Tuesday, 28 July 2009

Something must be done - do charities have a collective responsibility for under-performing charities?

This article first appeared in New Philanthropy Capital’s Giving Insights newsletter, summer 2009


Chief executives from the charity sector are gathering for the spring conference. They discuss their varying responses to the recession, possibilities of new business, recent pronouncements from key government Ministers - and the abject performance of organisation X. When will it end, they sigh? Surely they can’t go on providing such abysmally poor services and get away with it? The majority view is that it reflects badly on all charities; something must be done.

But this is the same conversation that took place at the spring conference the year before. Nothing has been done about organisation X and there are plenty of entirely plausible reasons why the Chief Executives should leave the elephant in the room well alone.

After all, surely charities cannot be expected to regulate each other – isn’t that the job of official regulators such as the Charity Commission? Or what about the commissioners and funders that must surely be monitoring the work of organisation X? Besides, every organisation has services that under-perform for periods of time; we should be caution about being too critical about organisation X.

But in our heart if hearts, we know that organisation X has been under-performing for years. Every time the other charities advertise a job, applications from staff at organisation X are plentiful as good people seek to flee the dysfunctional vessel. Stories emerge with depressing regularity of endless, consistently mishandled re-structuring exercises and dubious staff management practices leading to frequent employment tribunals. Governance at organisation X is famously weak with the over-bearing executive in full control. He is the puppeteer pulling the strings and the cowed trustees dance to the tune laid down for them.

In truth, perhaps regulators and funders should be expected to investigate more, to ask harder questions and to dig beneath the information provided through monitoring reports and returns. But it must also be recognised that, even for the most diligent regulator or funder, there is inevitably territory where they don’t know what they don’t know.

There may be another more visceral, sub-conscious and dishonourable reason for a Chief Executive to avoid raising concerns about organisation X. Leading a charity brings with it many vicissitudes. There are days, months, years when the sun shines but also periods of abject bleakness when projects go wrong, trustee boards play up, funding is lost, mistakes are made and reputations are on the line. How comforting it can be for a chief executive to look across at organisation X and think that, despite everything, it could be worse. Doesn’t the group always need a failing member to provide the sustenance of schadenfreude?

This, of course, is just not good enough. It would be intolerable for charity sector chief executives to set themselves up, either formally or informally, as an inquisitorial Star Chamber to pass judgement on their peers. Such an approach would be objectionable, unworkable and thankfully unnecessary. This is a sector which is well regulated and, in comparison with other areas of public life, refreshingly scandal-free. But either individually or collectively chief executives surely have a duty to have a quiet word to those who need to know – principally the regulator, when evidence emerges, building up sediment upon sediment, that suggests an organisation is behaving in a way that is damaging the reputation of the voluntary and community sector.

When an organisation is dysfunctional to this extent, the beneficiaries of the charity will invariably be receiving a service that is at best shoddy and at worst putting them at serious risk. This is the strongest incentive for taking such a step.

Instead what tends to happen is that, eventually, an internal whistle-blower takes the huge risk of contacting the regulator or a funder, an investigation duly follows and malpractice is exposed. At the next spring conference the chief executives gather. With a collective rolling of the eyes, they gravely discuss the deplorable situation that was allowed to persist for far too long at organisation X. We all knew something wasn’t right they say. Someone should have intervened earlier.

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