in by charities is received by the top 1.3% of charities (2201) organisations 2 , to make up the current funding for the Regulator at least to its current level (matching what they receive now)

Options

1. Charge Charities

Lets look at some options;

  1. Charge each of the top 1.3% of charities would need to be charged over £9,500 each – possible given their size but unfair to the beneficiaries of those specific organisations.
  2. Charge each charity evenly you’d need to charge each of the 167,109 around £125 each, much more reasonable but hardly fair that a £5000 per annum playgroup is charged the same as a £25m+ charity, but then again each charity is under the same regulatory requirements, oversight and authority.
  3. Charge on a graded scale so based upon income the below table shows charging each charity just £35 per year (appropriate to cost for administration of the charity status) and also fund the Regulator, while the largest 2000 charities would be £1500 per year, a small percentage of the >£5m per year incomes. This would provide the regulator with a few hundred thousand pounds more than their current budget
Annual income bracket Number of charities % Annual income £bn % Annual Charge* Total Annual Charge
 £0 to £10,000 65,842.00 39.4  £                                0.22 0.3  £                35.00  £               2,304,470.00
 £10,001 to £100,000  56,853.00 34  £                                2.01 2.7  £              100.00  £               5,685,300.00
 £100,001 to £500,000  21,956.00 13.1  £                                4.83 6.6  £              250.00  £               5,489,000.00
 £500,001 to £5,000,000  8,972.00 5.4  £                              13.41 18.4  £              500.00  £               4,486,000.00
 £5,000,000 plus  2,201.00 1.3  £                              52.65 72  £           1,500.00  £               3,301,500.00
 *My example of Charge Total  £             21,266,270.00

2. Fines/Charges

The current law requires charities to file their documents on time, and the burden is on the Trustees to do so, if you are not able to do so then you should not be signing up as a Trustee, I believe a fine for not filing your books is needed to encourage clear lines between the disorganised and the effective. Currently there has been an ongoing inquiry for those charities which have been late filing their books for more than two years, the cost of this inquiry will be massive, yet this could have been recouped if the charges were like other documents where the trustees directly are fined, not the charity! This will make certain the documents are provided on time and prioritised jointly by all trustees. A fine of either £100 in total split between the Trustees, or £50 each per Trustee should discourage ignorance of a legal requirement.

3. Charge / Tax Companies

The £2.1bn contribution of the FTSE100 companies in 2014 3, I couldn’t find any record of more current figures, but lets just use £2.1bn as an example – not forgetting this is just from the FTSE100 companies, not any other company than ones listed on the exchange – if just 0.02% of this had to go towards regulation it would bring in £42million to the regulator, this could again be easily enacted and would put administration of such matters on to the accounts teams of the FTSE100 which would be easily able to support this function. 

Some Charges/fines I think may appropriate to Charities themselves;

  • Application Fee – a set fee to process the application to register, this may be £10/20 only, but will add up and cover some costs
  • Authorisation Fees – to request authorisation to pay connected staff, or payment of Trustees or release of land for sale etc
  • Constitution changes – I think non default Constitutions should be charged to be reviewed correctly (although some of the default docs I think could be improved)
  • Late Accounts Fine – fine should be appropriate if the accounts have to be sent back to the charity as insufficient/inadequate
  • Missing info fine
  • Not updating Trustee info
  • Any other misgiving which relates to a requirement

4. Gift Aid Changes

In 2014/15 the UK government provided £1.19bn in gift aid to charities 4, this may be a cleaner option by providing say 24% gift aid rather than 25% the other 1% could fund the Regulator.

This would mean 4% of the £1.19bn going to the regulator, providing £47.6m to the regulator, which is a few million more in real terms of what they received a decade ago. The benefit of this is that its simple! Doesn’t add to the additional administration of the regulator and provides and appropriate and proportional income which would vary on the income of the sector.

Major Caveat: Charity Commission

Commissions current proficiency in respect of what is not only needed by charities but also what is needed by the beneficiaries of those charities does not seem to be inline. The commission currently has little open channels for the public to request help/support or advice while those charities which are abusing the law have little way of guaranteeing action and consequences to the abuse. If the commission is to continue without holding responsibility for prosecutions of those abusing charities then the funds must come from the commission’s budget and be passed to Crown Prosecution to action those needs. Very few people now believe the commission provides value for money or does what the law intended it to do. My own issues with an abused charity have taken over 3 years for the commission to open an inquiry. That is ridiculous that abuse can be ignored like that for such a period of time, regardless of what budget they have available, there are charities up and down the country struggling for funds and they manage to achieve much more!

