tag:theconversation.com,2011:/uk/topics/kids-company-19374/articlesKids Company – The Conversation2018-02-23T12:16:49Ztag:theconversation.com,2011:article/921972018-02-23T12:16:49Z2018-02-23T12:16:49ZWhat Oxfam can learn from charities that survived scandals<p>The <a href="https://www.thetimes.co.uk/article/top-oxfam-staff-paid-haiti-quake-survivors-for-sex-mhm6mpmgw">Oxfam scandal</a> has brought to the fore the relationship between the public and charitable organisations. Accusations that Oxfam covered up claims that senior members of its staff in Haiti used prostitutes has brought the reputation of the organisation into question.</p>
<p>The unethical behaviour of its staff is a short-term issue for Oxfam to deal with, but its long-term impact could have a profound effect on the charity’s work. Oxfam is not the first high-profile charity to be caught up in a scandal. But past examples show that some fared better than others when it came to surviving the media and public backlash that followed.</p>
<p>Prominent Non-Governmental Organisations (NGOs) such as Oxfam have come to occupy an important position in the modern political landscape. This is due in part to the expertise that these organisations obtain on specific matters such as humanitarian aid, the environment and human rights. This expertise can be used by politicians to inform government policy and by journalists to set the media agenda around these issues.</p>
<p>Alongside this, throughout the 20th century, people have come to increasingly <a href="https://global.oup.com/academic/product/the-politics-of-expertise-9780199691876?cc=gb&lang=en&">trust the work of NGOs more than political figures</a>. This demonstrates a shift, with experts now occupying an important part of modern political life. The trust and respect for the work of NGOs is visible in the financial donations given by members of the public wishing to support the ideals of organisations such as Oxfam.</p>
<p>What happens when this trust is challenged by scandal? Are the consequences an end to these donations, as reports suggest that more than <a href="https://www.mirror.co.uk/news/uk-news/more-7000-brits-stop-oxfam-12059318">7,000 people in Britain have done</a>, or are there more deep seated effects? Are the NGOs themselves ruined by the events, or are there mechanisms by which they can defend their work?</p>
<h2>Amnesty</h2>
<p>Amnesty International occupies a central position in how human rights are understood in the modern world. Its campaigns regularly attract significant media attention and it has been rightly heralded as making a genuine change to peoples’ lives <a href="https://www.theguardian.com/uk/1961/may/28/fromthearchive.theguardian">since its foundation in 1961</a>. Yet the history of the organisation is not without scandal. Amnesty’s founder Peter Benenson was unceremoniously removed from a senior post in the organisation in 1967 following allegations that the NGO <a href="https://academic.oup.com/tcbh/article-abstract/15/3/267/1702572?redirectedFrom=fulltext">had been infiltrated</a> by British intelligence agents and had distributed secret funds.</p>
<p>This was particularly damaging at the height of the Cold War, where accusations of secret government funding <a href="http://grantabooks.com/Who-Paid-The-Piper">brought other organisations to their knees</a>. Similar scandals occurred in the late 2000s when Amnesty was found to have paid substantial pay-offs to senior members of the organisation, <a href="http://www.dailymail.co.uk/news/article-1358537/Revealed-Amnesty-Internationals-800-000-pay-offs-bosses.html">drawing the ire of the press</a>. </p>
<p>Despite this, Amnesty continues to flourish. This is in part due to the philosophy that binds the organisation together – protecting victims of human rights violations. This powerful ethos, <a href="http://www.cornellpress.cornell.edu/book/?GCOI=80140100173990">which has been likened to a secular religion</a>, has allowed Amnesty to deflect these controversial events and maintain its efforts unhindered.</p>
<h2>Greenpeace</h2>
<p>Similar controversies have affected environmental NGOs. Greenpeace has been involved in several scandals throughout its history. This is in part due to its tactic to attract media attention <a href="https://books.google.co.uk/books/about/McLuhan_s_Children_The_Greenpeace_Messag.html?id=TALZBQAAQBAJ&redir_esc=y">through its campaigning efforts</a>. <a href="https://www.theguardian.com/environment/2014/jun/23/greenpeace-losses-financial-disarray">Scandals of financial mismanagement</a>, the short-haul aeroplane commutes of some of <a href="https://theconversation.com/the-greenpeace-executives-commute-is-a-flight-of-fantasy-28368">its leading figures</a> and the adoption of morally dubious policies to identify climate change sceptics <a href="https://theconversation.com/does-it-matter-that-greenpeace-journalists-lied-in-order-to-expose-academics-for-hire-52192">in the pay of energy companies</a> have all impacted its public image. Yet Greenpeace still maintains public support, again arguably due to the strong ideals binding the group together.</p>
