Charity Commission Chairman William Shawcross speaks on the importance of the relationship between the commission and local charities.
Good afternoon, I am delighted to be here with you. I always enjoy meeting people involved in the many thousands of charities working up and down the country. But sadly, I get few opportunities to do so. So I am grateful to Kathy Faulks at Voluntary Action Leeds for inviting me to this event.
All of us in this room are, in one way or another, part of a great tradition that continues to change and evolve. Charities have sustained the heart of our national life for centuries. William Beveridge, who founded the welfare state, described charity as running ‘like a golden thread through the living tapestry of our national story’. If you search the on line Register of Charities you will find that there are over 16 hundred charities based in Leeds. Our host, Voluntary Action Leeds, has been helping charities in this city for an impressive 60 years.
And the world of charity lives and changes all of the time. Charities continue to respond to evolving needs. Over recent years, for example, we have seen an upsurge in food bank charities and the phenomenal rise of the “street pastor” movement, which is also represented here in Leeds.
There are many reasons why charities continue to play such a vital role in our society. But there is one factor in particular that I and many others believe lies at the heart of charities’ continued success. And that is the trust and confidence the public continues to place in charities, at a time when trust in so many institutions in public life is fragile. We know from independent research that this trust is remarkably stable and enduring. It sustains the generous donations the British public makes to charity each year – people gave around £9bn in 2011-2; it sustains the substantial tax privileges that charities enjoy; and it helps ensure that so many people – over 3 million – regularly give of their time to volunteer for charities.
But public trust in charities cannot be taken for granted. And that is where the Charity Commission comes in. One of our most important statutory objectives is to increase public trust and confidence in charities. We do this above all by being an effective regulator. This means that we protect the reputation of charities by being vigilant in detecting and preventing wrong doing and by refusing charitable status to those who seek it improperly. Our related priorities are to prevent fraud, to protect vulnerable beneficiaries and – a particular issue at this time – to prevent terrorist penetration of charities.
So we maintain an accurate register and make sure that only organisations that are genuinely charities are on it. We hold charities to account by ensuring they meet their reporting requirements and transparency is promoted by ensuring the information is made public; we provide expert guidance to trustees on charity law, so that they know what they must do to comply with the law and what is expected of them.
And we assess and investigate concerns about charities when they arise. When allegations are made, we have an important role in providing public assurance that either the allegations are not true - or that the trustees, the Commission as regulator, the police, or other agencies have recognised a problem and have the matter in hand.
So our relationship with charities is correctly and primarily that of their regulator. In the past, we were able to provide one-to-one bespoke advice to charities on the workings of charity law. That has changed, . not least for resource reasons. By 2015, our budget will have declined by nearly half in real terms since 2007. As a result, we have to prioritise our resources on holding charities to account and tackling serious abuse. We cannot provide as much support for charities as we did in the past, although we will continue to publish guidance and advice on our website.
Many larger charities will hardly have noticed this shift. But I want to ensure that the many thousands of smaller, community charities – the kitchen table charities I mentioned - continue to receive the support they need to do well. After all, trustees are volunteers and their contribution to “the living tapestry of our national story’” is invaluable. The vast majority receive no financial reward, and support their charities in spite of having full time jobs, family commitments and busy lives. But, as the name suggests, trustees are in a position of “trust” and must make sure they understand what is expected of them and ensure they comply with their legal duties and responsibilities.
Our online guidance sets out the basics. But many need more support from time to time to help them fulfil public expectations, especially in terms of good governance and accountability. Our case work tells us that deliberate abuse is not the only cause of serious problems in charities. All too often charities get into trouble with charity law because their trustees do not fully understand their legal duties, or because they are negligent or complacent in fulfilling them.
Organisations like Voluntary Action Leeds play a vital role in helping charities thrive. And while the Commission cannot maintain individual relationships with many of the 160,000 charities on our register, we are working increasingly closely with partner organisations, such as umbrella bodies and membership charities. Our aim is simple: to help ensure all charities are compliant, well managed and continue to attract the support, and the trust, of the public.
And we continue to listen to charities. For example, we hold regular public meetings around the country. In fact it was at a recent meeting in Manchester that I met Kathy. These meetings help us share regulatory messages, but are also an opportunity to hear from charities.
We also produce an electronic newsletter with updates on our guidance and reminders of what is expected of trustees, which we plan to send to all trustees for whom we hold email addresses. Can I urge all trustees here who have not yet given the Commission their email addresses to please do so. Then we can keep you up to date all the time!
It is also important for us to hear the views of charities before taking significant steps that have an impact on them.
Of course, charities do not always agree with us. A regulator cannot expect to be always popular with those it regulates. But the Commission must focus on our role to serve the public, not charities. I am pleased to say that most charities recognise this.But there are occasionally times when our role or our motives may be misread or misunderstood. This can be worrying, for us and for charities.
For example, it has recently been suggested that the Commission’s investigatory work is ‘biased’ against Muslim charities. This concern has been raised with us by some charities and repeated in the media. This issue is of great concern to us. And I understand from Kathy that it is of concern to some of you here today as well.
So I would like to reassure you now that the Commission is in no way biased or prejudiced against any type of charity, religious or otherwise.
