Thursday, March 22, 2012

Charities Act 2011

The Charities Act 2011 has now been enacted.  It doesn't change anything - it 

'...repeals and replaces the Recreational Charities Act 1958, the Charities Act 1993 and many of the provisions of the Charities Act 2006.' 

There is no change in how charities will be governed and managed but all references to charity law should now be to this act. The Charity Commission says this

'It simply consolidates existing legislation and so does not affect the legal basis of the Commission's guidance in any way.

This move will certainly make it a bit easier to understand charity law. 

Tuesday, March 13, 2012

Collective responsibility

I was a social worker, social care manager and social care planner for some 13 years and then worked for a district council. I did a lot of partnership working and was used to people having a go at me because of some decision or other. I understood the frustration that many people felt when they thought that they should have got more.  I also understood how social services workers and managers had to make choices about the use of resources. With the best will in the world we could not provide everything that everyone wanted. Most times it was not my decision but whatever I thought I felt the need to represent the department. 

This was not about giving the party line but about discussing with people the difficult decisions that social services faced every day. I saw a marked change in my time at all levels from local to national working, where the honesty of debate enhanced working relationships between all sectors. It will never be perfect but it is so much better than regarding each other with suspicion and distrust. There is then the step further after discussion which is seeing if things can indeed be improved.  Where I saw that there was a real problem which could be solved I would take that back to the department to see if anything could be changed.

As trustees of charities we represent our organisations to the outside world. We have a greater responsibility than an individual worker or manager for the workings of the organisation because we are the ones who set the framework for what is done. We are the leaders not the followers. If we are unhappy with the organisation then we have to work with fellow trustees (and staff if there are any) to change the organisation. Difficulties arise when we wear several hats - in Unitarian circles we may be a trustee of a local congregation, a district, a society and/or the (national) General Assembly - and sometimes we want to make comments just as  us as individuals without having to think about wearing any other kind of hat.

This blog represents what I think, it does not represent what my local community thinks. But how can we be sure that people understand which hat (or none) we are wearing? To some extent it has to be the context and to some extent it has to be explicit. The difficulties arise when we are being contentious and/or when we are criticising organisations of which we are trustees. In the former instance we need to ensure that we do not cast a bad light upon any organisation we are a trustee of by being publicly contentious. We need to be sure that we make it clear who we are speaking on behalf of, usually ourselves. In some circumstances it would do well to pass any public statements we are going to make to fellow trustees for information and comment even if we ourselves are clear that we are speaking personally.

If we are going to be overtly critical of organisations of which we are trustees then we need to take extreme care. First we are criticising ourselves - as trustees we take collective responsibility for the whole organisation. Second we may be setting ourselves apart from the organisation - saying that someone else is in control. Third we may be making public those things which are not in the public domain. And fourth if we are not criticising ourselves then it is likely that we are criticising others - people we have to work with, people we are leading and people who we have a role to protect. It is one thing to address organisational difficulties internally and quite another to do it publicly.

There are of course situations when there has been a significant debate and we do not agree with the majority decision - in this instance we may write a minority report or be clear with our fellow trustees that we cannot keep quiet. Perhaps there will be a discussion with other trustees about how this will be handled. At the end of the day all trustees must be focused on what is best for the organisation and outright war usually isn't the best approach.

It can be very easy to think that we are wearing a different hat or just discussing issues from a personal point of view but ... and this is an important but ... we must be considered in what we say, supportive of our colleagues and if we think there is an issue then raise it internally first, not to the world at large. As a trustee our collective responsibility is always there, we cannot switch it on and off. And then we must ask how we may solve any problems. If we are focused on the best interests of our organisation then we must take steps to address those problems with our fellow trustees and staff.

Being part of any organisation, in whatever role, can and does limit our freedom to say what we think. However it does this for the greater good - for the health of the organisation - to ensure that everyone else in the organisation can trust us and we can trust everyone else in the organisation - to enable the organisation to speak with one voice. In our relatively small Unitarian community we need to be mindful that we make it  clear in what capacity we are speaking.

Monday, March 5, 2012

Effective Governance

It is sometimes difficult to understand how we are supposed to relate to our Executive Committee (EC) (of the General Assembly of Unitarian and Free Christian Churches ) (GA). 

I have been involved in a commission, panels, have voluntarily co-produced both the Associate Members newsletter and the Annual Report Summary. I have been involved in planning the Annual Meetings and I have led sessions at the annual Meetings. I did give a significant amount each month until I realised that the EC was not supportive of my work on the Funding Development Panel so took my financial support elsewhere. I have also stood for election to the EC and was unsuccessful. To my mind I have shown my commitment.

But when I dare to criticise I get one of two responses either silence or a comment that I am being negative.  At no point have I ever had a rational debate with any member of the EC about my concerns. It's a rum do when our freedom, reason and tolerance are not enshrined in the EC's commitment to rational debate over real concerns.

The Charity Commission identifies six key principles for good governance. The last of these is being open and accountable. It says this

An effective board will provide good governance and leadership by being open and accountable.  The Board will lead the organisation in being open and accountable, both internally and externally. This will include:

  • open communications, informing people about the organisation and its work;
  • appropriate consultation on significant changes to the organisation’s services or policies
  • listening and responding to the views of supporters, funders, beneficiaries, service users and others with an interest in the organisation’s work;
  • handling complaints constructively and effectively; and
  • considering the organisation’s responsibilities to the wider community, for example its environmental impact.
If you don't know how to relate to an organisation, a group of people or an individuial it is even more difficult to understand how their behaviour might be changed.