<p>So what next for Oxfam? The increased size and scale of NGOs in the modern world means that scandals are increasingly inevitable. How these organisations respond to them will rely on drawing upon the philosophy that binds them together. Oxfam is not its CEO Mark Goldring, its international executive director Winnie Byanyima or Roland van Hauwermeiren – the former Oxfam official who is at the centre of the current controversies. It is a broader idea about making the world a better place. Perhaps it is this ideal that will come to protect Oxfam’s integrity. </p>
<hr>
<p><em>This article was amended on February 23 to remove a reference to the Kids Company collapse, which could have been misinterpreted. We are happy to make this change and apologise for any confusion.</em></p><img src="https://counter.theconversation.com/content/92197/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Mark Hurst does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Oxfam is not the first charity to be drawn into a high profile scandal. If it is to survive it needs draw on its core ideals.Mark Hurst, Lecturer in the History of Human Rights, Lancaster UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/541402016-02-04T11:31:59Z2016-02-04T11:31:59ZAccounting for Kids Company – why charities’ books must add up<p>The collapse of the charity Kids Company has attracted a huge amount of attention – not least as a result of the drama involved. Investigations into what went wrong have brought forth <a href="http://www.bbc.co.uk/news/magazine-34676281">stories</a> of teenagers queuing up to pick up envelopes of money from the charity that they promptly spent on drugs. </p>
<p>Reports also emerged that the charity claimed its closure would lead to <a href="http://www.theguardian.com/uk-news/2015/aug/25/kids-company-warned-officials-closure-could-lead-to-riots-and-social-unrest">riots and attacks on government buildings</a>. And transcripts can be read of a long and rowdy <a href="http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/public-administration-and-constitutional-affairs-committee/kids-company/oral/23222.html">session</a> of the public administration and constitutional affairs committee of MPs, which investigated the closure of the charity and took evidence from Camila Batmanghelidjh, Kids Company’s founder:</p>
<blockquote>
<p>Camila Batmanghelidjh: I would like to ask you on what basis you have decided that this is a failing charity. Because if it is on the basis –</p>
<p>Chair: Because it has gone bust.</p>
</blockquote>
<p>The less dramatic story, and the more worrying one, is about financial control in Kids Company and the value placed on financial literacy across the charity sector.</p>
<p>Kids Company produced annual accounts which it duly deposited with the Charity Commission, the charity regulator. It went through the proper audit process every quarter, every year – something Alan Yentob, chair of the charity’s trustees, frequently mentioned <a href="http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/public-administration-and-constitutional-affairs-committee/kids-company/oral/23222.html">in his evidence to the MP inquiry</a>. However, the fact that every year referred to Kids Company’s shortage of reserves, and potential cash flow problems, seems to have been outweighed by the copious data making claims for its successes. </p>
<p>In 2013, for instance, its <a href="https://www.accountancylive.com/sites/default/files/Kids%20company%20Annual_Report_2013.compressed.pdf">annual report</a> (pdf) featured data on the problems of “750 exceptionally vulnerable young people” who had been successfully helped by the charity, and another 200 under-14s, one in four of whom had no tables and/or chairs in their houses. Kids Company was also very vocal in claiming that it supported “some 36,000 children, young people and vulnerable adults”. But this has <a href="http://blogs.channel4.com/factcheck/kids-company-qa/21849">been disputed</a>, as only 1,900 cases have been passed onto London local authorities since its collapse.</p>
<p>Even if all of Kids Company’s impressive data were true, the reader of the accounts has nothing to measure them against. How were these sample groups selected? What was the evidence for these problems? Is this better or worse than other charities, or than what might be expected of Kids Company? Reports of Kids Company’s good deeds were heeded over its financial viability, as indicated by <a href="https://www.gov.uk/government/publications/kids-company-funding-ministerial-direction">exchanges between the government and senior civil servants</a>.</p>
<h2>Judging results</h2>
<p>What has attracted less attention than the apparent overstatement of clients was the reluctance of Kids Company to let its results be monitored. The National Audit Office (NAO), tasked with certifying the accounts of all government departments, <a href="https://www.nao.org.uk/report/investigation-the-governments-funding-of-kids-company/">commented</a> that the government had “relied heavily on Kids Company’s self-assessments to monitor its performance”. Until 2013, the key performance indicators that the NAO requested did not appear in Kids Company’s quarterly monitoring reports. </p>
