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 of the case in 2015 and 2016 only reinforced the impression that some charities were profligate and incompetent, and the Oxfam scandal of 2018, mentioned at the start of this chapter, introduced the fear that some failed to protect vulnerable beneficiaries from exploitation. The spotlight swung onto the question of safeguarding by all charities, not just those involved in overseas aid and development. The Charity Commission updated its guidance on safeguarding soon after the Oxfam affair, and in 2020 published a report on a special school run by the Royal National Institute of Blind People (RNIB) which said there had been ‘comprehensive failures in governance that placed the safety of young people in its care at risk and allowed harm or distress to be suffered by some’.11
The change in political attitudes
So much for the behaviour of charities: what about the other main element in the cloud that hangs over them – the shift in the attitude of government? In the first decade of the 21st century, under the Labour administrations led by Tony Blair and Gordon Brown, the sun shone on charities and the voluntary sector. Charity law was modernised, the Office of the Third Sector (later renamed the Office for Civil Society [OCS]) was set up in the Cabinet Office to smooth the path for charities and the sector was seen by the government as an important component in the drive to reform public services. Gift Aid was relaxed so that donations of any size – not just those above £250 – could bring a tax refund to charities. Many Labour MPs and ministers had worked in the sector when the party was in opposition and were sympathetic to it. In an ambitious document in July 2007, Brown pledged to invest an unprecedented half a billion pounds in the sector.12 ‘We set out … a vision of how the state and the third sector, working together at all levels and as equal partners, can bring about real change in our country,’ wrote the Prime Minister in the introduction.
All that was severely modified, however, after the global financial crisis and the formation of the Conservative-led Coalition government following the general election in 2010. Charities were not spared in the new era of austerity: the funding of capacity-building organisations set up by Labour came briskly to an end, and subsidies to umbrella bodies like the NCVO and the Association of Chief Executives of Voluntary Organisations (Acevo) were soon phased out. Responsibility for charities and voluntary organisations also slipped down the Whitehall hierarchy. The budget of the OCS fell from £227 million in 2009/10 to £56 million in 2014/15, a drop of about 70%.13 When Theresa May became prime minister in July 2016, the OCS was moved from the Cabinet Office, seen as the policy centre of government, to the more peripheral Department for Culture, Media and Sport (later the Department for Digital, Culture, Media and Sport, DCMS); and after the general election of 2017, when the Conservatives lost their overall majority in Parliament, the sector lost a minister of its own and responsibility for it was added to the portfolio of the minister for sport. This prompted the shadow civil society minister at the time, Steve Reed MP, to remark that the government didn’t quite know what to do with the OCS. “It should be at the centre of government rather than parked in a lay-by somewhere,” he said.14
After 2010 there was also more overt criticism of charities from some parliamentarians, mainly on the right of the Conservative Party. Charlie Elphicke, MP for Dover and Deal until 2019 and a member of the public administration select committee, complained during a hearing of the committee that “Shelter doesn’t provide any shelter” and that political lobbying by charities “subverts democracy and debases the concept of charity”.15 Elphicke, who was jailed for two years in 2020 for sexual assaults, went on: “If a member of the public puts a pound in a rattling tin, and that money is spent on press officers and Bell Pottinger to lobby a bunch of politicians, wouldn’t that person feel a bit disgusted and a bit cheated?” His fellow committee member, Robert Halfon, Conservative MP for Harlow, said there were too many very large “Tesco-type charities” that spent millions of pounds lobbying in Whitehall and questioned whether such organisations should have charitable status. The fundraising scandal discussed above also prompted outspoken criticism from some MPs.
Trevor Morris, then visiting professor of public relations at the University of Westminster, told a Charity Finance Group conference in 2013 that charities were not seen as innocent any more, faced the prospect of more attacks and should prepare for a moral crisis. He said in a subsequent interview:16
“The Today programme on BBC Radio 4 is a parade of heads of charities and NGOs making their case, often in a highly politicised way. The government is wrong, money must be spent, business must do something. It sounds like politics to me. It’s not about helping poor old ladies or hedgehogs – there’s a different feeling coming through. Some right-wing politicians have jumped on it because it’s not risky any more – it’s become acceptable to say not all charities are good … The public has a sense that some charities are rather pleased with themselves – they pay themselves a lot of money, they hassle us in the street, they’re not apologising. There’s a sense that people are less deferential towards charities and more questioning of them.”
The Charity Commission gets tough
The alteration in the political mood after the change of government in 2010 was mirrored by the general approach to the regulation of charities by the Charity Commission for England and Wales, a non-ministerial government department headed by a chair appointed by a government minister. The regime at the Commission had been relatively indulgent and charity friendly during the previous decade under two chairs appointed by Labour, Geraldine Peacock and Dame Suzi Leather. Things changed after the appointment as chair in 2012 of William Shawcross, a hawkish journalist, author on geopolitical subjects and biographer of Queen Elizabeth, the