Lets not forget this is just for England and Wales – Scotland and Ireland have their own regulator!

Public bodies like this do not usually lose their budgets without warning, nor without not showing theirs benefit themselves! The Charity Commission needs to stress, without reservation, the issues prevalent in the third sector to show why money is needed and why regulation is vital! As far is public knowledge the Commission has not delegated or partnered with other Charity organisations to support their workloads! One of the first things I would have done was make certain the day to day drivel from Mrs Jones and her WI meeting was passed over to an organisations like CVCs, those people who wanted hands on supporting advice should be passed to those local organisations created to do so!  The regulator should be concerned with regulatory matters and their litigation to protect the industry and the massive amounts of public funds which goes with it.

Conclusion

In the end Charities are there to mop up the errors and misgivings of parliament to protect the public interest, it should be the government which provides the needed funds to regulate and police the industry properly. Charity abuse is one of the most detested of all abuses and those volunteering for them of their own free time must also see some protection and guarantee that when issues are exposed they are corrected swiftly and those responsible are punished sufficiently, where necessary. Sadly the Commission is already funded by Taxes paid to the government by the people of the UK, if they’re then going to charge Charities too, who are doing the jobs which are only created by an inefficiency of government mechanisms then essentially people are being taxed twice as they will pay from their taxes and from their donations to the charities.

The main problem with other options is that the Commission cannot implement or control it and only the Government may say that its a more appropriate option. My expectation is that the commission will at some point advise that charges to each charity are going to be put into place, no matter how many disagree with cost being fulfilled in that way

Daniel Rose 0 Comments
Jun 16 2017
Does the Charity Commission even know what charity is?

Average Reading Time: 2 mins

After reading an article in The Guardian by Geoffrey Robertson QC about the Charity Commissions refusal to provide the HDT registration as a charity in 2014, it got me thinking about the registration process and how not once does the law give any regard to moral principles.

This is certainly understandable but I wondered how many of the general public would be aware? – If a charitable cause fighting for rights of a group of people can be declined Charity Status (although this has since been revoked and they are now a charity), I wonder how many of them payed attention to the cost attributed to this decision, which essentially means the funds are reduced to spend on support of all other charities by the body – added to removing funds from the valuable work of the HDT. The casefile from the tribunal states “It is important to record that the Charity Commission made clear in its decision, and indeed in its submissions to the Tribunal, that its objections to the registration of HDT were technical legal ones and that it recognised HDT’s valuable philanthropic work in the field of human rights” So this means they added a legal burden to this charity to instigate a tribunal because of their own ‘technical legal objections’.

What does this say for the state of the Charity Commission decision makers who declined this group? Or that a processes hasn’t been created to allow the commission to make this decision, after all they have the power of the high court as stated in the Charities Act.

I can understand the Charity Commissions stance that an aim to change law may be perceived as political, however the aim was to protect individuals by changing laws which persecute them…..how can that NOT be a charity in any view?

I think this case should have hopefully made clear some issues with charitable wording, however this shouldn’t have been needed and certainly not in the way this has had to have happened. There should be a clarification of political purpose and an extension to be very specific.

Fighting for rights to specific subset, one which does not remove other living beings rights

What if they were fighting for rights of another group, more decisive? Lets say they were fighting for rights of people who want slavery to return, this wouldn’t be allowed as not only would this be a ridiculous cause, but it clearly fights for rights that remove others rights and dignity.

Any organisation which fights directly for rights of a demographic that doesn’t ask for rights to be removed from others to achieve their aims MUST be a charity, regardless of what risks this poses to UK foreign relations. Although its written in law that the High Court must take into considerations any foreign relations and not judge upon their laws, the UK has a responsibility to the world in standing up for rights of people, regardless of what political impact that may have. By not allowing the register of a charity like this, they give legitimacy to countries who do destroy human rights, that in itself is a worse political statement for the UK.

The Human Dignity Trust have even been praised by Ulrike Lunacek, Vice-President of the European Parliament;

Daniel Rose 0 Comments
Jun 16 2017
Charity Commission and Ethics – are they taken into consideration?

