As discussed in Chapter 3 the changing policy environment - including the increasing trend for voluntary sector public service delivery via contracting - has raised a number of concerns about threats to charity independence (Smerdon, 2009; Shaw and Allen, 2009). The Charity Commission (2007a: 20) has emphasized the need for trustees to be sufficiently involved in decision-making, to be free to act in the best interests of the charity and to avoid undertaking activities outside the charity’s objects and powers in order to gain funding. It has expressed concern over its own research findings that indicated that only 26% of charities surveyed who were delivering public services agreed they were free to take decisions without pressure to conform to the wishes of funders (2007a: 17).
During the interviews presented here, participants also raised various points in relation to the threats to the independence of their charities, and the implications for trustees. Some trustees had experienced situations that caused them concern over their ability to maintain their autonomy as leaders of the organisation, and perceived that external stakeholders such as funders posed a potential threat to the independence of the charity. For example, given the significant reductions in local authority budgets, there was a concern that charities contracted by the local authority would experience pressure to deliver services at reduced costs:
“That’s where it’s going to be interesting times, if one had a crystal ball for the third sector, say, over the next three years, I think it’s going to be really challenging because one wants to keep to high standards, you do have missions statements, you do have your values [but] local authorities are turning around and saying you have to cut your expenses by 25%.” (Pauline, Trustee)
This is a pertinent issue, particularly given the deep cuts to voluntary sector funding as a result of the Coalition Government’s ‘austerity measures’ (Kane and Allen, 2011; Alcock, 2012: 7), as discussed in Chapter 3.
Another way in which trustees’ autonomy to direct the activities of their charities is potentially threatened is by the terms and conditions imposed by funding bodies. Following Cunningham’s (2008) research that found charities resisting, with varying levels of success, attempts by local authority funders to influence employment terms and conditions such as job-grading, holidays, hours and unsocial hours payments, there was some evidence here that trustees had experienced pressure from external funders. One trustee reported how her organisation had decided to turn down funding from a particular funder because it came with the caveat that they should not employ a particular member of staff:
“We went to another charitable funder … and asked them to support us in these first 18 months and again, they were dictating who we should employ. They would have given us money if we had changed particular personnel in the organisation. We said no. We lost that. But we had to keep to our principles.” (Alice, Trustee)
Participants reported other examples of how their relationship with funders had the potential to threaten the independence of trustees to run their charities as they see fit. Cairns et al. (2005) identified that charities often adopt quality monitoring systems in response to pressure, or anticipate pressure, from external funders. Similarly, this study found evidence that organisations’ procedures are influenced by the standards or monitoring requirements imposed by funders:
“And now with the ludicrous way of obtaining money, we have to tick boxes. I mean - the people you meet, I am meeting, they are totally destitute many of them, you know. And yet we have to fill in boxes - what we gave and who we gave it to and when we gave it, and how often we gave it. And we have to fill in forms, and then we send the forms off. And that's the only way we can get money to give to these people.” (Michael, Trustee)
“In order to look good for funders we have to tick so many boxes. And that is what so much of the committee work is about, being able to demonstrate having the sort of structures and policies in place which I think are out of proportion to a small organisation like ours”. (Sian, Trustee)
“Our local authority and Primary Care Trust are our main funders and they now work... they now talk in a language that’s about outcomes and impact and performance management, and delivery, and performance indicators. And [our charity] is struggling to meet those requirements.” (Charlotte, Trustee)
Gary, another trustee, felt that charities with more detailed and robust policies were more likely to score higher points in commissioning tenders for public service delivery contracts. As a result there is pressure to develop more complex policies and procedures in order to present the organisation in a more favorable light to potential funders:
“What drives [our policies and procedures] is actually the requirements of funders now. So for example, our local authority in Liverpool as a bare minimum would expect you to have a policy on CRB checking your staff. And there is a danger that it becomes too detailed and bureaucratic and you spend more time trying to make sure you keep to the policy than doing anything useful.” (Gary, Trustee)
A second aspect of charity independence, as discussed in Chapter 3, is the freedom of voluntary sector organisations to campaign or lobby government (Rosenman, 2009; Onyx et al., 2010; Mosley, 2011). A number of participants perceived part of their role as providing a ‘voice’
for service users and highlighted the importance they attached to protecting their charity’s independence in this respect:
“I do want to make sure when I’m sitting on the board, you know, even if I don’t say anything, if there is anything I think is against [service users’] interests then I like that I’m able to voice that if necessary.” (Kirsty, Trustee)