<p>This improved in 2013-15 when the government specified some “delivery expectations”. As the NAO <a href="https://www.nao.org.uk/report/investigation-the-governments-funding-of-kids-company/">reported</a>, Kids Company outperformed to a startling degree: “Against a target of 1,347 interventions in 2013-14, they delivered 30,217 interventions.” But how successful were the interventions in improving outcomes? There was no pre-arranged standard for measuring success so the government could not monitor it.</p>
<p>When the MPs inquiry asked Kids Company’s auditor about the charity’s reserves – how much he thought would be a safe level – he <a href="http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/public-administration-and-constitutional-affairs-committee/kids-company/oral/24766.html">suggested</a> six months of expenditure or roughly £12m would be an appropriate level. In its last available balance sheet for 2013, the last available, Kids Company shows its unrestricted reserves were just £434,282 <a href="http://www.bbc.co.uk/news/uk-33861713">in 2013</a>, with a further £1.3m in restricted reserves and designated funds – about enough money to keep it going for a fortnight. </p>
<p>The trustees stated in the 2013 report that they were aware reserves needed to increase, but that their “business model is to spend money according to need, which is consistently growing. We aspire to build up our reserves when circumstances allow”. It seems that they deferred the aspiration for too long.</p>
<h2>Causes vs accounts</h2>
<p>Some have accused a focus on accounting as a distraction from worthy causes. Some decisions, <a href="http://www.sciencedirect.com.eresources.shef.ac.uk/science/article/pii/S1045235411001699">it is argued</a>, should not be made on the basis of purely financial costs and benefits. How can individual welfare or happiness – and the contribution of charity – be valued in monetary terms? Financial accounting is just a reductive simplification of the work charities do, treating people’s welfare as an expense to be contained. On this basis, we should not criticise Kids Company for its financial collapse – the work it did was invaluable.</p>
<p>But the alternative to measuring and monitoring charity performance is not the free flow of support to the deserving. It is the loss of resources that could potentially have been better managed and better used elsewhere. Kids Company received a total of <a href="https://www.nao.org.uk/report/investigation-the-governments-funding-of-kids-company/">£46m of public funding</a> – £42m in central government grants, £2m from local authorities and £2m from lottery organisations – between 2000 and August 2015, when it filed for insolvency. </p>
<p>If Kids Company had been accountable, run by trustees who understood the financial risks they were taking, and monitored by funders against measurable outcomes, it might not have gone bust.</p><img src="https://counter.theconversation.com/content/54140/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Josephine Maltby does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Reports of Kids Company’s good deeds were heeded over its financial viability – with disastrous results for the charity in the long run.Josephine Maltby, Professor of Accounting and Financial Management, University of SheffieldLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/458582015-08-11T14:38:26Z2015-08-11T14:38:26ZKids Company has closed its doors: where to from here?<p>After 19 dedicated years of service to child welfare in the UK, well-known children’s charity Kids Company has closed its doors amid a whirlpool of controversy. </p>
<p>An <a href="http://www.bbc.co.uk/news/uk-politics-33356304">investigation by BBC’s Newsnight and BuzzFeed</a> revealed that £3m of government funding was to be withheld from the charity, unless its leader – Camila Batmanghelidjh – stepped down. The funding <a href="http://www.independent.co.uk/news/uk/politics/david-cameron-says-decision-to-hand-3m-grant-to-kids-company-days-before-charitys-collapse-was-the-right-thing-to-do-10445493.html">was reinstated</a> against <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/445933/20150626_Request_for_Ministerial_Direction_-_RH_to_OL_and_MH.pdf">the advice of senior civil servants</a> and despite allegations of <a href="http://www.bbc.co.uk/news/uk-politics-33356304">financial mismanagement</a> and <a href="http://www.bbc.co.uk/news/uk-33726968">misconduct</a>. Later, <a href="http://www.bbc.co.uk/news/uk-33641889">it was reported</a> that the Cabinet Office has plans to recover the funds, and the charity <a href="http://www.bbc.co.uk/news/uk-33822035">closed its doors on August 6</a>. </p>
<p>The charity sector plays a crucial role in protecting vulnerable children and families. The National Children’s Bureau 2011 report, <a href="http://www.ncb.org.uk/media/431274/the_ripple_effect.pdf">Ripple Effects</a> identified more than 64,000 charities working in child welfare and child protection across the UK. Children’s charities have however, been vulnerable to austerity measures. Government funding is <a href="http://www.ncb.org.uk/media/705870/beyond_the_cuts.pdf">expected to have been reduced by £405m</a> by 2016. </p>
<p>In the face of austerity, when a household name like Kids Company closes down, it’s important to reflect on its legacy.</p>
