5 charity governance gaffes

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The Kiltwalk's entire board was sacked when the Hunter Foundation stepped in to save the beleaguered fundraiser

It's trustees week, so TFN looks back on five recent occasions when charity trustees really messed up and what can be learned from their mistakes

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2nd November 2015 by Paul Cardwell 2 Comments

1. Look after your patrons and they will look after you

1. Look after your patrons and they will look after you

The gaffe

In 2009, the Multiple Sclerosis Society Scotland made a corker of a governance mistake when it lost one of the world’s most famous living authors, JK Rowling, as a patron. Rowling, who had supported the charity for almost a decade at that point, said a “longstanding and escalating” conflict between the Scottish office of the charity and London management had damaged morale and caused staff to quit. Rowling now funds MS research directly through the Anne Rowling Regenerative Neurology Clinic, which she donated £10m to create.

The lesson
If you are lucky enough to have one of the world’s richest and most famous people supporting your cause, then you should go out of your way to keep them! Celebrities can be difficult and unpredictable, but keeping in dialogue with them, listening to their concerns and responding to them reasonably is key. It could earn you £10m!

2. Appoint people with appropriate skills and confidence

2. Appoint people with appropriate skills and confidence

The gaffe

It’s often said that when you lose trust you never get it back. In February this year the children’s charity fundraiser The Kiltwalk was struck by a number of charities withdrawing as official partners. There were calls for an OSCR investigation in to how it was being run after it was discovered that from a 2103 income of £1.6 million only £776,406 was donated to good causes. Chief executive Carey McEvoy later quit following further questions over the spending on foreign trips. In June this year it was revealed the Hunter Foundation had taken over the running of the charity and felt the need to replace its entire board to rebuild The Kiltwalk’s shattered reputation.

The lesson

Hopefully now that the Hunter Foundation has taken over, The Kiltwalk’s problems are tucked away in a discarded sporran. The whole sorry saga could have been avoided though if the charity had a stronger board in the first place. It is important for a board of trustees to be confident enough to ask the right questions of a charity’s chief executive and have the right skills to offer advice. Trustees should bring specific skills to a board and have knowledge of how charities operate otherwise they are simply deadwood. In fact, they could be doing more harm than good.

3. Check what those associated with your charity do in their spare time

3. Check what those associated with your charity do in their spare time

The gaffe

In August 2014 Falkirk based charity Open Secret stood by its chairman Bruce Hotchkies when it was revealed he was the front man of a shock rock band that sings explicit songs about sex and using physical violence against women. The charity, which supports child abuse victims, described the lyrics of Thunderfuck and the Deadly Romantics as “tongue in cheek” and added that whatever Hotchkies did in his own time in no way affected his work. However just a few days later Hotchkies resigned from his post.

The lesson

Always check the background of anyone who is going to be associated with your charity should it be a trustee, an ambassador or a patron so you can be sure they don’t conflict with your charity’s message or values. And we’re not just talking about whether they have had any brushes with the law, some animal rights charities, for example, ask that people associated with the organisation stick to a vegan or a vegetarian lifestyle. They wouldn’t want someone representing them to be photographed tucking in to a steak after all. If, after carrying out due diligence, it turns out that you have missed something (it does happen) – it’s better to hold your hands up and acknowledge the mistake rather than try to cover it up or talk your way out.

4.Don't allow other trustees to be paid to undertake work

4.Don't allow other trustees to be paid to undertake work

The gaffe

Angelina Jolie quit the board of Dumfries based landmine charity Halo Trust in May 2014 citing humanitarian aid commitments. However it was alleged earlier this year that the real reason she quit the charity made famous by Princess Diana, was because two of its trustees were paid £120,000 to undertake a restructuring review.

The lesson

A charity trusteeship is a voluntary role. Never pay trustees – or their family or friends – to carry out work for your charity. The move creates a massive conflict of interest. If there is genuinely nobody better to do the job then first ask them to step down as a trustee before hiring them as a member of staff.

5. Make sure your charity is kept separate from any related business

5. Make sure your charity is kept separate from any related business

The gaffe

OSCR strongly criticised the trustees of the Rangers Charity Foundation after money raised at a fundraising match went to the football club and not the charity. The game between Rangers Legends and AC Milan Glorie took place in March 2012 shortly after the club went into administration. An OSCR investigation found that one trustee made a decision to transfer the control of match income to the administrators believing the game may not go ahead otherwise. The decision cut the charity’s profit share by £191,430. The regulator said a decision of that magnitude should not have been made by one trustee even though it accepted the move was made in good faith given the risk of the complete cancellation of the fundraising event altogether.

The lesson

At the time of the incident the Rangers Charity Foundation only had three trustees and each were employed or held senior positions at the club. OSCR described this as “an inherent conflict of interest” and we have to agree. Similar to lesson number four about not paying trustees, it is also important not to appoint trustees who are linked to any related businesses. It is also good practice to have a board of more than three people, who represent a range of skills and backgrounds.

Want to know more?

OSCR guidance for trustees highlights the responsibilities of individual members of Scottish charity boards.

The Scottish Council for Voluntary Organisations also has a Guide to Good Governance on its website.

5th November 2015 by Anna Pinnell

Oh dear, most of these aren't really "governance gaffes" at all. Perhaps this is just a convenient umbrella term for an article that is simply pursuing the current Trustee-bashing theme. And just so you are aware, charities can pay Trustees in certain circumstances, so this point is just one of many where your lack of understanding of governance just shines through!

6th November 2015 by William Douglas

Was it Multiple Sclerosis Society Scotland that made a corker of a governance mistake - or was it the London HQ? My recollection is that TfN supported the position of MSSS against that of the UK charity. It would be interesting to know if the 2009 restructuring paid off.