Lessons to learn from the Kids Company saga

The case raises many concerns about the role, competency and accountability of charity trustees


Kids Company, the high profile children’s charity, finally closed its doors yesterday, amid claim and counter-claim aired in the media about its work. When the dust settles on this case, I believe important questions must be addressed about the accountability and management of charities.

The charity, founded by Camila Batmanghelidjh, began its work in 1996 in Camberwell, south London. It provided a range of support for extremely vulnerable children who included runaways, the neglected, and children permanently excluded from school.

The support offered to each child depended on their individual needs, but included intensive psychotherapy, family therapy, advice, hot meals and alternative learning opportunities. Importantly, it had a policy of never turning a child away.

Since it started the charity has raised over £160 million. The charismatic Batmanghelidjh has been very skilled at raising money, whether it is small donations from individuals, private philanthropy from wealthy donors and companies, or central and local government funding. This success enabled the expansion of Kids Company, with new offices in London, Bristol and Liverpool. In April 2013 it received £9 million of government funding, to cover two years of work until March 2015.

There is no doubt that Kids Company has made a big difference to the lives of some very vulnerable children. But so have Barnardos, the Children’s Society, Trussell Trust foodbanks and many, many more low-profile children’s charities whose names are less familiar.

We can ask the question about whether better-managed charities might have spent £160 million with better long-term outcomes for children. There is also no doubt that Kids Company has diverted funds – both statutory grants and private donations – from other children’s charities.

The concerns that have been raised about Kids Company are not recent, and date back at least ten years. Mostly they relate to financial propriety and the claims-making of Camila Batmanghelidjh. In 2007 a civil servant asked me to comment on the numbers of children the charity alleged it was supporting. I felt the numbers used were logistically improbable and were not backed up with other evidence, such as other administrative data, case studies or research reports on the nature of their client base.

I was also told at this time that Gordon Brown and his team of special advisers had over-ruled civil service concerns about Kids Company.

Batmanghelidjh’s cause was also taken up by the Tories, with Cameron’s famous ‘hug a hoodie’ speech making extensive reference to Kids Company. Long-standing civil service concerns about the charity continued to be over-ruled by Number 10. A Cabinet Office review of Kids Company undertaken in 2014 came to nothing.

In February 2015 decisions about Department for Education grants to scores of children’s charities were delayed because of a dispute between Number 10 and civil servants over the Kids Company grant (Kids Company won this battle). Around the same time the Spectator magazine aired its concerns about the charity.

Despite receiving a substantial grant from the government, poor financial management meant that the charity was already near to closing by this spring. Batmanghelidjh then tried to obtain further government funding, using the threat of closure. After weeks of negotiation a deal was struck in late June 2015. Kids Company  was to receive a one-off package £3 million funding, conditional on Batmanghelidjh and chairman Alan Yentob stepping aside and a complete restructure.

But again it seems that civil service concerns were over-ruled by ministers: a letter by Richard Heaton, permanent secretary at the Cabinet Office, is quite uncompromising. But new allegations about sexual abuse led to the withdrawal of a large private donation, the eventual loss of Cabinet Office funding, and eventually forced the charity to close.

I believe that lessons need to be learned from the whole saga. We need to interrogate the claims-making of charities and not blindly accept them. Yesterday, Batmanghelidjh stated that 6,000 children would be abandoned if Kids Company closed, children she said have been ‘raped, attacked and have no relatives.’ For all their failings we do have statutory social services in the UK, who protect the most vulnerable children.

If Batmanghelidjh’s assertion was true, it would represent the largest and most shocking failure of social services, ever.

In awarding grants to Kids Company, ministers have continually over-ruled civil servants, not just since 2010, but before this. I would hope that both the Public Accounts Select Committee and the Education Select Committee take up this issue.

The case of Kids Company also raises many concerns about the role, competency and accountability of charity trustees. They lead their charity and have overall responsibility for how they are run. Trustees can and do sack chief executives – it has happened at two of my workplaces. They also sign off the accounts and provide financial oversight.

I find it surprising that Kids Company trustees allowed the charity to run for so long on a hand-to-mouth basis with little or no financial reserves. With more and more public services delivered by third sector organisations, including charities, charity trustees must be competent enough to provide oversight and be accountable for public monies they spend. This issue must also be considered by parliament.

Jill Rutter writes in a personal capacity and is a contributing editor to Left Foot Forward.

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22 Responses to “Lessons to learn from the Kids Company saga”

  1. Theo Blackwell

    If a local council Cabinet member had made such a decision over the advice of officers to give money to a pet project, they would be resigning now.

