That is what KET does. How it does it, how it funds its work and how it ensures that its services to beneficiaries make the best use of money [public funds, private donations and charitable revenue] is being scrutinized by the Board as part of a risk and governance review. Like all other organisations KET needs to organise what it does across people, technology and money, somehow bringing these variables together to achieve its mission. KET is building a risk management framework encompassing the three variables to ensure its longer-term sustainability.
Some risks are necessary for growth and innovation; simply avoiding risk is not the right answer. The Board of Trustees, led by the Chair has a role in determining the organisations risk culture. The wave of revelations resulting from Kids Company downfall, highlight their Board’s lack of understanding about its risk culture. This was certainly instrumental in shaping its collapse. Reports emerging from the recent Public Administration and Constitutional Affairs Committee hearings into Kids Company, indicate a pervasive culture of active resistance to any assessment into the quality and outcomes of their work or the financial management of it’s 42million pounds worth of public funding. The Board seems to have accepted senior managements behaviour of keeping risk management oversight at arms length. Totally inappropriate given the high-risk culture that prevailed.
Most Trustees are aware they have Fiduciary responsibilities. However ticking the ‘we are generating enough funds to cover our costs” box on the balance sheet is only part of the governance story. The Board of Trustees must also ensure that the work of the charity is subject to assessment by someone proficient in analysing the effectiveness of its services. Having the annual accounts signed off by auditors should not be the trigger for Trustees to sleep peacefully in their beds that night. Trustees must also ensure there is clear linkage between expenditure and skillfully assessed needs that the charity is addressing. As a Trustee I must be able to answer substantive questions about the value of the KET’s charitable work. Outcomes are what drive sustainability.
Forty years ago the Wolfeden committee on voluntary organisations brought to light the need to match-up charitable giving and services with needs or issues that require to be met. It’s disappointing in 2015 to read about how Kids Company operated more on political favours, PR and charismatic leadership rather than the quality and effectiveness of its service outcomes.
Following the Kids Company debacle, the government is now trying hard to come up with policy suggestions to prevent any future such disasters. Charities should not wait for government policy makers with egg all over their faces to change things on our behalf; this is unlikely to create a better society. We should be doing it for ourselves by influencing the development of sensible risk management frameworks appropriately aligned to a transparent risk culture.
An obvious lesson for the sector is that Board meetings and reports should effectively address the important questions that Trustees need answers about. Impact measurements that the sector is currently compelled to spend resources on often fail to answer the right questions. Government has the mandate but battles with the insight necessary to support needed changes to this process. The charity sector needs to get innovative about how it delivers, improves and measures outcomes across the spectrums of different missions for its work.
Policy in respect to charity income generation needs reform but in our information age a prerequisite must be to gather good information that will inform good decisions. Valid case studies and comparative data are essential to understand what creates superior economic and social value resulting from the work of charities. It would also be very useful to know what type of charity work solves particular types of social problems best. The government could help by facilitating the setting up of systems and platforms to generate and share this information across the sector. It can also help with the sharing of best practice and creating mechanisms to smooth the way for charities to create economies of scale through effective cross sector partnerships and philanthropic investment
Kent Enterprise Trust Trustee