Speech: Charity Commission: Annual Public Meeting opening notes

Good afternoon everyone and welcome –

This event is an opportunity for you to hear from the Commission and to question us on how we are doing. May I thank the many of you who have come here today. I understand some have come from Scotland, Wales and Northern Ireland. We appreciate the effort you have made to be with us and I thank you.

Later you will hear from the executive team about some of the detail of our work. Importantly, they will also indicate where we will be going in the year ahead. After some questions we are lucky to have the excellent and thoughtful Frank Field, MP for Birkenhead. He will be sharing his thoughts on ‘A Giving Society?’.

To start with, however, I would like to take this opportunity to reflect on what has been a difficult summer. Difficult both for the charity sector but, most importantly, difficult for those beneficiaries whom it seeks to serve. Confidence has been shaken; its restoration is our priority.

Charities have a long and distinguished role in this country. From caring for the sick and providing education, they have grown to include scientific research and the provision of relief to those struck by disaster across the globe. Alongside this are the thousands of what I call ‘kitchen-table charities’ – small groups of citizens who give up their time to improve their communities.

This important role has been recognised throughout history and across the political spectrum. From Edmund Burke’s ‘little platoons’ to Sir William Beveridge, author of the modern-welfare state, who said ‘The making of a good society depends not on the State but on the citizens, acting individually or in free association with one another’. For me, charities are a vital, civilising aspect of our country and I want to reaffirm my admiration for them here today.

The fear of many is that from this strength of tradition and position of trust, the sector has recently fallen. Its special place in the nation’s heart helps to explain the level of outrage at the sharp practice of a few, revealed this summer. It fell to another estate – the press – to expose the shocking fundraising practices employed by some of our best known charities. Furthermore, the sudden collapse of Kids Company and the British Association for Adoption and Fostering has thrown into relief concerns over finance and governance.

This has occurred in an already challenging context. It has come at a time of growing calls on us all, including charities, to do our bit in countering extremism, most recently and clearly expressed by the Prime Minister in his Birmingham speech this summer. Financially too, austerity continues to test us. Charities have felt this and so too has the Commission – our annual budget having been reduced from £40 million to £21 million.

Yet the pressures on the Commission to build confidence in charities, together with the pressure upon trustees to run their organisations properly, are only increasing. One estimate says that a third of charity funding comes from public service contracts.

This vote of confidence in the innovation and personal touch of charities is being matched by increased scrutiny. It must also be matched by a robust approach by trustees to ensure their organisations are properly managed. Trustees are under legal duties to ensure their charities’ finances, reputation and property are well conducted. The events of the summer serve to underscore the importance of trustees’ role. We have seen the outcome in the private sector when non-executive directors do not fulfil their responsibilities. Trustees of charities should take note of the events this summer and reflect on whether they are fulfilling their duties.

We at the Commission are here to support where possible and I would point everyone to our invaluable publication – The Essential Trustee, which we are working to ensure the greatest possible distribution. Ultimately, however, it is incumbent upon trustees to make themselves aware before taking on responsibility. Trustees carry full legal responsibility for their charity – no matter its size, no matter how many executives it employs. The buck stops with them.

We will to continue to do our bit, by continuing to update guidance, by expanding the reach of our communications and by meeting and engaging with charities to talk about trustees’ duties and compliance; last year we held or attended over 50 outreach events.

To ensure we can fulfil our regulatory role in maintaining public confidence in charities, we are reforming the way we work. Last year, we opened over 100 investigations, many more than compared to when I came to Commission three years ago. We also used our regulatory powers over one thousand times, compared to fewer than 200 five years ago. Further detail of which you will hear later.

We are rising to the challenge of austerity but there is more to do. Our Strategic Plan sets out how we will become still more effective regulator and we welcome the Protection of Charities Bill currently before Parliament. The powers contained within the Bill will allow us to protect charities by preventing problems before they arise. It will also close some loopholes which are currently open to abuse. I have been particularly gratified by the cross-party support that the Bill has received.

As for the issue of fundraising, we are ready to play our part. Our guidance will clearly set out what charities and trustees need to consider when raising money from the public. For too long, too many trustees have failed to meet their responsibilities over fundraising and I know the Sector is taking steps to address this.

In this period of change, I look forward to a continuing, strong relationship with charities. At its best, the sector it embodies the values of public duty and service to others – values I have long admired. The spirit of voluntarism marks so many of the trustees in this country. It is this ethos which is now renewing that special bond between the nation and its charities.

You will be hearing from me a bit later to introduce our guest speaker. But before I handover to our Chief Executive, I want to take a minute to praise the work of the staff of the Charity Commission. As I have said, this summer has been difficult for many, primarily those beneficiaries dependent on certain charities. However I would like to mention my team. They work day in, day out with charities and it is only natural that our hearts have gone out to many of those affected in these difficult times. The dedication and resilience demonstrated by the team has been remarkable, even to a seasoned veteran like me, and I would like to take this opportunity to extend my thanks.

I will now hand you over to Paula Sussex – our excellent CEO – who will take you through some of the detail of what we have been up to and where we are going. Paula…

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