I've been trying to write this blog for about a month now, but for various excellent (and some less impressive) reasons I keep putting it off! Must try harder and keep up the posts.
Anyway. Those of you who follow my twitter ramblings or have read my previous blogs will know that I love to help charities and socially minded businesses. Before starting Bulldog in 2017, I spent my entire career in the not-for-profit sector, first central government, then large charities and most recently in a social enterprise. Believe me when I say that company accounts are EASY in comparison to charity ones.
The issue, if it can be considered an issue, is one of accountability and stewardship. Charities, the public sector and social businesses use money which is specifically intended to fulfil a specific purpose. The abiding principle is that this money should, therefore, be used to fulfil THIS SPECIFIC PURPOSE. Simple. Obvious. If I give you a fiver to buy a bulldog a toy, you darn well better spend that money on buying a bulldog a toy!
But this matching of action to intention is tricky to prove. Organisations have overheads. Skills cost money. Infrastucture - and by this I mean IT, software, equipment, vehicles, items required to actually DELIVER anything - costs money. Even innocent activities like fundraising can be really expensive, though theoretically you should get it back and more in the long run.
To make a lot of money to do your charitable thing, you need to spend a fair whack first. Charity reporting requires organisations to report their spending against the charitable things they are meant to be doing. The idea is that this ensures they can be held to account on their use of funds. We can see where the money goes, decide if we're happy with that and donate more (or withdraw. Vote with your feet.)
But charity accounts are often complicated - just look at the annual report and accounts of a large charity - and this makes it fairly easy to hide things in them that you don't want people to know. Or make everything look peachy when its actually dire. Over the past few years there have been various scandals, some of which proved terminal to the charities in question and others which are still playing out. All sorts of awful things have happened which I won't dwell on, but clearly there is a bit of an issue and jumping through all the right hoops does not guarantee a tidy, transparent and squeaky clean set of books.
I've been surprised at the vehemence of the resulting backlash amongst charitable organisations. Over the past months I've spoken to a number of charitable organisations who are fairly derisive of Charities and keen to emphasise the face that they are NOT charities - meaning, as they put it, that "they don't pay their staff loads of money, or short change their beneficiaries." It seems dreadfully sad that the overarching perception of "charities" here is negative. Keen to explore further and will report back.