Average Reading Time: 2 mins

Ethics is a very important, nay critical, aspect of Charity. We all have a moral obligation to protect, promote and defend charities, after all they do good work? Its this element that is questioned although charities have an objective which is required to be for public good, how much is actually given to ethical conduct?

Ethical Investment &Fundraising

There is plenty written on ethical investments, not only for charities but becoming more popular for consumers to appreciate in corporate world too, these investments can be criticised greatly from the Church of England investing in Arms production to Comic Relief owning shares in tobacco firm. These were criticised by the public for going against what they do, however I’d  take this one further – we shouldn’t allow investment of charities into things which other charities fight against, hows is it possible that there are so many charities fighting war torn countries, yet other charities can invest in arms production, what about all those fighting against animal cruelty (hats off to the charities who do not support, condone or fund animal testing), when there are charities pumping massive amounts into companies which fund animal experimentation. This cycle shouldn’t be possible, but i would go as so far as to say there should be one ethical investment charity, which controls the morals which investments can be made – no charity should fund arms, animal experimentation (Support the cause), tobacco, large pharma, salve labour or even invest in countries whos human rights are suspect!

I know there is much criticism on the moral decision to take profits but is it really better to take a donation from an organisation which is ethically dubious and use those funds for good, or is that only ever going to protect that organisation? I believe its the latter

http://www.victimsofcharity.org Don’t Leave a Legacy of Suffering

Issues to think about

  • Wealth
  • Gender
  • Animal Welfare
  • Environmental impact
  • Worker rights
  • Political concerns/connections
  • Rate of change/change adoption/flexiblity

Ethical Conduct

How do you confirm a charity is not only using its funds ethically but both professional and truly working for the cause itself? I’m not sure there is an answer here, but I believe complaints and issues within a charity need to be more publicly available, a key statistic would be the number of whistle blowing complaints of the charity (be they investigated or not) that figure would give a better impression of what the internal staff and volunteers believe to be the ethical standard – only those who are suspicious of dubious activity would complain, the more complaints the more its is a reliable figure to require investigation – clearly something is wrong if there are multiple whistle blowing from inside of an organisation. I wonder if the Charity Commission actually has set limits where enough complaints come in for there to be an automatic investigation into the charity, I feel there should be but very much doubt there is any such policy.

Daniel Rose 0 Comments
Jun 16 2017
Why is the Charity Commission ignoring the main poison of the industry?

Average Reading Time: 17 mins

Founders are habitually viewed and treated with eternal appreciation and respect, only to rightly for the majority, but occasionally there are founders who disastrously overstep the mark and turn the organisation they started, into a personal fortress of control and power. I know first-hand the severity of the situation, as I’ve been dealing with it for the last 16 months. The no.1 poison of the Charity sector? Founders Syndrome.

Most nonprofits owe their success and existence to their founders, they have invested many years of their lives which is a substantial investment in what is normally their passion, it is obviously not easy to take a step back or to concede that delegation is the best opportunity for the organisation and spreading of decision making will make the best use of knowledge for their passion. Most founders are brilliant and this is not a brush to even tar 1% of founders, this syndrome is only really an issue for a minute percent, but the problems caused can create chaos in many forms and negatively affect the whole industry.

Let me first of all clarify, in no way am I an expert in any medical fields nor would I say I’m fully versed in this particular syndrome, but I will say we’re dealing with one of the worst kinds of Founder’s Syndrome as we are an Animal Charity, and with a particularly determined and divisive founder.

My experience in the commercial world, gave me a good insight into particular unique quirks of personality and trained me very well in spotting them and managing them, this was a massive benefit in the third sector as I found managing volunteers that much simpler, I put the main reason down to them actually wanting to be there to help rather than for a pay packet, but still my training I had always been told “if you can manage volunteers you can manage anyone” so had expected a lot worse.

A scourge on the Charity Sector?

The reason Founder’s Syndrome is focused on the third sector is due to the problems affecting public funds, which are provided to the charity to support, with maximum efficiency and effectiveness, the cause publicised. While private organisations are supported by private funds having many more regulations enabling recompense for issues caused by their founders, along with the founder’s personal liability for issues and mismanagement. Once a charity is formed it takes on a separate entity to the founder and is its own being, with the publics benefit, trust and accountability. There is no ‘ownership’. Frequently public perception is that the Founder ‘owns’ the charity as they have been consistently reminded of the founders hard work, ignoring all other volunteers who have worked hard for the cause.