<p>Started in 1996 by Camila Batmanghelidjh, <a href="http://www.kidsco.org.uk/about-us">the mission of Kids Company</a> was to provide education as well as practical and emotional support to inner-city children living in deprived or dangerous neighbourhoods. It operated in London, Bristol and Liverpool, offering support to schools and communities through 11 street centres, partnership with 40 schools and outreach work with vulnerable communities. A therapeutic performing arts programme was also operated in Liverpool. </p>
<p>The broad remit of Kids Company has been to provide different avenues of skilled support to vulnerable children, young people and families at the street level, using a <a href="http://www.kidsco.org.uk/our-work">“unique wraparound package of care” for each child</a>. Despite the <a href="http://www.theguardian.com/social-care-network/2015/aug/03/kids-company-charity-camila-batmanghelidjh">criticism of narrow therapeutic interventions</a>, it is undeniable that over two decades, Kids Company has increased its reach and impact in working with vulnerable children. </p>
<h2>Distinguished service</h2>
<p>Over the years Kids Company has distinguished itself within the charity sector. In 2007 <a href="http://www.kidsco.org.uk/about-us">it was awarded</a> the Liberty and Justice Human Rights Award. It was also awarded “Child Poverty Champion” status by the Child Poverty Action Group, for its work in empowering disadvantaged children and young people. By 2013, this growing recognition within the sector enabled Kids Company to secure government funding of £8m over two years, which was to be used to provide summer residential programmes focused on retraining and employment.</p>
<figure class="align-left ">
<img alt="" src="https://images.theconversation.com/files/91329/original/image-20150810-11101-14gua5q.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/91329/original/image-20150810-11101-14gua5q.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=1110&fit=crop&dpr=1 600w, https://images.theconversation.com/files/91329/original/image-20150810-11101-14gua5q.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=1110&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/91329/original/image-20150810-11101-14gua5q.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=1110&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/91329/original/image-20150810-11101-14gua5q.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1395&fit=crop&dpr=1 754w, https://images.theconversation.com/files/91329/original/image-20150810-11101-14gua5q.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1395&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/91329/original/image-20150810-11101-14gua5q.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1395&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Charismatic character: Camila Batmanghelidjh.</span>
<span class="attribution"><a class="source" href="https://commons.wikimedia.org/wiki/File:Camila_Batmanghelidjh,_April_2008.jpg">Garry Knight/Wikimedia Commons</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<p>Of course, it’s impossible to discuss Kids Company without mentioning the charismatic personality of its leader Camila Batmanghelidjh. A strong voice for immigration, enterprise and child welfare, Batmanghelidjh has also received accolades for her work in the charity sector, including a CBE. Charitable organisations often need strong voices and colourful advocates to etch their social cause into public memory, and Batmanghelidjh is a formidable force in the charity world. </p>
<p>Indeed, <a href="http://www.theguardian.com/commentisfree/2015/aug/06/left-right-loved-kids-company-camila-batmanghelidjh-charity-unorthodox">it has been noted</a> that part of what made Kids Company unique is the fact that it was a “product of a profoundly unequal city where extremes of deprivation and of privilege co-exist uneasily; the genius of Camila Batmanghelidjh was being at home in both, serving the former by prodding the conscience of the latter”. But the often unconventional approaches used by Bantmanghelidjh, and her closeness to certain government officials and wealthy allies, have fuelled existing controversies around <a href="http://www.dailymail.co.uk/news/article-3192918/Kids-Company-trustee-s-children-charity-s-payroll-String-foreign-trips-daughter-hired-32-500-music-ordinator.html">financial mismanagement</a>. </p>
<h2>A bad omen for charity work?</h2>
<p>On one level, these events <a href="http://www.theguardian.com/voluntary-sector-network/2015/aug/07/kids-company-closure-lessons-trustees-charity-sector">serve as a warning</a> that charities must not be held up by a single personality; creating and sustaining a positive impact will depend on more than just the face of an advocate – no matter how recognisable that face is. </p>
<p>But the closure of this veteran organisation also highlights the uncertainties surrounding the charity sector at the current time, and has <a href="http://www.independent.co.uk/voices/the-lesson-from-kids-company-leave-to-charity-leave-to-chance-10441475.html">stoked fears about the wider decline</a> of the welfare state. The end of Kids Company raises questions about whether charities should have close links to the private sector; or whether the wider child protection agenda should remain within the ambit of the government. </p>
