The Daily Mail went into overdrive. ‘Shame of the charities that prey on the kind-hearted and drove Olive to her death’, read a headline on 20 May. Chris Grayling MP, then leader of the House of Commons, spoke of “wholly inappropriate behaviour” and promised legislation. In July, under the headline ‘Shamed: charity cold call sharks’, the Mail’s reporters brought to light the callous attitudes to be found in some telephone fundraising agencies that worked for big charities, and gave details of the industrial-scale use of direct mail. The prevailing sense of anger prompted the government to set up a review, and it was perhaps fortunate for charities that this was led by an insider – Sir Stuart Etherington, then chief executive of the NCVO.
The review concluded that ‘the balance between giving and asking has sometimes gone awry’ and recommended replacing the Fundraising Standards Board with a new, self-regulatory body with enhanced powers, particularly on the use of personal data.1 Despite political pressure for a statutory system, the government agreed to set up the Fundraising Regulator, financed by a levy on charities. Parliament also passed the Charities (Protection and Social Investment) Act 2016, which required charities to set tighter controls on the fundraising companies they employed and to explain their fundraising policies in their annual reports. This new fundraising environment was buttressed by closer scrutiny by the Information Commissioner and prefigured in many respects the European Union’s (EU) General Data Protection Regulation of 2018, which gives citizens greater control of their personal data.
The whole episode forced a fundamental reassessment by charities of their fundraising practices and left many professional fundraisers, who had enjoyed considerable freedom for years, in a state of shock and confusion. It also caused tensions between big and small charities. The small mental health charity Sane was sure in 2016 that its income was suffering because of the unpopular fundraising methods of larger charities: “We’re getting fewer and fewer donations because of the way they’ve behaved,” its chief executive, Marjorie Wallace, said.2 The small environmental charity Friends of the Lake District was not experiencing a fall in income, but its chief executive, Douglas Chalmers, was so concerned that he wrote to all its members in the same year to dissociate it from the ‘inappropriate fundraising methods’ of some big charities. ‘The stories in the press represent a huge betrayal of trust by a minority of charities towards their donors,’ he wrote. ‘If I was a donor, I would be wondering if any charity I supported was behaving properly.’
The long-term effects of tighter regulation on the collective income of charities remain to be seen, but the outlook in 2019 was not encouraging. That year’s UK Giving survey by the Charities Aid Foundation (CAF), based on 12,000 interviews with members of the public, found that ‘the key measures of giving are on a downward path’.3 Similarly, the data company Charity Financials found in its 2019 Income Spotlight Report, based on income figures in charity accounts rather than on interviews, that growth in fundraised income at the top 100 fundraising charities in the UK had fallen to 0.5% in 2017/18, compared to 2.8% the year before and between 4.5% and 6% between 2013 and 2016.4 ‘The challenge looming over the future,’ it concluded, ‘is to break through the apparent plateau in income growth, to regenerate public trust and the belief that giving to charities is a special, ethical and effective way of helping to address the social challenges which private and government sectors are not.’ Any effect of tighter regulation on fundraising was, of course, compounded significantly by the income shortfall resulting from the coronavirus pandemic.
Large senior salaries
Before the Olive Cooke case and the resulting reforms of fundraising, the media was already focusing on the pay of charity chief executives. More than 90% of registered charities have no paid staff and fewer than 1% of them employ anyone earning £60,000 or more; many of the 909,000 people employed in the sector in June 2019 (about 3% of the UK workforce) work in low-paid jobs such as assistants in care homes; and, generally speaking, charities pay their staff less than the commercial sector.5 But in 2013 The Daily Telegraph, which had been consistently sceptical about the government’s commitment at the time to devoting 0.7% of the country’s national income to overseas aid, published the fact that 30 executives in the 14 major charities that participate in the Disasters Emergency Committee – and dispense significant public funds when earthquakes, famines and other disasters happen around the world – were being paid more than £100,000 a year.6 The story included a comment from the then chair of the Charity Commission, William Shawcross, about ‘disproportionate salaries’. Senior charity pay began to be a matter for comment and dispute. The NCVO initiated its own inquiry which urged charities to publish their chief executives’ pay within two clicks of the home page of their websites and explain how it is benchmarked against comparable jobs in other sectors. Some charities have followed this approach, but by 2020 it was not yet standard practice.
The payment of such salaries out of funds raised partly from the public on the grounds that they will be used for good causes in the UK or abroad clearly causes an unease that is not necessarily mitigated by the fact that the charities in question pay their senior staff significantly less than private or public sector organisations of similar size: Oxfam, for example, paid its chief executive £140,000 in 2018, well below the going rate for a private sector company with a similar turnover of more than £400 million. There tends to be less criticism of charities that do not rely on public fundraising but either earn their income from selling services or benefit from big endowments. Surveys show that the largest salaries are concentrated in the big healthcare foundations or providers such as Wellcome Trust, which paid the top member of its investment team £4.6 million in 2019, and the London Clinic (where the top salary was £1.27 million in 2018).7 These two have not been the subject of hostile national media attention.
But some other charities that do not rely on public fundraising have attracted criticism over senior pay. The Consumers’ Association, the charity that runs the Which? publications that earn the bulk of its income, came under fire from its own members in 2016 for a bonus scheme that meant its chief executive at the time received £462,000 in 2017; and in 2019 the birth control charity Marie Stopes International, which had received only £4 million of its £296 million income in 2018 from donations, was asked by the Charity Commission, following press attention from The Daily Mail and The Sun on Sunday, to explain why its chief executive was paid a package in 2018 of £434,500, half of it as a bonus.8 (The charity was renamed MSI Reproductive Choices in 2020.)
Other scandals
As well as outcries about fundraising and high pay, there were also high-profile instances of financial or managerial incompetence, inadequate supervision by trustees or the abuse of charitable status. One of the most disturbing stories broke in 2012 about the Cup Trust, a cynical, sophisticated tax avoidance scheme set up as a charity to take advantage of Gift Aid, under which donations to charity are augmented by the amount of basic rate tax the donor has paid on the sum donated. Three years later, there was extensive media coverage of the collapse of Kids Company, a charity with a ground-breaking approach to helping marginalised children and teenagers, set up and led by the persuasive Camila Batmanghelidjh; she charmed David Cameron when he was prime minister and successfully solicited money from government departments. The running of the charity was strongly criticised by a committee of MPs in 2016,9 but early in 2021 Mrs Justice Falk in the High Court refused an application by the Official Receiver to disqualify the trustees as company directors, calling them ‘a group of highly impressive and dedicated individuals’. She added that it was ‘more likely than not’ that a planned restructuring of the charity would have succeeded were it not for a police investigation into allegations of sexual assault at the charity, which proved unfounded but prompted the collapse.10 Media coverage