The symptoms themselves are by no means confined to charities or just founder-led organisations, they’re also not universal and each founder can display varying levels of symptoms which are normally moulded by the industry they lie in. The control can be sought in personal benefit, inappropriately employing friends and family, possibly with phenomenal compensation packages or fringe benefits. Sometimes it is pure and simply a question of ego, but whichever the symptom or severity, they believe the problems are never their own causing.

The syndrome has many descriptions available for what the indicators are, but I think they can be reduced down to four core symptoms (reworded from Hildy Gottliebs article);

  • sense of superiority, dominance, eminence or ownership
  • inability to or want to delegate
  • unwavering fidelity to their original vision – with ignorance of the effects and mission creep is ignored as it is ‘their’ original vision that is focused on not the constitutional one the charity itself was founded for
  • inability to make a smooth transition

Just some examples of the symptoms, which include many we are facing;

  • Gives short shrift to planning activities, staff meetings, and administrative policies and amends them to suit reasons other than the benefit of the charity;
  • Is reluctant to relinquish strategies and procedures that worked in the past, although circumstances may dictate new approaches;
  • Neglects to institute new systems, even though the board has formally requested them;
  • Seeks and accepts little input from others in making decisions;
  • Sees all challenges as hostile and drives away volunteers, staff and board members perceived as disloyal; and
  • Refuses to delegate any authority;
  • Selects submissive allies/staff who will agree with their campaign and not challenge;
  • Count on whomever seems most loyal and accessible;
  • Motivates by fear and guilt;
  • The board is recruited by the founder, rather than by the board;
  • The board supports the founder, rather than leads the organisation – often due to a lack of understanding, sometimes purposely hidden by the founder to ensure control;
  • Turnover of volunteers, staff and board members is high;
  • Place their personal agendas ahead of the mission;
  • People become afraid of the founder;
  • Threatening that no-one else could complete the task and exaggerating their role.

For a direct example I suggest you watch the public investigation into Kids Company and questioning of Camila Batmanghelidjh, which shows exactly the symptoms to expect when questioned about control, and is exactly what we face with our own founder;

  • Inaccurate and Inconsistent answers to simple questions, masking limited knowledge, or hiding false information,
  • Rambling to questions and side-tracking the information needed – ‘verbal ectoplasm’ is a great description of this and very apt to our founder,
  • Answering the question they want to answer, and not the one what was asked of them – this is normally to self-promote and is easy to answer a question which has been rehearsed than one on the spot,
  • Not admitting any mistakes, blaming others and making excuses – humans are all prone to an amount of error, but by not accepting this its empirical evidence that control has not been delegated efficiently and decisions have not been researched effectively.

I have read from several sources that as denial is a major part of the Syndrome, it is impossible for a founder to defend themselves without concurrently emphasising the symptoms themselves. This is incorrect, if a founder does not have founder’s syndrome they will have clear evidence that control and decisions have been made by majority votes and that tasks are efficiently delegated, any assumption that a founder is being pressured or bulldozed cannot be supported as any instance where this is the case will be stopped in its tracks by evidential reasoning and confirm the implied does not have founder’s syndrome. Although they may have the starting symptoms of it and the board may be quite rightly clamping down to make certain the symptoms are not extended beyond short term.

“ I would be remiss not to say…that there can be exceptions — but the exceptions are so rare that anyone assuming that their situation is different is most likely wrong.” – Henry Lewis, Charity Channel in 2002

Does every charity risk Founder’s Syndrome?

There are inevitable lifecycles which every organisation which subsists long enough to reach regardless of industry or profit status. These points are normally reference to corporate structures and little, well known, information is out there on charitable lifecycles as the majority are too small to conform to it, while the larger entities are able to utilise modified version of corporate lifecycles.

My preferred model provides the core stages as Founding, Growth, Stability, Expansion, an endless chain where expansion feeds into growth, or can just pause on stability for those smaller organisations who have no desire to take more on (most small charities), the problem for most Fonder Syndrome infected charities is that the expansion is not governed properly, it could be within the first year or in year 15, but until that point a difficult founder has been only that, founders syndrome is only applicable when it causes problems to the charity, volunteers, trustees if it’s not negatively affecting the charity then you just have a strong (nay difficult) founder. Now when I say causing problems, this can be anything from not letting the board review plans to not allowing them access to the bank account, some may not be directly negative but will mean the control facilities are not allowed to be in place to govern the organisation properly, this is a problem! So it is only those charities whose controlling parties exist with very little external control mechanisms that are at risk.