“Its quite interesting how contract culture, I think its held up as a potential answer to a lot of funding, but actually, its incredibly dangerous as well, for charitable organisations because you actually have to adopt the agenda of the local authority.” (Annette, Trustee)
The representative from the Government’s Office for the Third Sector also acknowledged such concerns about whether funding from statutory bodies impedes organisations’ freedom to criticise or lobby statutory agencies and their policies:
“I think that sort of concern about how you challenge your funders, whether its your statutory funders or whether it is through grants or contracts, is becoming a big issue for third sector organisations particularly when the money is going to start dropping off, leaving these organisations rather exposed. How do you put across an important point about government policy if you are being funded by government?” (Head of Third Sector and Social Enterprise, Department for Communities and Local Government)
The Chief Executive of a local advocacy charity gave an example of a potential threat to a third aspect of charity independence. He explained that his charity had, on more than one occasion, been asked to bid for contracts relating to work with their core group of beneficiaries, but in new areas of work. The board of trustees had declined these invitations to tender in order to protect the core mission of the organisation. They perceived that taking on service delivery roles would create a conflict of interests and threaten the charity’s independence to act as an advocate for clients:
“Both the local authority and CVS have said “Would you take this on?” We went back and said no because it was taking us into service delivery. And there is a huge area of conflict of interest
there for [our trustees] because if we are managing advocacy, how would you then manage a service delivery that your advocacy plans may have a conflict with.” (Graham, CEO)
Concerns about charities experiencing ‘mission drift’ in order to access new sources of income is an issue closely related to charity independence (Osbourne and McLaughlin, 2004) and was examined in some detail in Chapter 3. During interviews, a number of members of the policy community concurred that the risk of mission drift was indeed a threat for voluntary sector organisations in the current economic environment:
“In terms of governance issues, a mission creep is another one that commonly comes up. I think it's always been a problem, and I think one of the things that has helped, and is helping with that, is the requirement for charities to report their public benefit now. Because it means that trustees have to sit down and basically go back to their charitable purposes and say “this is what we're set up to do; are we doing it?” So I think that mitigates against it. But mission creep, in my view, is around chasing funding, pure and simple, trying to fit a square peg into a round hole.” (Policy Manager, Office of the Third Sector)
“We are very pro the sector’s role in delivery, but that has to be on the consideration that any organisation bidding understands why this contract would further their mission and if it doesn’t they shouldn’t do it.” (Director of Strategy, ACEVO)
“The other area around contracting is that it tends to tempt organisations into mission drift… Mission drift is a bit of a risk.” (Programme Manager, Merseyside ChangeUp)
The data provided several examples of participants who had experienced situations in which their organisations were faced with decisions that could potentially affect how closely they held to their original mission statements or led them to shift into new areas outside their core aims and objectives to attract funding:
“We need to make money, we need to generate income, so we rent a lot of space out. We are in danger of becoming a landlord rather than keeping our cores aims, which is around women and
children. But we have to do that to be able to sustain ourselves.” (Alice, Trustee)
“I mean, again, I'm being taped, but… I've gone along with things which I wouldn't have done … in other words, I've disagreed to some extent with what has gone on, the priorities, you know. Because we've moved over, very much over, to being dependent … we tend to be directed by where we can get the money from so that we are distorted in our vision.” (Michael, Trustee)
Despite concerns, the majority of trustees were keenly aware of the need to remain mindful of the charity’s core aims and mission statement when taking decisions about the organisation’s future. There was a perception that trustees should be cautious not to ‘chase’ funding where it would lead them into areas that did not fit well with their strategic aims and main charitable purpose:
“Well, things change. I think we’ve evolved over the years but whatever we’ve evolved to do, we’ve always kept our [beneficiaries] focus. We have evolved but we haven’t evolved just to get that pot of money. I’ve seen quite a few, a couple of local community groups, one of them particularly a local arts community group quite close to us, who will move their projects where the money is.” (Julia, Trustee)
“In a sense, we’ve moved now into delivering a public service, but we’ve still got our own bits, you know, and I think it’s also the trustees role to decide where the funding fits in with the ethos of the organisation. Because we don’t chase money for money’s sake, because there is a principle around what we do and if we’re going to go outside that, then there has to be…the trustees have to discuss where that fits in with the principles of the organisation. You know, ‘we’ve been approached to do this, does this stand inside our Memorandum and Articles of Association25 or doesn’t it, and if it doesn’t, do we want to change them so that we can accommodate doing that work?’ And in most cases, they haven’t wanted to change the direction.” (Patricia, CEO)
25 Documents that detail the setting up of and running of a Company’s internal affairs, and that may include reference to the charity’s aims and mission.