1 Oct 2014
The importance of the ethos of the voluntary sector, and the perceived excessive regulation of charities, were some of the points raised at a debate last night on the payment of trustees.
The debate, organised by New Philanthropy Capital, was entitled 'Ways of improving charity governance: Would paying trustees help?', and had four speakers – Debra Allock Tyler, chief executive of the Directory of Social Change; Tony Manwaring, chief executive, Tomorrow’s Company; Alex Massey, policy office at Acevo; and Kevin Carey, chair of RNIB.
The current Charities Act review is examining payment of trustees. Currently charities can only pay trustees if the Charity Commission gives permission, or if it is in their governing documents.
All the speakers agreed to some degree with arguments made around the importance of maintaining the “ethos of the voluntary sector”, and that the charity sector is heavily regulated.
But there was strong disagreement on other issues.
Manwaring: Competition for trustees
Tony Manwaring, chief executive of Tomorrow’s Company, a research charity for business, said he could see both sides of the arguments made for and against paying trustees.
He said he was “swayed very loudly” by the argument that if trustee payment started to become more normalised charities would have to start competing for trustees.
He also added that the increasing mix and match of organisational forms such as social enterprise would start to blur boundaries.
Dan Corry, chief executive of New Philanthropy Capital, who chaired the debate, asked Manwaring whether charities who were beginning to engage in the social investment world would increasingly want to pay their trustees.
Manwaring said the charity Action for Children, which is very active in public service delivery, was able to get a good quality of trusteeship leadership on a voluntary basis.
Massey: Charities 'need freedom to decide'
Alex Massey, policy officer at Acevo, said if a charity decided paying trustees was the best use of its resources, it should be free to pursue it.
“It’s rare to have payment of trustees in governing documents. And the Charity Commission does it exceptionally,” said Massey.
“Some charities could benefit from more freedom in governance arrangements if it fits the circumstances, including the payment of trustees.”
Massey said charities might consider paying trustees to attract a wider pool. “It could be a way to make trusteeship more attractive to beneficiaries, for example, the financially disadvantaged.”
Massey also said that there had been a significant growth in public service delivery in the last ten to 20 years: “There’s been more than £8bn in the last decade and social enterprise is on the rise.”
Corry asked Massey whether other charities would feel they had to pay their trustees too.
Massey said it was important that the sector had a voluntary ethos, but he added that not very long ago most charities did not have staff: “Now a fifth do,” he said. “We are a diverse sector.”
Allcock Tyler: No evidence that pay boosts performance
Debra Allock Tyler, chief executive of the Director of Social Change argued that there was no evidence that payment improves performance.
She referred specifically to bankers and footballers. “There is no evidence, whatsoever, at all, anywhere, to say that when you are paid you perform better – in any sector.”
She added: “Do you want someone who came to your charity because pay was associated or because they care about the cause?
“If you need expertise pay a consultant instead.”
She also complained that the current chair of Nuffield Health, who is paid £20,000 a year for his role, is a multi-millionaire:
“How the hell can you talk to volunteers and donors and say some of it is going to multi-millionaires,” she asked.
“Look at charities who pay trustees – how many are BME or disabled?” she added.
She also said she felt it was dangerous if decisions about services came from someone who might lose their salary.
Allcock said that trustee payment should not be allowed, full stop: “Lord Hodgson should make it against the law clearly,” she said.
Carey: Charities 'more regulated than banks'
He said he “didn’t get” the Charity Commission.
A member of the audience suggested charities should give up their tax breaks if they wanted to pay trustees. Carey argued that other sectors such as banks and businesses got certain tax breaks.
“I believe in disclosure down to the last penny,” he said. “Charities are more heavily regulated than banks – they should be allowed to run business for the end-user. Let’s have a situation where trustees do what the law says."
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