What price payment of charity trustees?

What price payment of charity trustees?

Much has been said so far about the recommendations contained in the report of Lord Hodgson into the Charities Act 2006 published on 16 July 2012. Views have been expressed about the potential impact of the recommendations for charities generally, and for small charities in particular.

One recommendation has attracted lots of attention so far and has been criticised as potentially damaging to all and small charities. That is, the proposal that charities with an annual income in excess of £1 million be allowed to pay trustees without the need for Charity Commission consent. Many commentators have suggested that this proposal is misplaced risking undermining the ‘voluntary’ ethos nature of trusteeship and public trust and confidence in the sector.   

I share those misgivings.  In particular, my questions are:    

• ·       Will those proposals be bound to improve good governance amongst charities?   

• ·       Why make income level the trigger? 

• ·         And what of the impact on public trust and confidence in charities?

I wonder about what evidence there is to show that paying an individual to be a trustee actually makes them a better trustee: whether that translates into improved or more effective governance for charities?

Perhaps there is anecdotal evidence to draw upon? Having worked with charities over many years and seeing governance both good and bad, I have yet to be convinced that any benefits gained from payment of trustees (on a case by case basis) justifies ousting ‘voluntary’ trusteeship as the norm.

The proposals also beg the question – why confine this option only to charities based on a £1 million annual income level? Whilst income might be an indicator of the ability of a charity to make a payment to trustee, in my experience, income in itself does not point to the need to do so. Income levels are not bound to equate with the complexity or challenges facing trustees. Other factors such as the structure of the charity, the context in which it operates, or how it operates all impact upon the demands placed on trustees  and the ability of a charity to recruit trustees. Those sorts of factors are not income dependent. Compare, for instance, the demands placed upon trustees of a grant making trust with annual income in excess of £1 million with those facing trustees of an unincorporated association providing a community facility whilst hard pressed for funds.

Only this month, the Ipsos MORI survey reported ongoing positive levels of public trust and confidence in the charitable sector. That same report made clear however that that trust continues to revolve around use of funds. And that there are levels of concern amongst the public (well founded or otherwise) around the amounts charities spend on salaries. Calls for greater transparency about the application of funds reflects the public appetite to know. But knowing more about salary spend could cut both ways for charities – will the figures be more or less than the public expects?    In that context, justifying payment to trustees will likely present its own challenges. If the proposals do become law, time will tell whether this particular application of funds brings its own cost to charities, whether individually or as a sector.