How to overcome founder’s syndrome

There are plenty of ways suggested to “get around founder’s syndrome” but how many of those are workable? Many of the suggestions are all about putting facilities and policies in place early on in foundation of the organisation, to protect the organisation from founder’s syndrome but this means a founder would have to admit control issues early on and is very unlikely that others could suggest such a thing while the charity is starting as the founder is normally the instigator of all plans and motivation. Other suggestions relate to the board getting outside advice etc, but this relies on the assumption that the board are nominated correctly and not subject to pressure from the founder, which in many cases is how it happens as the founder selects the board they want in place, not the other way around. This idea that most dominant founders with Founder Syndrome purposely select submissive and maybe somewhat ignorant committee members is mostly true, proper board members would stop the issues in their tracks and the only reason Founder Syndrome majorly affects charities is that the founder themselves put the board they want in place, all of who will presume the founder is protecting the charity and not protecting their control of it. If this continues for extended periods of time then the issues will begin to raise their heads, when a founder has had control for too long, the symptoms are worse.

” There shouldn’t be a culture in a charity that allows founders to hide information, and the accounts reviewed by the trustees should really always pick this up”  – Benjamin James, McCarthy Denning

I have read that, ‘one or more of theses symptoms could actually be strengths’ this really grated against me as the writer clearly has not got to grasp of what founder’s syndrome actually is, in its basic terms, caused when beneficial personality traits of the founder are allowed to transform, the personality traits then focus around control, power, ego, and extend into paranoia – this may seem to be an exaggeration but if you’ve dealt with Founder’s Syndrome and not seen these aspects then you have caught it earlier, the situation we’re dealing with is 30 years in the creation!

Often founders become increasingly defensive of their actions and resent any interference while any offers of help or suggestions are taken as threats, while resorting to blaming others for any issues, and initiatives to change the board to create stronger governance are stymied at every turn as the party involved have their standing called into disrepute. Without swift changes the organisation will eventually collapse, either due to problems created by the founder or by the lack of succession planning and the demise of the founder themselves.

Founders are frequently driven from organisations by controversy, which attracts negative publicity. Founder’s Syndrome causes circumstances to build until the board, staff, volunteers and even public bodies or regulators have to step in. This is not positive for any party involved but is done out of necessity.

“ The sooner the board or the authorities recognise such a situation and remove the founder, or anyone else who is taking advantage of the organization, the better.” – Elizabeth Schmidt, Nonprofit Quarterly 2013

Why isn’t more being done to protect charities from Founder’s Syndrome?

There are several views on this subject, but in my view this is it is one of the key topics which destroys the Charity Industry itself, a quick review of the last few major charities going into administration or being part of some other major scandal and you’ll see that it’s usually down to Founder’s Syndrome, although sometimes it’s not the actual founder but the person who grew the organisation from the onset.

Some well published examples of Founder’s Syndrome taking down a charity, although these are major, national and international examples it’s difficult to find publicised versions of the issues in smaller charities as the Trustees rightly reduce the amount of publicity regarding the failures or have disappeared from existence;

  • BeatBullying, led by its founder Emma-Jane Cross
  • ShelterBox dismissed its founder, Tom Henderson
  • Guy Willoughby, the founder of the landmine clearance charity the Halo Trust
  • Colin Nesbitt released on police bail after staff at Yorkshire-based Little Heroes Cancer Trust
  • Somaly Mam, of the self-titled Somaly Mam Foundation – A key example of belief in their own lies and how disastrous stories are a major call to alms for their supporters, while the more shocking the story the less likely we are to question its honesty.
  • Camila Batmanghelidjh who ran the very recently deceased Kids Company.

Currently the pressure is on the industry regulator, in this case the Charity Commission. In the UK there are over 164,000 charities registered with the Commission, who has around 300 employees, dealing with around £64 billion in public funds. As many of the public bodies are they also are facing budget cuts which is affecting their effectiveness.