Measuring results

If you go out to dinner - how do you assess how good your experience is? The quality of the food, the service, the comfort of the surroundings, the noise level ... do you ask how many hours the cook has spent cooking?  How much the basic ingredients cost?  How long they take to do their VAT return? How long people have trained for their jobs? You might ask out of interest but the answers probably wouldn't affect your rating of your dining experience.

Within the charity world we have come a long way in measuring outcomes - in non-jargon - we measure what has changed.  We used to measure outputs - that is what was produced - in the dining analogy this would be the food, the length of time to order, the cost, the space between tables .... anything about the experience that could be measured in terms of the end result but not the impact on the diner.

In Unitarian circles we struggle with any kind of measurement, we are a bit unsure how this fits with our ethos.  However what we often get told is the inputs.  It cost this much, these many people were involved, they gave up this much time and they travelled these many miles. I am not sure what we are meant to make of this. At best people tell us that they are committed to the task but in some instances one is left wondering, 'How did it take so long?' At best it is open governance and at worst it is raising the flag of the martyr - look at what I have sacrificed for you.

Another response that I have heard a couple of times is, 'We're doing our best'. This is the most scary because if people are doing their best there is only one way to go and that's down.  I would much rather people spent less time being more efficient.  I would also much rather hear what has changed.

In psychological terms we need to move our discussion of achievements into the adult sphere, leave the emotional baggage behind and deal with the business. This is what has changed because of what we have done.  Hurrah! we would all say.

Membership Charities

The General Assembly of Unitarian and Free Christian Churches is a membership charity - as I wrote in my previous post this is much like a commercial company which has directors (trustees) and shareholders (members). We are not alone in being a membership charity which does not detail the rights and responsibilities of its members. It is unfortunate that a group reporting to the Executive Committee late last year recommended that the GA's governing document (constitution) did not need amending. Not only is the object confusing but also, whilst it says how members come into being, it does not say what they can and cannot do. 

The Charity Commission wrote about Membership Charities back in 2004 and a summary of the report can be found here.  The recommendations for trustees of charities and for members are below

Recommendations for charity trustees

Trustees should:
  • Pay careful attention to the governance arrangements that relate to the charity’s members, in particular:
  • That the rights of each different type of member and their role within the charity are clearly set out;
  • That the role of corporate members is fully understood;
  • That effective means of communication with all members are in place;
  • That the membership list is kept up-to-date;
  • That the governance arrangements are regularly reviewed, including the number of members they have and the level at which a quorum is set;
  • Consider whether it is appropriate to include a clause in their governing document setting out the respective roles and responsibilities of members and consider whether any additional procedural documents would be beneficial;
  • Consider whether their membership is truly representative of the group it is designed to serve and, if not, consider ways of reaching those that are excluded;
  • Be aware of the potential benefits of mediation and, where appropriate, consider whether it might be a useful tool for resolving a disagreement within the charity.

Recommendations for charity members

Charity members should: 

  • Ensure that the charity clearly explains what the membership role entails, including the rights and responsibilities which accompany the role;
  • Exercise their right to vote in the interests of the charity for which they are a member;
  • Abide by decisions that are taken fairly and within the rules of the charity.

At the current moment we seem to have a mismatch of expectations about the roles and responsibilities of members and trustees alike: this needs sorting out .

Money and members

The proposed 2020 Programme raises a number of issues about governance, perhaps one of the most important is about who has control over the General Assembly (GA)'s money.

Trustees of a charity have a duty to apply the charity's income to the achievement of its objects unless it has a specific policy with regard to (a) its reserves; (b) a large project which it is saving money for; or (c) there is planned expenditure in the following financial year. If these do not exist the Charity Commission expects a charity to spend all its unrestricted funding every year. 

It is for a charity to determine how it plans to spend its income and how it intends to raise income and/or reduce expenditure. So what do we mean by 'a charity'?  In terms of who is entitled to make decisions without these being delegated then we have the board of trustees and the charity's members. This model of governance is similar to commercial companies where there are directors (trustees) and share-holders (members). The governing document should clearly describe the rights and responsibilities of each group. The GA constitution does not ... more for a later post.

It is for trustees and members to determine what the decision making process for spending money is.  If this does not exist then the trustees need to produce a decision-making policy and procedure. Trustees cannot complain that this does not exist - it's their job to produce it and then to adhere to it.  Without such policies it has to be a matter of custom and practice. How in the past have we as a body decided on our budgeting? In the past this has been done through a series of processes including the following people/groups - the Executive Committee, Commissions and Panels, the Chief Officer and staff, and ultimately the membership usually via the Annual Meetings.

So what spending should members of a membership charity have influence over? All of it! As an analogy, any member of the British public can express concern about what the Government is spending - it would be a little odd if someone in the government then said but you only have say over what you paid in taxes. Similarly with charities, trustees are working for all their members and it is usual for all members to be able to vote on the future budget and spend of that charity not just on the money that they helped to raise.

So what guides a charity on how to spend its money? Essentially three things

  1. Their object; combined with either
  2. Their business plan; and/or
  3. Emergencies.
If new money is raised then it should be spent on these three items above.  

We cannot have a board of trustees working outside of their own framework of governance and raising money which they say the membership has no influence in spending. If the trustees think that they can do this, and then do do this, then they should not be surprised or upset if the GA's membership is less than grateful.