An excellent recent article in Prospect (April issue, Yesterday’s News by Rasmus Kleis Neilsen) about the woeful status of journalism in the eyes of much of the UK public brought to my mind the old chestnut issue as to whether it would be a good idea for lots of charities to pay their trustees.
“Trust in news is down dramatically,” runs the article. “Much of the public says journalists care more about getting attention than reporting the facts, [and] are only in it for the money….On almost every measurable indicator, the social contract between much of the public and the news, as traditionally conceived, reported and distributed, is coming apart.” If you substitute the word “charities” for “journalists” and “the news”, you can see what might well happen if it were the norm to pay trustees.
The social contract between charities and the public
The current implicit social contract or bargain between the public and charities is that the public is glad to confer special status and financial privileges on charities, and on giving to charities, in return for understanding that charities are pursuing a charitable purpose for the public benefit and are in it for love, not for self-interest or financial reward.
It places strains on this contract when chief executives of charities are reported to be earning large salaries or even, among those with less understanding of what some charities are like, when we hear that charity staff are paid at all. But there is a robust defence within the framework of the current social contract so long as the trustees are unpaid. The trustees are the keepers of the flame and carry the ultimate responsibility.
In it for themselves, or for love?
But as soon as trustees receive payment for being trustees as the norm, the idea that charities are in it for love is fatally holed beneath the waterline. The public has shown itself to be merciless and often unfair in assuming that not only journalists but MPs, local councillors and many others are “in it for themselves”. Any hint of self-interest is seized on and magnified. There is a fundamental difference in this respect between reimbursing legitimate expenses and paying someone for being a trustee.
Three dodgy arguments for paying trustees
Three categories of argument are put forward for paying trustees, but each of them pales into insignificance, in my view, compared to the threat to the social contract between charities and the public.
There is the corporatist argument: unpaid trustees are thought to be too amateurish to be able to handle big budgets and fiduciary responsibilities competently. But being unpaid does not equate to amateurishness. Many trustees exercise great expertise and are of course assisted in larger charities by expert staff and professional advisers. It isn’t true that they can’t manage big responsibilities well.
Secondly, there is the diversity argument: only paying trustees will enable many poorer or hard-pressed members of society to offer their time. As a generalisation, I don’t believe this. Reimbursement of expenses, explicitly including transport and costs of childcare while attending charity board meetings, is permitted without any special authorisation, and in my view the lack of diversity is usually more to do with inadequate efforts to search effectively outside personal networks than with any lack of a financial incentive. It’s possible to improve diversity without paying anyone anything, just by recruiting openly and in diverse outlets, changing our mindsets about what’s really important in trusteeship (commitment and passion for the cause), mentioning reimbursement of care costs as well as other expenses, and changing the language we use to describe the role so it’s more accessible.
A study of housing associations I did a few years ago noted that they had been market leaders in paying their board members for corporatist and diversity reasons. In parallel, most individual housing associations had become extremely dependent on the state, did not campaign, mobilised very few volunteers, raised little or no money from the public, and in those respects were hard to recognise as independent voluntary organisations. Hardly a recommendation or model for most charities?
Thirdly, there is the argument about the autonomy of each charitable board: it should be in the best position to determine the interests of its own charity and pay trustees if it wants to. But if trustees decide to pay themselves, they are at once threatening to undermine that sense that they are in it for love. Moreover, this is an example of how, if what seems reasonable in one charity in isolation is replicated by many others, the overall effect on all charities is more important than the apparent advantages to the individual one. To ensure the long-term good of charities generally (and be the custodian of that social contract with the public) is what regulation by the Charity Commission is for.
In conclusion…
Individual charities can and do apply to the Charity Commission for specific authorisation to pay a trustee or trustees (or compensate for loss of earnings) for particular reasons. That is all well and good. But it should remain exceptional, and subject to specific authorisation. The bargain between the public and charities is much, much too important to be placed at serious risk by adding financial reward to the conventional reasons for becoming a trustee.
*The subject of whether it should be easier to pay trustees will be the subject of a plenary panel debate at Trustee Exchange on 29 April, chaired by G&L columnist Penny Wilson. Book your (team) tickets here.