<p>The fact is that 6,000 vulnerable children now no longer have the support of Kids Company. Between the political wrangling of the government and the demise of this charity, there is a serious risk that the voices of people who use these services will be lost. As <a href="http://www.theguardian.com/social-care-network/2015/aug/03/kids-company-charity-camila-batmanghelidjh">Peter Beresford reminds us</a>, it is the service users themselves – the under-priviledged children, young people and families – who are best placed to comment on the contributions made by Kids Company. Anyone who attempt to “fill the gap” left by Kids Company – whether government or charity – has a duty of care to those left behind.</p><img src="https://counter.theconversation.com/content/45858/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sweta Rajan-Rankin does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>A stalwart of the charity sector is dead and gone - so now what do we do?Sweta Rajan-Rankin, Lecturer in Social Policy, Brunel University LondonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/458982015-08-11T05:33:15Z2015-08-11T05:33:15ZKids Company: the sad truth about why charities suddenly collapse<p>A backlash has begun against the children’s charity, Kids Company, which has been shut down amid questions about how it used government funding. Some critics have accused the charity of failing to keep reserves, while others have criticised its <a href="http://www.telegraph.co.uk/news/bbc/11792030/Pressure-growing-on-Alan-Yentob-and-fellow-trustees-after-Kids-Company-closure.html">hand-to-mouth financial practices</a>. </p>
<p>But the critics have no understanding of the stringent criteria laid on such organisations or the endlessly counter-intuitive and contradictory demands placed on them from funders and auditors.</p>
<p>It is patently obvious why a charity like Kids Company could suddenly collapse. Many other similar charities come very close to the same fate on any given day of the week – particularly those providing public services such as education, training or social support.</p>
<p>At one charity I have known over many years, the possibility of folding is on the agenda at every single trustees’ meeting. This particular charity has moved from being completely dependent on grants to providing public services for contract fees for delivering government programmes such as media training. In the process, its economic situation has shifted from tight to perilous.</p>
<p>This is a familiar path. Under the current and previous UK governments, charities have increasingly been used to replace the state as providers of public services. They do so under contract but the situation has become untenable. The contracts can end up costing an organisation money rather than enabling it to earn. They are often paid according to specific results, which fail to take into account all the other good work they do. As a result, some have discussed dropping the services they provide.</p>
<p>However much charities believe in improving the lives of deprived people (or animals, or environments), they share the fate of companies that simply cannot keep going at a loss. </p>
<h2>Staying afloat</h2>
<p>The Charity Commission recommends that charities <a href="https://www.gov.uk/government/publications/charities-and-reserves-cc19/charities-and-reserves">have reserves</a> and although it doesn’t specifically say how much those reserves should be, a rule of thumb is often taken to be three months’ salary provision. On the other hand, funders often refuse to donate to organisations with any significant reserves.</p>
<p>Finding another funder is not necessarily straightforward either. Although it might look as if there are many philanthropic organisations around, most of them have very tightly drawn funding criteria. Some make decisions based on geography, others by purpose and others by amount.</p>
<p>And applying for funding takes time – which costs money. Very few funders include organisational or managerial costs in their funding agreements (and service contracts are the worst). That leaves charities forced to find creative ways to eke administrative costs out of funding agreements.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/91328/original/image-20150810-11104-17xlehx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/91328/original/image-20150810-11104-17xlehx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=404&fit=crop&dpr=1 600w, https://images.theconversation.com/files/91328/original/image-20150810-11104-17xlehx.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=404&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/91328/original/image-20150810-11104-17xlehx.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=404&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/91328/original/image-20150810-11104-17xlehx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=508&fit=crop&dpr=1 754w, https://images.theconversation.com/files/91328/original/image-20150810-11104-17xlehx.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=508&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/91328/original/image-20150810-11104-17xlehx.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=508&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">David Cameron and Camila Batmanghelidjh.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/demos/4274138788/in/photolist-7vG5y5-8QGJGp-8QGJ8X-8QGJtF-a1nbqR-7vG5y9-rkjzYK">Demos</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc/4.0/">CC BY-NC</a></span>
