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How important is transparency?

Looking into a charities finances

You’d imagine it’s very important in any sector: public, private and third. I wrote not so long ago on the amount of fraud amongst charities reaching a new high.

Take, for example, the Charity Commission’s recent investigation of the Aspinall Foundation—a wildlife charity in the UK. The Foundation paid Carrie Johnson, wife of the Prime Minister, approximately £150,000 in 2020 for ‘interior design services’, before she was offered a permanent position heading up the charity’s communications. In the same year, the Aspinall Foundation paid the wife of its Chairman of Trustees, Victoria Aspinall, £150,158…what for is not clear. With an annual turnover of £1.5m from private and corporate sponsors, it’s perhaps no surprise that the Foundation’s spending is under scrutiny (note: the wheels of the Charity Commission’s investigation began turning before Johnson received her fee)—combined, the fees paid to Victoria and Carrie total 20% of its yearly donations.

Maybe transparency doesn’t come easy to the Johnsons and their pals—as I write, Boris is under fire from all angles for being at various parties last year and the year before, when the rest of the country was ordered to abide by strict social distancing restrictions measures, in a bid to contain the spread of the Covid virus. There have even been calls for him to resign, such is the outcry that this last lie is the lie that’s broke the camel’s back. The investigation conducted by Sue Gray, an employee of Boris, will no doubt show there were no parties, no booze brought to No. 10, and nothing but Stalin-like adherence to the Covid rules of the time.

Transparency within public offices should be a thing—after all, they’re dealing with public money via our taxes.

Investigating charities financial reports

Maybe because charities are just expected to keep to higher standards, maybe because charities are tasked with doing good, maybe because charities are not driven by profits…these are all reasons why transparency is typically strong in the third sector. Yet this story shows that it’s not immune to financial mismanagement. If the Charity Commission determines that some wrongdoing has taken place within the Aspinall Foundation, they can remove trustees from the board, take over the running of the organisation and even bring the charity to a close.

Charities rely on public trust—their income largely rests on this. With few income streams other than financial contribution from the general public, it’s a risky strategy to play silly sausages with other people’s money when it’s been given in good faith. I’m quite sure donors of the Aspinall Foundation would far rather their hard-earned cash went to help the poor animals at the heart of the charity than adding to the Johnsons’ already-burgeoning bank account.

What’s remarkable is that the Aspinall Foundation’s board will know that the accounts of all registered charities must be recorded and be available to the public, under the Charity Commission’s charter. Clearly, the Aspinall Foundation believed that a fee of more than £12,500—itself a sizeable amount for work of this kind—was not enough to properly furnish the office/base of their organisation (this was paid to Victoria Aspinall in 2019 for ‘interior design services’), hence them paying Carrie Johnson twelve times this amount for another makeover the following year. I wonder whether the animals the Foundation supports and protects live in such luxury?!

Investigating charities financial reports

Few charities would even engage the services of an interior designer; most have a fight on their hands to simply fund the support they provide at point of delivery. Comfy sofas and lush, soft furnishings for their headquarters tend not to be the first concern of third sector organisations. Had the Aspinall Foundation’s board/CEO/their wives/their friends’ wives/that woman at the school gate wanted plush fixtures and fittings within their headquarters, and they were prepared to pay for these things with their own money, there wouldn’t the furore there is now.

According to research carried out for the Scottish Charity Regulator by Breaking Blue, public trust in third sector organisation rose slightly recently, going from a score of 6.14 out of ten in 2018 to 7.02 in 2020. Maybe this was brought about by the pandemic and greater public understanding of the work done by the NHS and the social care sector—and the numerous charities that fill in any gaps in their services. In this survey, transparency was important to the respondents; 58% said that knowing what their donation would be spent on and evidence of a charity’s spending helped them determine whether a charity was trustworthy…or not.

Maybe the general public is past caring about transparency in politics—it’s been that long since politicians have spouted anything remotely honest, most of us have given up expecting it. The private sector has its secrets, though it is required to be transparent to its stakeholders, even if it’s less open with its customers.

The third sector, in comparison, should be held aloft as an example and an aspiration to corrupt businesses and greedy civil servants. If a charitable organisation made poor financial decisions and offered no value for money to its donors, it wouldn’t just be letting itself down, but the reputation of the whole sector. Charities appear to be the last ones standing, when it comes to honesty and ethics—it’s therefore absolutely right that great efforts are made to stamp out wrongdoing.


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