Philanthropy Impact

Inspiring philanthropy and social investment across borders, sectors and causes

Raising Governance Standards in the Charity Sector

Philanthropy Impact's Chairman writes a blog on the latest Shaftesbury Dinner on the theme Governance: Responsibilities and Pitfalls.

Raising Governance Standards in the Charity Sector

Event report
Introduction
Grant Gordon, Philanthropy Impact Chairman, posted a blog following the 4th Shaftesbury Dinner on the theme Governance: Responsibilities and Pitfalls.
 
The Dinner was kindly hosted by  JP Morgan Private Bank.  Guests included  Lucy Blythe, James Carleton, Sheryl Fofaria, Perdita Fraser, David Goldberg, Grant Gordon, Larissa Joy, Paul Knox, Clive Mackintosh, John Pepin, and Amanda Pullinger.
 
Philanthropy Impact actively engages with professional advisers - in law, tax, accounting, banking and family offices - as they influence and encourage individuals and families of wealth to direct a portion of their wealth to those charitable causes that will achieve both the greatest impact and the greatest personal satisfaction.
 
The Philanthropy Impact Shaftesbury Dinner series is named in memory of Anthony Ashley Cooper, 7th Earl of Shaftesbury (1801 – 1885) who was one of the forefathers of modern philanthropy. 
 
The aim of the Philanthropy Impact Shaftesbury Dinners is to:
Create and disseminate ideas in relation to philanthropy 
Spread knowledge and information about the work of Philanthropy Impact – to increase philanthropy and social investment across borders, sectors and causes.
 
The Blog
At Philanthropy Impact’s latest Shaftesbury Dinner a group of experienced philanthropists and non-profit leaders debated the state of governance in the charity sector. Recent headlines about failing charities, unacceptable fundraising practices, and other bad headlines are aligning in a way that is undermining trust in the sector. But when bad press threatens to outweigh the amazing amount of good work that our nation’s 165,000 charities are doing questions should be asked. The buck stops with trustees and our eminent guests pinpointed out some key issues that boards are already or should be addressing.

First, on many agendas is ensuring that charities are attracting and retaining top talent to run their organisations. This goes hand in hand with regularly reviewing the performance of non-profit leaders to make sure that their skills match the present and future needs of the organisation. But also monitoring that they are remunerated at the appropriate (and possibly higher) level to retain the best talent.

The second mention in terms of good governance is the need for boards to examine their own effectiveness. Trustee board appraisals are a tool not practiced often enough in charities; regular self-appraisal by board members is a helpful way to start, but it is also useful to supplement this process with 360degree feedback.

And third charities are not consistent when it comes to implementing good governance and there is a big opportunity to raise the overall standards of trustee boards. The group felt that an idea that could help to raise the game would be to introduce a Governance Rating system for charities. An externally monitored rating scheme for the charity sector could lead to improvements in the performance of sector organisations by benchmarking charities against an agreed set of governance standards. All registered charities, or at least the larger organisations, would report annually against the set of agreed governance KPIs. The sector’s regulatory body, the Charity Commission, while under-resourced at present, could play a pro-active role in policing the sector’s governance standards, leading ultimately to making philanthropy more effective.