We have strict procedures and processes for assessing all concerns about charities – we call it our risk framework and it is published on our website for all to see. We use it whenever we find a cause for concern or when others bring a problem to us. Our criteria for opening an investigation are absolutely neutral and have nothing to do whether a charity is religious or not, who its trustees are or whether through its work it supports a particular community or group.
In addition to our investigation work, we ensure that charities operating in high risk areas or undertaking high risk activities are aware of their legal duties and responsibilities; this may be through our outreach events or in a compliance visit. I must stress that a compliance visit does not automatically mean that the charity in question is doing anything wrong; these visits are rather part of the public assurance role I referred to earlier. This work is also about supporting charities to achieve their objects.
So it is emphatically not the case that the Commission is targeting or disproportionately focusing on charities with links to Muslim communities.
This misconception may have arisen because we now more frequently announce new investigations, on the basis that it is in the public interest to do so. I believe this is an important step that promotes transparency about our work and about charities. It would be wrong to exclude any type of charity from this transparency.
In addition, Syria and the growing problem of extremism are in the public spotlight. Given the desperate humanitarian crisis in Syria, any charity supporting relief work in the region will be of high news value. And many of the charities involved have links to Muslim communities even if they are not themselves religious charities.
At present, we have announced 4 formal investigations into charities connected with their activity in Syria or related to the Syria crisis. Several are connected with aid convoys.
Of over 500 charities that say they operate in Syria, many of them are new - 201 were registered during the period of the conflict. They are therefore inexperienced and potentially vulnerable to exploitation. Assistance in the area is essential, but we have stressed the risks that such charities may – knowingly or not – be abused for extremist or terrorist purposes.
We have publicly reminded trustees that – to put it bluntly – they must know what they are doing when they attempt to deliver much needed aid in places such as Syria or Iraq. We cannot stop our work dealing with non compliance and abuse when these arise. And nor, I believe, would Muslim communities that have generously given to help those in need in Syria want us to stop this work.
At the same time we are careful to ensure our warnings to charities do not put the public off giving. We are well aware that Muslim communities make an enormous contribution to charity in this country and overseas. Ramadan is traditionally a time of peak charitable giving among Muslims, and this year was no exception. We continue to encourage people to give generously to experienced charities working in difficult areas; indeed, we have produced a YouTube video aimed at helping people make good choices about assisting the people affected by the crisis – you can view it on our YouTube channel.
Some commentators have implied that by pointing to these risks, we are treating charities unfairly. I disagree. We would be reneging on our duty as regulator if we did not alert charities to the dangers they face and did not support them in ridding themselves of such threats. We would be failing the public. So I am unapologetic in reaffirming here that I will ensure that the Commission continues to work in the public interest by alerting charities to risks, and helping trustees to avoid and manage those risks.
Please do not see this as anything other than what it is: the regulator extending a hand of help to those under threat by pursuing those who would injure them.
I can assure you that we are working hard to allay the concerns I have talked about. For example, our new Chief Executive, Paula Sussex and I, as well as our staff have been meeting with Muslim charities and leaders around the country listening to and discussing their concerns, supporting them where necessary and, at this time, joining in Eid celebrations.
I would like to make a couple of personal points. Some of you know my background is as a writer and a foreign correspondent and I have written books on many subjects, including war in Indochina and the Middle East. In the context of that experience, I would like to talk briefly about the vast, horrific crisis now unfolding in the Middle East and to explain the potentially disastrous impact on charities that are striving to alleviate suffering.
The continuing civil war in Syria has caused immense suffering, with over 3 million refugees and the destruction of much of Syrian society. It has now spawned the rise of ISIS, the organisation responsible for the brutal beheadings of Western hostages and many, many more innocent victims, Muslim, Christian, Yazidi and others. The march of ISIS across large parts or Iraq and now Kurdistan really does pose an existential threat to the region, and beyond. It has been one of the main pre-occupations of all leaders at the UN General Assembly this week.
One concern is that the serious of the situation is such that people might be deterred from giving because it seems so desperate and hopeless. We must not allow that to happen. But neither should we underestimate the extreme gravity of the threat we now all face.
Some years ago, I was honoured to meet in Djakarta, Abdurrahman Wahid, the then President of Indonesia, and a great Islamic scholar. He had paid a lot of attention to the Islamist threat and he has written that millions of Muslims were terrified into silence by the Islamists and must be freed from that terror. “What we are talking about is nothing less than a global struggle for the soul of Islam. People of goodwill from every faith and nation, he said, must “recognise the terrible danger that threatens humanity. We cannot afford to continue ‘business as usual’ in the face of this existential threat…we must join to confront the danger that lies before us.”
He was right when he wrote that in 2005. Since then the Islamist threat has become even more dangerous.
Protecting Muslim charities from terrorist penetration is a vital element of the Charity Commission’s role and we are glad to be able to play our part.
I hope I have helped reassure you that the Commission is an independent and impartial regulator. Our actions may not always be popular – indeed we do not seek popularity. But we take our role extremely seriously and we do our utmost to fulfil it responsibly and fairly on behalf of the public, which is after all who all charities seek to serve.