Sarah Atkinson outlines how the Charity Commission enables innovation at charities. This piece is taken from a collection of essays, Insights on Innovation, which will be published by NPC and ActionAid tomorrow.
As charity regulator, the Commission maintains a delicate balance. On the one hand, our duty is to protect what is unique and special about charities – they need to keep their distinctiveness to maintain public trust. On the other, we know that innovation, pushing boundaries, finding creative solutions to problems and taking risks has always been central to charitable endeavour. Indeed, we have a statutory duty to have regard to facilitating innovation by charities.
What does upholding that balance look like in practice? First, producing excellent legal guidance for trustees, neither unnecessarily restrictive nor unduly prescriptive. Our guidance should ensure trustees can take bold decisions within their discretion, accept there are decisions they cannot make, and understand the difference.
A good example is our guidance on decision making, making clear that trustees can make bold, even radical decisions, if they are mindful of their duties and responsibilities in reaching a decision. For example the need to act only in the charity’s best interests, inform themselves, manage conflicts of interest and disregard irrelevant factors.
Our guidance says we do not expect charities to play safe all the time, but we expect proper consideration of the risks attached to trustees’ decisions. For example, in the words of our chief executive Paula Sussex, “it’s okay to call it a day”. Sometimes the most innovative decision for trustees is to wind their charity up – perhaps having fulfilled its objects, or been superseded by a more effective charity in a similar field.
We also need balance in assessing concerns about charities. Even well run charities are not immune from failure. Not all projects are successful, not all investments yield return. Where trustees can demonstrate that they acted in the best interests of the charity and fulfilled their legal duties when making important decisions, we are unlikely to take regulatory action. But if trustees can’t show they’ve fulfilled their legal duties and their charity is harmed as a result, we may need to be involved.
Sometimes we play a more direct role in helping charities to develop and innovate, for example providing legal consent to changes. We recently acted quickly in amending the purposes of Band Aid to include the relief of sickness, allowing them to raise millions to help those affected by Ebola in West Africa.
The Commission can never ‘do innovation’ on behalf of charities. But by balancing compliance with charity law and enabling innovation, we can help ensure charities continue to change lives for the better.
Sarah Atkinson is director of policy and communications at the Charity Commission