Through April 2012 to March 2013 there were 15 inquiries opened by the Charity Commission, while during April 2013 – March 2014 there were 64 charities were placed under inquiry, yet in the 6 months from April 2014 – September 2014 there were 68! This jump is due to a National Audit Office investigation which concluding the Charity Commission works reactively rather than proactively, nor did it provide sufficient risk assessment of individual charities. The report also confirmed the Charity Commission made little use of its statutory powers, was slow to act and didn’t use its full force in the most serious of cases. Again I can completely see this, during my experience the commission have taken the full 14 days, sometimes more, to respond to us. They’ve agreed with us of the severity of the issues we’re dealing with, but their advice is for us to make a solicitor act on our behalf, there are many reasons why this isn’t appropriate which had been described within our emails to them. Acting outside their remit on operational matters, yet ignoring the many severe issues we’d advised them of, at one point we received a written reply from them after sending copies of evidence via Dropbox links, we were not aware they couldn’t access Dropbox, but due to the amount of evidence we couldn’t attached to an email, we received a response 14 days later, advising us of the next steps but confirming they had not read anything we had provided to them. This is not only poor service but it’s also poor regulation, if anything in those documents had provided the evidence they needed to open a statutory inquiry they have ignored it.

In 2013-14 there were 78 issues from complaints against the Charity Commission which were escalated to stage two of those 53% were complaining about insufficient regulatory interventions. This strikes clear with myself as we have personally been struggling to have the charity commission see the depth of problems to which all are serious issues of control and management over a 30 year period. I must make clear only 18% of these complaints did the charity commission accept as faults on their behalf, but if 53% of complaints are about insufficient intervention then maybe that says there should be more available to charities to have a body come in and provide true regulation, as expectation is what is key here, people were asking for help and didn’t receive it.

Lord Hodgson of the Public Administration Committee said the Commission will “only take action on complaints if they amount to serious mismanagement or misconduct”, however from my experience, they have not stepped in but provided a reply to each of our emails giving a generic and in my opinion somewhat flippant response, it is not the commission staff who are facing the intimidation and turmoil and this is a key part that the commission’s doesn’t seem to take into consideration. There are board members and volunteers working hard to fight for a cause and are being stifled, bullied and pressured by a founder to agree with them and protect their interests. It is this which is what people need support fighting against, the majority of board members and volunteers are happy to do any additional work needed to get their charities working legally and protect it from further damage. It is the initial step in making the founder see the issues and remove the control from them.

Although the Charity Commission utilised their information gathering powers more than 3 times the amount in 2013-14 than they did in 2012-13 this still isn’t enough. If the commission had of stepped in with further information gathering powers as soon as complaints had been logged, they would be well aware ours was a case to open an inquiry into, while we would also be 16 months into having an effective, legally running charity doing the job it set out to do.

Law protecting charities from Founders Syndrome?

Let me make myself clear, I agree with most of the Charity Commissions stance and I certainly believe they are restricted by dated laws restricting what they can and can’t do, but this is where it falls short, their advice is provided in a very legal manner which doesn’t help small charities, while big charities can normally afford the legal costs for a professional to translate, its the small ones that are left high and dry while their regulator expects volunteers, staff and trustees to fight the founder with little support or law.

“ The world of executives is filled with founding chief executives whose domination, petulance, stubbornness, shortsightedness, and other flaws are routinely overlooked because, well, most of the time they’re right. That doesn’t make their exasperating style or puzzling choices defensible.” – Thomas A McLaughlin, Moving Beyond Founder’s Syndrome to Nonprofit Success

When a founder inflicted with the syndrome is faced with volunteers trying to protect the organisation the difficulties are emphasised, as there are NO volunteer protection laws. All employee regulations are only applicable to employees, so although most organisations will say they do not want bullying and biasing there is no model in law to prosecute should a founder go bullying volunteers and any other criminal charges are very difficult to prove without having many people witness and that is only going to cause the founder to publically flip the situation and tell people “they’re all against me” to which their prior publicity and fake authenticity of cause will sway, with ease, the public perception. This is a major flaw within law, people are volunteering their time and should, if anything, have more protection than employees who are receiving compensation for their time and work, this can also extensively clarify the position between volunteer and contractual employee which is somewhat grey.