</figcaption>
</figure>
<p>After all, how can you administer a grant with no one to administer it? Who is supposed to run an organisation that delivers services if the cost of administration is not included in the service contract? Who do funders think will be there to satisfy their bureaucratic demands for monitoring, reporting, data collection and all the many forms of accounting they include, often out of all proportion to the amount of money provided?</p>
<p>The kind of mindlessly insulting criticism <a href="http://www.theguardian.com/politics/2009/oct/08/liam-fox-mod-defence-review">“backroom functions”</a> bandied about by over-salaried politicians seeking to cut bureaucracy has led to a real crisis. Faced with increasing demands for ever more detailed auditing information, yet denied any funding for the staff-hours required to satisfy such demands, is it any surprise that charities are getting into trouble? And who can be surprised that their survival is usually at the expense of the health, family-time and well-being of their pitifully paid employees? </p>
<p>But the government can often be the worst kind of funder. Civil and public servants, especially career public servants, often have little insight into how charities operate or how perilous life can be under short-term financial arrangements. Dribs and drabs of uncertain funding keep charities in limbo and unable to plan effectively. </p>
<h2>Divide and conquer</h2>
<p>Of course the charity sector as a whole is no cloud of angels. Competing ever harder for ever scarcer sources of funding (especially dwindling public funding), some lose sight of the greater good. Some even delight in the collapse of their competitors in the mistaken belief that they may profit from their demise.</p>
<p>Big and successful charities like Kids Company do tend to attract envy and suspicion – why are they getting big government grants when we are not? Why do they seem so successful while we are crumbling? These tensions simply add to the pressure for managers of small charities – who must excel at every task. They have to be a manager, an inspiring leader, a fundraiser, an accountant, a PR charmer, the personnel office, and more. </p>
<p>Smaller charities in particular end up hanging on in the hope of receiving sparse favours despite constant rebuttals and unreasonable demands, often because they have nowhere else to turn. If one funder delays its decision, the whole charity could collapse.</p>
<p>The question is not why Kids Company collapsed so suddenly, but how on earth it managed to continue working for so long under such unreasonable conditions.</p>
<p>There should not be surprise that the government gave Kids Company <a href="http://www.telegraph.co.uk/news/uknews/11791018/Kids-Company-scandal-it-was-right-to-give-3m-last-chance-David-Cameron-insists.html">another £3m at the last minute</a>, but about the fact that the government never instituted a sustainable funding stream for the services that Kids Company was providing.</p>
<p>The real question is why Batmanghelidjh was forced to beg for more money when her organisation was clearly helping distressed clients.</p>
<p>Charities cannot replace the welfare state. That they are now being expected to do so without the reliable funding required is a reflection of the political bankruptcy of our times.</p><img src="https://counter.theconversation.com/content/45898/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Simone Abram is affiliated with Heeley Development Trust (chair of trustees). But no benefit could arise form this article to her or to the organisation. She has received funding from ESRC to study local organisations, none of which stand to benefit from this article. She is a trustee for the Royal Anthropological Institute of Great Britain.</span></em></p>When funding comes sporadically with strings attached, how can vital services keep running?Simone Abram, Reader in the Dept of Anthropology, Durham UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/447302015-07-16T14:21:49Z2015-07-16T14:21:49ZIf charities are to deliver more health and social services they’ll need to become better organisations<figure><img src="https://images.theconversation.com/files/88526/original/image-20150715-26319-t1z6td.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Camila Batmanghelidjh and Kids Company: a victim of its own remarkable success. </span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/56675543@N08/5911343345/in/photolist-a1nbqR">NHS Confederation</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span></figcaption></figure><p>In a week of Greek tragedies it has also been hard to distinguish the gods from the monsters in civil society. Three recent important stories about charities question the accountability and management of the third sector. </p>
