Reform or Die: Charities Must Embrace Transparency and Democracy to Survive

The Times report that Oxfam aid workers in Haiti had used their positions to pay for sex from locals has stunned and appalled in equal measures. What has been more distressing has been the allegation of a cover up.

There will always be rotten apples in any organisation. That is, sadly, not surprising. Is it surprising that senior executives of a major international charity saw fit to pretend, effectively, that none of this happened? Some would say yes. I am not so sure.

The latest revelations follow the collapse of Kids Company a few years back after years of mismanagement that trustees did not spot. It also follows recurring stories of impropriety in the charity fundraising world where outsourcing to private companies put charities beyond the Charities Commission.

Charities have never been more important. Both domestically and internationally, they are receivers of large public grants. When Carillion collapsed, alongside the anger, was some thoughtful searching about the role the private sector plays in government projects.

The Oxfam scandal has not lead to a similar debate about how charities operate, what work they do and how charities must adapt to their new roles. In 2017, only 39% of people saw the country’s charities as highly trustworthy. That follows an all time low in 2016. It might be that confidence is returning. But this is a mere whisper of a glimmer.

In an age of cynicism, charities might be making a fundamental mistake if they think that are immune to public wrath.  They are, after all, perhaps more reliant on public confidence than other organisations. Yet when was the last time any of you heard a charity speak about reforming to earn our trust?

It is not as if there is a lack of an agenda.

In a digital age charities can democratise easily

Charities are huge recipients of government grants. Oxfam itself received £37.1m from the government and £139m from other public authorities, nearly half its £407m spending. The Centre for Policy Studies has estimated that the sector receives between £3.4bn - £6.5bn per year.

People can debate the rights and wrongs of the sector receiving taxpayers' munificence. Surely what is not open for debate that this should be done so transparently. Where a charity gets its funding from is as important as how it spends it. And surely it is time that the public has the same rights to look at the third sector when it acts as an arm of government as it currently does government itself under the Freedom of Information. (And the same goes, actually, for private companies.)

But embracing a radical agenda of transparency is not enough.

Anyone who saw Alan Yentob at the Public Administration Committe, following the collapse of Kids Company was not watching a trustee who had been fulfilling his fiduciary duty. Whereas the sign of a good trustee is his or her distance from management, Yentob put on a display of chumocracy in action. He was unaware of the problems within Kids Company because he was part of the problem. Yet his role was an essential one in any charity.

More active, empowered trustees would ensure better governance. Yet at present they are appointed by the people they are supposed to monitor. They are also not accountable to anyone. Quis custodiet ipsos custodes? As Juvenal asked. At the moment nobody.

Were charities to embrace their supporters rather than see them as mere cashcows, they could use their enthusiasm to their advantage. In a digital age charities can democratise easily.

Why not allow allow supporters to elect trustees? Someone who had given a direct debit, volunteered or even arranged a coffee morning could be eligible to vote. Trustees could shows supporters their credential, rather being appointed because of who they know.

Charities also need to create forums so that supporters can understand their work better and question how money is spent in their name. Private companies are often accountable to their shareholders. Annual General Meetings, in theory, allow shareholders to probe those who control a company. Who are charities accountable to? The Charity Commission - a quango.

The world has changed but charities have not noticed

The stifling insiderism goes against the grain of what should be social movements to bring about change, whether it be on cancer research or homelessness. Too often charities speak with the voice of the bien pensant. Charities could decide on how best to involve supporters and become more accountable. Charities come in different sizes. One size would not fit all. Some might want to be more accountable to their service users. Others just to volunteers and financial supporters. It could become the Charity Commission's role to give rating to charities based on transparency, accountability and democracy. 

The point is, bosses do not own charities. Top-down, command organisations are on their way out.

A charity that was responsive to its supporters, that subjected its governance to scrutiny in public rather than in a report filed to a quango, would have moral authority. Where is that authority now when we need it?

Because here is the problem. The world has changed but charities have not noticed. In ignoring public anger on issues such as executive pay, they are an equivalent to MPs who used public money to clean their moats.

There is a long way to go before we understand how what was allowed to happen at Oxfam. It would be a tragedy were Oxfam’s great work be sullied by a minority of wrong-doers and institutional failure.  

Charities should look at the response to Oxfam’s fall and note the glee with which many have met it. They should note that there are too many voices now calling for Oxfam to lose its public funds - a disgrace that would fail some of the world’s worst off. They should note the vultures circling the wounded beast, and remember that they too are mortal.  

It is pretty high stakes. So reform, or die.

More about the author

About the author

Educated at Durham University and UCL, Graham is Disclaimer's editor and a regular contributor. He has written for numerous publications including Tribune, Out Magazine and Vice. He has also contributed to two books of political counterfactuals for Biteback Media, Prime Minister Boris (2011) and Prime Minister Corbyn (2016).

A democratic republican lefty, he struggles daily with the conflict between his ingrained senses of idealism and pragmatism.

Follow Graham on Twitter.

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