My own situation is extensively worse as there are animals suffering, with which the RSPCA are unfortunately rather powerless, although they have been very supportive and confirmed issues date back long before my arrival in the charity, they confirm there were areas of the sanctuary which they didn’t even know existed, yet didn’t have right to enter. Some of the worst cases of animal cruelty have been done by animal charities and all due to Founder’s Syndrome, just some examples;

  • Emergency Animal Rescue Service (EARS), Yorkshire – closed 2014 after founder convicted of abuse and banned for 10 years from keeping dogs
  • Society for the Protection and Rehoming of Animals (SPRA) – Stuart Ford – convicted of animal cruelty
  • Sarah Mellanby, whos ‘sanctuary’ turned into hoarding then tried to dispute the RSPCA removing 62 ill cats – danjrose.uk/trouble-rspca-bbc-panorama-program/

As trustees we’re told governance is key, but this isn’t the core case with issues of founder’s syndrome, its the case of control which takes priority, without control the trustees cannot properly govern and this is why founder’s syndrome infected charities struggle. It’s difficult to ‘take’ a charity off a founder, but as we’ve discussed, it’s not owned by them so there should be no emotional attachment to that reason. It’s providing confidence and reassurance to the submissive board that’s been selected by the founder or giving them options for support, which can only come through law or its regulator.

The draft protection of charities bill (which is under review) proposes to give the commission additional statutory powers. Although I believe this law could have gone further it is a move in the right direction, the law suggests powers of suspension of trustees and the power to appoint interim managers during investigations. The main benefit to the new law is 3.3(b);

“ any other conduct of that person that appears to the Commission to be damaging or likely to be damaging to public trust and confidence in charities generally or particular charities or classes of charity.”  Draft Protection of Charities Bill

This bill would enable the Commission to stop founders who are seen to be destroying public confidence in charities themselves, I can confirm since this debacle has started and I’ve seen just how deep the problems of a charity can extend, one which I though was amazing before starting to volunteer there, these issues have very disastrously affected my views on charities as a whole and I’m now a cynic of the industry and my support of several smaller local charities has been called into question, until I can confirm the issues are not the same. I’ve no doubt at all that many of the volunteers, staff, ex-trustees and other affiliated parties feel the same.

Another section of the law which would benefit ourselves is section 8 the addition of the power of automatic disqualification from being a trustee: Section 4 Case H which involves making a false statement or causing one to be made. We have clear evidence of this as I have personally been interviewed by the police after false allegations were made by our founder to intimidate me from continuing to want the charity to run legally and protect the animals within its care.

I think one thing which should be extended by the law is the commission’s power to delegate. I cannot thank or promote the hands-on advice and support provided from our Local Voluntary Council, several members of the team have been so helpful and gone beyond their roles to support us. They have seen the stress, worry and pain we have suffered through bullying and seeing our animals die without any ability to help. I think what should be entered in law is the ability for select public bodies 0r charities, for example; the RSPCA, County Councils or the Police to escalate matters with the commission and for them to be able to formally nominate issues which need an inquiry. Those requests should be automatically filtered to the nearest Voluntary Council for further investigation before using regulatory finances, after all they know what they’re doing and provide advice and support to most charities, dare I say it, more than the Charity Commission themselves. They will then be able to step in earlier than the Charity Commission could, provide correct advice on how to proceed for the charity itself and know when to escalate the matter to the Commission which should automatically open an inquiry.

An acute case of Founder’s Syndrome

Over the past months we’ve dealt with no less than 5 public bodies asking for help, ex-trustees and committee members have all confirmed the issues existed even when they were on the books, and we have evidence that this was even the case in 2003! We have copies of complaints sent to the charity commission over the years (no doubt there are many more) and have confirmation from 5 other charities that they are aware of the issues and support immediate change. There are over 60 people, who are the core volunteers or ex-volunteers who have been bullied out of the rescue all supporting changes, but they’re terrified of our founder finding out, as they will be intimidated, bullied and removed by the founder, banning them from looking after the animals that we all see suffering at the hands of the founder. We’ve sent many formal emails to the commission with little resolution and advice we had already read ourselves. I can’t mask my disappointment in the Charity Commission, who not only have failed to support us and regulate the disastrous effects seen within our charity, but they have failed to help us protect the vulnerable animals that have supposed to be cared for with the public funds.

The commission has a specific statutory function to identify and investigate apparent misconduct or mismanagement in the administration of charities. It aims to assure the public that money intended for charitable purposes is used by charities in accordance with charity law.

We’re still working around the clock to make matter right, and we won’t stop. No matter what decision is made there is only one outcome that will protect the charity and its wards, in our case, that is for the founder to be removed from power with instant effect.

I would love to hear your experiences and add it to my research – Have you dealt with founder syndrome? Do you think you have it? At what stage did you catch it? What were the cost to the charity

Daniel Rose 0 Comments