<p>Despite <a href="http://www.kidsco.org.uk/about-us">Kids Company</a> being the most successful organisation working with poor children in the country, the charity’s founder, Camila Batmanghelidjh, took a sustained beating from the Cabinet Office which ended up in a demand for her resignation in return for £3m of a £5m funding shortfall – something she says <a href="http://www.thetimes.co.uk/tto/life/article4494696.ece">she won’t be bullied into doing</a> before her plan to leave next year.</p>
<p>A former government minister <a href="http://www.theguardian.com/society/2015/jul/03/camila-batmanghelidjh-government-briefing-kids-company">was quoted as saying</a> that governments of all colours recognised that the charity’s work is extremely valuable and reached parts of the statutory social care system that others didn’t, there as an “unsatisfactory process where Camila would effectively come in and say ‘I’m about to fold if you don’t give me £5m’. That happened on a regular basis and more often than not the hole was plugged … the charity keeps growing and there’s been no retrenchment. She [Camila] cannot say no.”</p>
<p>Putting aside the irony that welfare cuts are in response to a sudden and massive private banking crisis, it appears that Kidsco is a victim of its own remarkable success. </p>
<p>Then there was the very different case of Turning Point and Ibukun Adebayo, the IT director who <a href="http://www.standard.co.uk/news/london/diana-charity-chief-set-for-payout-after-boss-branded-her-looney-tunes-and-sent-obscene-email-about-her-10371214.html">won her case</a> against the mental health charity for unfair dismissal. This was a sorry tale of old-fashioned discrimination and lack of accountability in which Adebayo discovered, among other things, that she was described by the David Hoare, the charity’s deputy chief executive as “Looney Tunes” in an email to the chief executive. Unlike Adebayo, Hoare continues to work at Turning Point.</p>
<p>And then there was the Daily Mail’s <a href="http://www.dailymail.co.uk/news/article-3154251/Now-charities-forced-action-cold-calling-Bosses-agree-clean-act-boiler-room-tactics.html">exposure</a> of the “boiler room” tactics of the big charities including Oxfam, Cancer Research and Save the Children, who were accused of cold calling people who had signed up to a “no call” list on the UK telephone preference services, pressuring people to donate and asking for donations from vulnerable people who had dementia.</p>
<p>With <a href="http://dera.ioe.ac.uk/7133/">government policy</a> to expand public funding to the third sector and the decentralisation of commissioning in health there is <a href="http://www.birmingham.ac.uk/generic/tsrc/documents/tsrc/working-papers/working-paper-20.pdf">likely to be a growth</a> in <a href="http://www.nao.org.uk/wp-content/uploads/2005/06/050675es.pdf">sub-contracting services</a> to this sector. As a result we must be able to map which third sector organisations are working in health and social care and make distinctions about organisations on the basis of their capacity to provide quality care.</p>
<h2>The third sector</h2>
<p>Around <a href="http://data.ncvo.org.uk">800,000 people</a> work in the third or “voluntary” sector in the UK, and with more than 164,000 registered charities and a <a href="https://www.gov.uk/government/publications/charity-register-statistics/recent-charity-register-statistics-charity-commission">combined annual income</a> estimated at £64 billion, their role in providing social goods is not marginal.</p>
<p>The state funded the third sector to the tune of £13.9 billion in 2010, <a href="http://data.ncvo.org.uk/a/almanac12/what-are-the-main-trends-in-statutory-funding/">nearly half of which</a> came from local authorities. An estimated 437,000 third sector workers <a href="http://data.ncvo.org.uk/a/almanac12/what-is-the-voluntary-sectors-involvement-in-public-service-delivery/">are employed in health and social care</a> with 115,000 in residential care. </p>
<p>Much of the work with the most disadvantaged is carried out by religious groups, for example churches have historically <a href="http://www.pecan.org.uk">provided services for prisoners</a> and <a href="http://www.salvationarmy.org.uk/homelessness">the homeless</a>, social care <a href="https://humanism.org.uk/wp-content/uploads/BHA-Public-Services-Report-Quality-and-Equality.pdf">and education</a>, with a growing role in managing food banks <a href="http://policy-practice.oxfam.org.uk/publications/walking-the-breadline-the-scandal-of-food-poverty-in-21st-century-britain-292978">used by half a million people</a> in the UK. We are also seeing the growth of religious organisations sub-contracted to provide public services, such as welfare services <a href="http://www.crossreach.org.uk">in Scotland</a> and <a href="http://www.caringhandsuk.org.uk/about/index.html">in Kent</a>. </p>
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<figcaption><span class="caption">Mhairi Black’s maiden SNP speech: ‘food banks are not part of the welfare state, but a symbol of it failing’</span></figcaption>
