Don’t let charity failures deter innovation and risk taking

…. and a critical report from the National Audit Office on Broken Rainbow, the domestic violence charity, we need to remember that the majority of larger charities are well governed.

Our research shows that half of the top 500 charities have 15 of the top 20 drivers of effective governance in place (Delivering Effective Governance). These drivers include working well as a team, ensuring meetings deliver excellent governance and that the board has the required skills and experience.

The failure of these charities suggests:

That they did not have trustees with the required skills and experience in charity governance. Kids Company was an example of a charity that had successfully identified a huge gap in social provision and was driven by a charismatic founder who championed the cause of people whose pressing needs were not being met by other agencies. Broken Rainbow was doing important work with the LGBT community.

The energy and dedication of founders and their trustees is essential to get new organisations going.

Scope, Mencap, Oxfam and Sense, to name a few, were all started by individuals who were passionate about their cause. Today they are today shining examples of the massive difference these dedicated people made to society.

Like the Kids Company and Broken Rainbow trustees, these people had to take risks, but they balanced to desire to champion their cause with the need to build organisations with the robust governance and management required to ensure long term success.

The sadness of both cases is that the right judgements were not made and their demise has led to the needs of thier beneficiaries not being met and significant reputational damage to the whole of the charity sector.

But trustees shouldn’t become risk averse.

We know in great detail what good governance looks like and how to ensure it happens. We just need to make sure that even more trustees understand what is required, particularly those who take responsibility for innovative and risk taking charities.

About Mike Hudson

Mike is Director of Compass Partnership and has been working with Chairs, Chief Executives and leadership teams of civil society organisations and their funders for over 30 years. He has also worked for many government departments, helping to shape policy and funding programmes for the voluntary sector.

Mike has been a Visiting Fellow at the London School of Economics and he is currently a Visiting Fellow at the Cass Business School at City University. He is a member of the Editorial Board of Governance magazine.

His book Managing Without Profit (Third Edition) has sold well over 23,000 copies, been translated into three languages and published in an Australian edition. His other titles include: Managing at the Leading Edge, Delivering Effective Governance, Building Outstanding Leadership Teams and One Minute Governance Tips from his Checklist column of Third Sector Magazine.