Most charities’ work is – ostensibly – entirely designed to help beneficiaries. So it’s peculiar that, despite all the talk about accountability, so few charities make it easy for those stakeholders to talk to them. Some listening processes are difficult, but it would be easy to invite all parties to an annual general meeting.
A Meeting of the People, For the People
In the UK, publicly listed companies must hold a meeting at least annually that any shareholder can attend. Often press and industry analysts attend too. The directors account for their decisions and performance, and any shareholder can ask a question. Thus, the company accounts to the people whose money it is deploying and whose interests, therefore, it is ostensibly serving.
Why not charities too?
Charities also must have ‘annual general meetings’ but these aren’t general at all: typically one of the normal, closed board meetings is designated as the AGM, and nobody else knows it’s happening or is invited to attend.
This is not good enough. Charities’ AGMs should be public for two strong reasons. First is for accountability to the people whose interests the charity serves; that is, to its constituents or users. Most obviously, that means the people it serves now. For example, if I were served badly by, say, a charity called “XYZ Foundation”, then the charity should account for that. More subtly, charities should also be accountable to those stakeholders the charity isn’t serving but should be. I’m making this up for purposes of illustration, but if for instance cancer charities collectively underserve women, or people in the North West, then those people should be able to come to the AGMs and request more support.
And second, charities should be more accountable publicly because a good chunk of the money which they deploy is the taxpayer’s – coming from tax relief on donations, reduced rates, zero corporation tax, and other such policies. Yet there is currently no mechanism at all for the taxpayer to hold them to account. Let’s say that again: the taxpayer hands over billions of pounds with no assurance at all on quality or value for money, other than the famously light regulation by the Charity Commission.
So I propose that charities be made to have AGMs open to anybody, as a condition of receiving taxpayers’ money.
At these meetings, charities should explain their goals, activities, and how those activities are meant to achieve the goals. They should explain their performance and achievements of the past 12-24 months, changes in the senior team, and plans for the next 12-24 months. This is nothing that a competent organisation couldn’t do at a week’s notice.
They should be required to publicise the date and time in advance, and according to clear rules – just as there are rules for publicising public showings of art which belongs to the nation but which lives in private property.
The UK has 180,000 charities. For ease, I’d start with the top 450 charities, which account for nearly half the sector’s income anyway.
Yes, there will be costs to hosting more public AGMs. But shutting out recipients, stakeholders and involuntary funders isn’t acceptable if you wish to be taken seriously as an organisation.
Caroline Fiennes is Director of Giving Evidence, a consultancy and campaign promoting giving based on sound evidence. She is author of It Ain’t What You Give, It’s The Way That You Give It, an acclaimed guide for any donor on giving well.