The Charity Commission is losing the 'trust and confidence' of charities

Since Baroness Stowell took over as Chair of the Charity Commission in early 2018, the public messaging from the regulator has become increasingly unmoored from its various statutory duties and everyday administrative procedures.

Speeches, interviews, press releases and blogs from senior officials seem to reflect her personal opinion about ‘charity’ and what’s wrong with it and her interpretation of ‘what the public expect’, rather than an impartial or objective view based in a deep understanding of charity law and the regulatory framework.

Public trust and confidence – the lens through which all else is now viewed

It is true that the Charities Act 2011 (which consolidated previous Acts) gives wide leeway in how the Commission interprets and implements its objectives of public confidence, public benefit, compliance, resources and accountability. But this is also subject to principles of good regulatory practice such as proportionality, accountability, consistency, transparency and being appropriately targeted. Further, the Commission’s decisions are challengeable in the courts and subject to adjudication by the Charity Tribunal.

However, in recent years the public confidence objective seems to have become dominant over the other four. Building on her predecessor William Shawcross, Stowell has ramped up the importance of this objective to become the first amongst equals; the lens through which the other objectives and activities are viewed. Further, the Commission’s current interpretation of what ‘public confidence in charity’ means is much closer to an interpretation of ‘public opinion about charity’ than it has been in the past.

Hence, accountability is interpreted as ‘information the public expects’ (read: amount spent on ‘the cause’, or CEO salaries, or fundraising costs) rather than information that would increase public understanding (the difference a charity makes). Public benefit is about ‘delivering maximum benefit in a way that is compatible with what charity means’ (read: not to be controversial, overly commercial, or ‘political’) rather than trustees demonstrating that the charity’s activity is charitable and that their decisions are in line with the charity’s objects. Compliance includes being seen to bend with the prevailing wind when scandals erupt (read: not defending the charity’s reputation or rebutting flawed accusations), rather than judicious enforcement of legitimate regulatory procedures and processes.

An extraordinary power grab

This mission drift has perhaps been most confused around public benefit, an historically contested (and confusing) but real concept in charity law. The Commission’s leadership now seems to be conflating it in practice with ‘public opinion’ and ‘public expectations’, neither of which have any legal basis at all as far as I can tell. The supremacy of these terms in the current narrative signals an extraordinary power grab over the rights and autonomy of people who set up, support and govern charities, by a regulator that is basically making up new rules as it goes along.

Generalising about hundreds of thousands of charities is problematic at best, but an important principle which the regulator now routinely glosses over in the Stowell era is that ‘charities’ don’t necessarily exist to be popular or to embody the will of the public writ large.

In fact the very existence of certain charities, their beneficiaries, their views and work may well be in conflict with public opinion – and that’s ok! Charities are an instrument to yield public benefit, which may be unpopular but still charitable. This is completely right and legitimate. The law says what is charitable and what isn’t, and the Commission has to make the call when it’s unclear or on the margins. That’s not the same as the Commission getting to interpret ‘what charity means’, based on its own reading of public opinion, and then enforcing standards of behaviour or expectations accordingly.

Research is the prop for flawed policy, wrapped in a patronising tone

Stowell’s approach has been to use research the regulator has commissioned about public trust and confidence to buttress her arguments via the Commission’s communications, but the distance between the actual findings of that research and the policy talking points articulated in the press and elsewhere widens every day, to say nothing of the limitations of the research in the first place. Even specific regulatory actions now are framed by and for the headlines, with the Commission acting as a kind of self-appointed crusader for ‘what the public wants’, rather than an objective assessor of the facts, context, data and evidence.

Then there’s the insufferably patronising, moralising, hectoring, lecturing tone of it all. As if hundreds of thousands of experienced and committed trustees, volunteers and staff are naughty children who need to be taught the error of their ways. As though they were apart from, rather than an integral (and civic-minded) part of, the ‘public’, and in need of stern education about ‘what the public thinks’. It’s another invocation of the rampant and frankly destructive populism seen elsewhere in society right now.

In this narrative, the law is some kind of throwaway ‘minimum expectation’ rather than what it actually is, a social contract between free people and their state about how their own, mostly voluntary, activities and behaviours should be legitimately regulated.

The road to hell is paved with good intentions

This is a road to hell. Not just for charities, but the regulator too – and ultimately society.

In my conversations with many people in the sector who pay attention to the Charity Commission and deeply care about what it does (yes, we do exist), minds are already made up. Under Stowell’s leadership, the regulator is rapidly losing the trust and confidence of the sector it regulates. People are tuning out; waiting for the leadership to change; no longer engaging; some are even starting to push back and make plans to resist. They’re sick to the back teeth of being patronised. In my experience, this is true for folks from large and small charities, funders and service delivery charities, trustees and CEOs, charity lawyers and charity workers alike.

Why? Because it’s not fair to judge trustees according to vague, subjective, and shifting standards of ‘behaviour’ or ‘public expectations’. It’s not fair to make sweeping claims and conclusions that ‘charities need to do x, charities are collectively responsible for y’ when the issue has nothing to do with 99% of them. It’s not fair to make unsubstantiated or poorly evidenced accusations in the press that perversely damage public trust and confidence in charities.

The Commission is losing the confidence and respect of those it regulates

The truth the current leadership seems unable or unwilling to grasp is that the Charity Commission needs the respect of those it regulates – but this is ebbing away. The Commission is under-resourced but also vastly outnumbered by the number of charities, and relies upon the goodwill of hundreds of thousands of volunteer trustees who try to do their best. If it throws that goodwill away in favour of the bully pulpit and trial by media, then trusteeship – the lifeblood of the sector – may become a burden too big to bear for many. That would be a situation which our regulator, our sector, and our society simply can’t afford.