The regulator has come under fire within the sector for being heavy-handed over its treatment of the Joseph Rowntree Charitable Trust, but Andrew Hind says much of the criticism is unfounded.

There have been a lot of concerns expressed about what some in the sector see as the Commission’s excessively interventionist role in the case of the Joseph Rowntree Charitable Trust’s (JRCT) funding of the advocacy group Cage.  

I have been critical of many of the Charity Commission’s actions of late. In this case, though, my sympathy is with them as I think much - but not all - of the criticism is misplaced.

On 6 March, JRCT issued a statement saying it had been “put under intense regulatory pressure to rule out any future funding of Cage”, and almost 200 civil society leaders wrote to The Times five days later “affirming the right of foundations to freely pursue their objectives within the law”.

Their concern is that the tougher compliance role now being pursued by the Commission may be leading the regulator to tell foundation trustees what they can and can’t fund – thus compromising the ability of boards to make their own independent decisions and – over time – discouraging grantmakers from supporting unpopular or controversial causes in pursuit of legitimate charitable objectives.

How events unfolded

It’s important to be clear about the facts before drawing any conclusions.  Here’s what happened.
 

• JRCT made grants to Cage, which is not a charity, of £305,000 between 2007 and 2014 “to promote and protect human rights”;
• The Commission opened an operational compliance case into this funding relationship in December 2013;
• After the Washington Post named ‘Jihadi John’ as being Briton Mohammed Emwazi, the Cage research director Asim Qureshi gave a press conference on 26 February in which he was widely reported as having said that Cage had been in regular contact with Emwazi in the past, that he was a “beautiful young man”, and that the British security forces had had a role in his radicalisation. Qureshi was reluctant to condemn Emwazi’s subsequent actions.
• The next day JRCT issued a statement saying: “The Trust does not necessarily agree with every action or statement of any group that we have funded. We believe that Cage is asking legitimate questions about security service contact with those who have gone on to commit high-profile and horrific acts of violence, but this does not in any way absolve any such individual from responsibility for such criminal acts.”  No comment was made ruling out any future funding of Cage.
• On 6 March the Commission issued its own statement saying that it had taken “robust action” on Monday 2 March requiring JRCT and the Roddick Foundation (another funder of Cage) to give “unequivocal assurances that they have ceased funding Cage and had no intention of doing so in the future”. The regulator confirmed that this assurance was given on 5 March.
• JRCT responded, saying: “In the past week we have been put under intense regulatory pressure to rule out any future funding of Cage regardless of any future changing circumstances. To protect the interests of all our grantees and the other work of the Trust, we have decided to publicly confirm that we will not fund Cage either now or in the future.”

What should they have done?

At the heart of this case are three fundamental principles:  trustees have a legal obligation to ensure that all their charitable funds are used for exclusively charitable purposes; trustees have a duty to make decisions independently, in the best interests of their charity and its beneficiaries; and the Commission has a statutory duty (among others) to promote public trust and confidence in charity.  

What are we to make of the reasons why JRCT and the Commission have apparently found it so difficult to find common ground on this matter?

Well, JRCT has a long and distinguished record of support for civil society causes, but in my opinion its trustees failed to respond decisively, and in a way which would command public trust, to Cage’s comments on 26 February.

In light of the exceptionally high profile of these issues – and the public knowledge that JRCT had been a funder of Cage in the past - I believe JRCT’s trustees should have immediately put out a statement unreservedly condemning Qureshi’s remarks, saying that there could be no mitigation whatsoever for the despicable acts which Mohammed Emwazi has perpetrated, and confirming that until the leadership of Cage changed they would no longer be funding it.

Instead, JRCT issued what in my view was a very weak statement on 27 February which failed unequivocally to condemn Qureshi’s remarks, and did nothing to dissociate JRCT from Cage in the future, for as long as the organisation’s existing leadership remains in place.
 
In my view, therefore, the Commission was compelled to engage with the issue.  JRCT’s failure to react appropriately to the remarks of Qureshi was likely to damage public trust in the work of charities (and charitable foundations in particular), and JRCT could not be sure that in the current circumstances any future grants to Cage would be used only for charitable purposes.
 
The Commission was left with no choice but to request that JRCT took more robust action, but it appears then to have been far too heavy-handed in insisting that JRCT rule out future funding for Cage irrespective of any changing circumstances which might arise some time into the future.

In the full glare of media scrutiny it is always challenging to quickly make the right judgements. However, for my money, both parties have made mistakes.

What we need now is for everyone to take a deep breath and recommit to the fundamental principles which have stood the sector in such good stead down the years.

JRCT – and all charitable foundations - should keep funding unpopular causes, but they must focus hard on how their money is going to be used by grantees, and ensure that this is only for charitable purposes. Like all other charities, foundations are ultimately accountable to the public for their actions.

For its part, the Commission should continue to ensure that the public have confidence in charity, but it must be careful not to undermine the ability of foundation trustees to decide independently what they wish to fund in the future, in line with charity law.

Andrew Hind is the editor of Charity Finance and was the chief executive of the Charity Commission between 2004 and 2010.