People and culture

18 May 2017, 09:45

CFG Chair Speech to Annual Conference 2017

CFG Chair, Ian Theodoreson Speech to the CFG Annual Conference 2017 CHECK AGAINST DELIVERY CFG celebrates its 30th birthday this year. For me personally, 2017 marks my own 30th ...

CFG Chair, Ian Theodoreson Speech to the CFG Annual Conference 2017

CHECK AGAINST DELIVERY CFG celebrates its 30th birthday this year. For me personally, 2017 marks my own 30th anniversary of working in the charity sector and to some degree CFG's history has mirrored my own. As I come to the end of my term of office in September, l hope you will allow me to reflect a bit on that journey and to consider if there are lessons to be learned for the sector going forward.

An historical perspective

In 1987 the charity sector was an odd place for a young and ambitious accountant to arrive. In those days ‘Charity’ was something you got involved in at the end of your career when you wanted to 'give something back' (the career equivalent of carbon offset I guess). It was certainly not a place to build a career in. It was a land, at least on the finance side, heavily populated by the amateur and the superannuated. Yes OK, I am exaggerating, but not by much, and I ought to recognise here some of the father figures of charity accounting from those days who did know what they were talking about - Hugh Belshaw from Oxfam, Keith Manley at Barnardo’s and my predecessor at Save the Children, Tim Phipps. In terms of regulation it was virgin territory too. The first SORP was published in May 1988 by the Accounting Standards Committee, but it was a fairly basic document, little recognised within the sector, and was considered more as best practice rather than rules to be followed. Its use was not mandatory. There was no modern Charity Act to refer to and the Charity Commission had just been castigated by a National Audit Office report as being under-resourced and poorly equipped to act as an effective regulator - I believe the staff of the Commission boasted only two qualified accountants at the time and there was no routine oversight by the Commission of charity accounts. In terms of financial management it was indeed the Wild West. [In terms of funding of course we find ourselves back in a situation where the Charity Commissioner is once again under resourced for the work it is expected to do and no, I do not believe that shortfall should be met by charging charities for their own regulation. The charity sector, which is larger than the UK’s agricultural sector for instance, is too important for the government not to regulate properly and we have to have a system, funded by Government that the public has confidence in.] But back to 1987. This lack of professionalism I talked about was not just confined to finance - governance was poorly understood too. When the 1990 Charities Act was passed I was among a group of people who ran sessions up and down the country training people in the impact of the Act on their organisations. We would start the session by asking the 100 or so delegates, comprising largely professional people, to indicate if they were trustees, and around a quarter would raise their hands. We then asked the same question at the end of the session having spoken about the roles and responsibilities placed on the shoulders of trustees by the Act, and this time around 90% would raise their hands. People who should have known better had no notion of the responsibilities they carried, no notion that they were trustees even – and they were the ones who had bothered to sign up for the training!

Along came CFG

And it was into this chaotic scene that CFG was born. A group of finance directors, most of whom were newly arrived in the sector, decided that we needed to establish a support network to help make sense of the world we had entered and, in the absence of help externally, to develop best practice for ourselves. As time went on people began to recognise that CFG knew what it was talking about. Charity practitioners had started to own their own space and bit by bit Government and regulators began to seek our input too. CFG realised that for charities to be effective, charities had to bring finance out from the back room and put the finance voice centre stage in their thinking and planning and for leadership teams and trustees in general to understand how to use finance effectively. Charity accountants for their part had to learn to live in the sunlight, to put on their sunglasses as it were and learn to be leaders in their own right. If the journey so far has been about raising our own skills and being more accountable to the public, going forward it is about stewarding our resources and getting the most out of them. Now that we have the skills to do our work effectively, we have to put our principles into action. This is why CFG is focusing on topics such as IT, countering fraud, pensions and our policy work on freeing up resources so that charities are able to have a bigger impact.

The Spirit of Charity

But let me take you back to 1987. It might have been the Wild West but there was something special about working in the sector in those days. There was a conviction that we could change the world for good and there was a confidence and boldness in the way we went about our task. We were not afraid to challenge the status quo and to 'speak truth unto power'. Charities were generally seen as a force for good and a voice to challenge the establishment. Roll on 30 years and so much of this has been lost. Somewhere along the road we stopped being the voice that challenged the establishment and instead we BECAME the establishment! I am speaking in general terms of course and in every generation there have been outstanding examples, particularly at the smaller end of the charity spectrum, that disprove the rule – organisations such as Child Poverty Action Group and Shelter come to mind as examples from the 1990s of effective campaigners operating on very modest budgets. However I believe the change started when charities in general began to chase contracts to provide services previously provided by Local Authorities and statutory bodies. The mantra was that charities were well placed to share their expertise and could be more cost effective than statutory bodies – they could also use their voluntary funds to provide that added value for beneficiaries that statutory agencies were not able to provide. But to be honest I think we were fooling ourselves. What we hadn't reckoned with was the price that would be demanded of us for that increased activity. Increasingly charities were being squeezed into a sausage machine production line and bit by bit lost the freedom to operate as they saw best, especially as funding cuts started to bite. In particular the voice of beneficiaries has become lost in the face of the louder voice of those who pay the bills. (If you want to understand more about what that looks like I can recommend you read the latest report by the think tank Civil Exchange on the ‘Independence of the Voluntary Sector 2017’). Am I saying that charities shouldn’t take on contracts? Of course not, that would be absurd, neither am I suggesting that charities haven’t done remarkable work in delivering statutory services to beneficiaries. What I am saying though is that in pursuing growth and reach through contracts we have actually dulled our voice and have lost our distinct message. We no longer stand out as a sector that challenges the status quo and the public is consequently less clear about what we stand for, which should be a cause of concern for everyone who cares about the charity sector. In contrast I am pleased that CFG has avoided the chase for statutory income and as a consequence has guarded its independence, which we have been able to do because our income comes from our members, supporters and events. It means that we don’t have to curry favour with government but can choose instead to speak out on issues that we believe are important to our members. We have been told by some umbrella bodies that we ought to be LESS strident – actually our executive and our trustees believe that we, and the sector in general, need to be MORE strident in the face of the attacks on the sector and in particular to challenge the increase in stealth taxes that the sector faces such as Irrecoverable VAT, Business Rates, Insurance Premium Tax and the Apprenticeship Levy. Unlike businesses, charities do not exist to generate profits to line the pockets of our owners – we generate income to turn it into services for our beneficiaries, which is a distinction that many newspapers struggle to come to terms with.

Closing Remarks

It has been a real privilege to serve as your chair for the past six years and I am pleased to announce that the mantle will pass later this year to Nicki Deeson, who is International Finance Director for Amnesty International and who is currently deputy chair. It has been a great adventure partnering with Caron and her team over that time and to see how CFG has gone from strength to strength, even when some doubted us. And it has been an immense privilege to work in this amazing sector for the past thirty years. If I had one wish for the sector for the next thirty years it would be this – that we rekindle our passion for those that matter most in our endeavours, our beneficiaries, and that we work with them to give them a voice that commands attention from those is authority, no matter what constraints are placed upon us. Thank you « Back to all blog posts