</figure>
<p>Despite a long history of providing care, many religious groups are fundamentally sectarian in nature raising questions about universality of access when it comes to sub-contracting services.</p>
<h2>Social exclusion and the ‘dis-established’</h2>
<p>Third sector organisations have a competitive advantage when it comes to providing services: they have access to the people that need the help the most. The poor and vulnerable people who are hardest to reach.</p>
<p>Many people living in the UK are “dis-established” either by choice or necessity, <a href="http://www.jrf.org.uk/publications/monitoring-poverty-and-social-exclusion-2013">living outside of the social systems</a> set up to protect them. Some, like people with addictions or long term mental health problems, have exhausted state support or are unable to follow the treatment available. From <a href="http://www.jrf.org.uk/sites/files/jrf/migrants-private-rental-sector-summary.pdf">illegal immigration</a> to those <a href="http://www.iea.org.uk/sites/default/files/publications/files/IEA%20Shadow%20Economy%20web%20rev%207.6.13.pdf">working in the grey economy</a>, outside of labour regulation and national insurance systems, many people are excluded from health and social care, unable to give a name and address to even register at a GP practice. We don’t know how many families live by necessity outside of the social contract but as “<a href="http://www.theguardian.com/society/patrick-butler-cuts-blog/2013/jun/03/homeless-pensioner-offered-tent-by-council">cashless</a>” welfare reforms take place and poverty <a href="http://www.jrf.org.uk/topic/child-poverty">goes above 13m</a> people we can anticipate the number is growing. </p>
<p>But one of the inherent conflicts for third sector organisations is how public funding influences the principles on which they were established. This is acutely the case for charities, who legally cannot take a political position on the economic and social policies that are increasing the demand for their work. It means that an organisation like Kidsco <a href="http://www.thetimes.co.uk/tto/life/article4494696.ece">has to walk a very thin line</a> between continuing to access government funding and taking a position on the link between austerity and child poverty. </p>
<p>The lack of core funding for charities means that their accounts, although not technically corrupt, are often squeezed <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/438017/Trust_and_Confidence_in_the_Charity_Commission_2015.pdf">to fit the reporting requirements of donors</a>. It means that core salaries are hidden under “project coordination” and numerically defined outputs exaggerated to satisfy demands for value for money. All the while the unsustainability of many services in a climate of economic crisis and austerity is denied. It means that charities are often silenced when under attack. </p>
<h2>Getting the house in order</h2>
<p>Much of civil society is led by charismatic people who have a deep and sometimes obsessive belief in their cause. One of the problems with this commitment is that it can generate bullying by default. Where leaders are forced to sustain themselves for decades working unchallenged, their organisations can easily undermine the principles on which they are based. Many are run on guilt and the <a href="http://www.ucpress.edu/book.php?isbn=9780520221451">pressure for people within the system</a> to sacrifice their health for the greater good. A demand for total devotion and self sacrifice that walks the thin line between being right and becoming righteous.</p>
<p>The growth of third sector organisations in providing health and social care raises questions about organisational cultures and accountability. It also raises questions of equality and <a href="http://www.ucpress.edu/book.php?isbn=9780520221451">employment practices</a> for the people working within them, when issues of conscience and belief are a requirement for the job.</p>
<p>Challenging leadership is always hard, particularly when they operate on the moral high ground but that’s precisely what we have to do if we are to defend quality care. To do this we have to see civil society as it is. It is this realism that allows us to make the necessary distinctions between corruption and saying something that society doesn’t want to hear. If civil society is to protect the most vulnerable it has to be just that, civil, with the rights and responsibilities this entails. </p>
<p><em>This column looks at the reality of our health and care systems from the perspective of those working to deliver services. Please send us your anonymous <a href="http://survivingwork.org/top-tips/top-tip-1-how-to-restore-your-humanity/">stories from the frontline</a>.</em></p><img src="https://counter.theconversation.com/content/44730/count.gif" alt="The Conversation" width="1" height="1" />
In a week of Greek tragedies it has also been hard to distinguish the gods from the monsters in civil society. Three recent important stories about charities question the accountability and management…Elizabeth Cotton, Senior Lecturer, Middlesex UniversityLicensed as Creative Commons – attribution, no derivatives.