  2. Selohesra

    I don’t really see why Government funds charities – does that not make them less glamorous Quangos? – surely one of the points of charity is voluntary giving not enforced through taxation

  3. Nick

    The golden rule for any minister /civil servant or diplomat
    is to not get involved on a personal level and to keep a good degree of

    Some of the nicest people you will ever meet in life with regret at
    this level have a dark side and only a few can see the warning signs which are
    very minor but are there for the trained eye at all times

    You have to remember also at this level that those that are deceptive
    can see in you that you know what is going on and will give you a wide birth when
    your paths cross in future

    As to what has gone wrong here will be impossible to determine
    with a prime minster such as we have who has no idea in how charities are run and
    even much less so in children’s charity

  4. Mark

    Even a casual glance at the last annual report is eye opening. Kids Company received £23m in 2013. How then have they run out of money so quickly? Their staff costs were about £15m. Now I accept that the support they provided is labour intensive but with no upper limit to the amount of support provided, it was only a matter of time before the whole ship capsized.

    The money shelled out by the Govt could have been targeted at local schools to provide the support needed and been just as effective.

  5. Tir Tairngire

    Sounds a bit like Quilliam

  6. steroflex

    I have the privilege of working with the a charity which has open doors for anyone. We welcome each abandoned mother, lonely old man, family with kids and every drunk. Because we are in east England, most of the people we welcome are not English speakers so we also provide a legal and translation and advice centre for free – yes, we give our time for free.
    And do you know what? We get peanuts.
    When I see this public school educated (Sherbourne) white, (born in Iran) middle class person dressed as a Yoruba getting £160,000,000 for a few children in three cities, I feel, yes, jealous. And sad.
    What a terrible betrayal.

  7. steroflex

    All charities have a grand aim. So has Quilliam too. That and Kids Company.
    Have you got any evidence that Quilliam is fiddling the books too and people are raiding the pot of money?
    If not, perhaps it might be better to keep silent.

  8. AlanGiles

    My problem with Ms Batmanghelidjh was that she seemed to want to be some sort of star, hence the somewhat eccentric mode of dress, and the fact the organisation was too focused on her as an individual. Plainly administration wasn’t her strong suit.

  9. Tit Tairngire

    Keeping silent has never been my strong point. Quilliam will go down in flames. Nawaz’s narcissism is such that he can’t help himself. He will do something really dumb fuck and that will be the end of him. Then y’all will have egg on your faces. Remember. You read it here first.

    Of course he does have the option of suing me. If he were to persuade me that he was serious I would provide him with full details.

  10. damon

    I’d be interested to know what Kids Company did to combat the gang and street culture.
    Some of these young people don’t even speak English in a way that was understood twenty years ago.

    This young rapper grew up in the same part of London as me, but he comes across as totally foreign.
    And he’s one of the ”good ones”.


    Millions of pounds paid out because of family failure. The tax payer footing the bill. I watched all those screaming women on the telly last night about the closure. Maybe a bit of personal responsibility from them is required.

  12. stevep

    It should be the role of any advanced society to care for the more disadvantaged members of it.

    Sadly, we have been led to believe that this role should fall to charities, funded by the whim of voluntary donation. Made inefficient by competition and huge advertising costs.
    As Clement Attlee said ” Charity is a cold grey loveless thing, if a rich man wants to help the poor, he should pay his taxes gladly, not dole money out at a whim”.
    The Labour party should commit to Social Democratic principles and commit to reversing any Tory destruction of the welfare state.
    It should commit to building a society in which we all play our part, pay our taxes according to our wealth and creating a country in which charity is not necessary.
    Before all the brainwashed far-right trolls start whinging, ask yourselves what kind of country do you want YOUR kids to inherit:
    One based on greed and charity or a country based on fairness, relative equality and lack of want.
    At the end of the day, it`s your choice.

  13. blooyonder

    My main concern with this article is that it fails to contextualise the tragedy of the closure of kids company with regard to the structural flaws and catch 22s of charitable funding. Of course the lesser public accountability of charities is a concern in the outsourcing of essential social support – but more of a concern in my eyes is the increased outsourcing of essential social support to organisations competing for private funding, of which there is limited, unreliable supply. Most funding is grants for project work only – it is extremely difficult to secure the kind of funding that can be stuffed in a savings account to build up reserves. As for charities getting away with outrageous claims; in my experience, it is rare for charities’ “claims-making” to be “blindly accepted. Charities are subjected to much scrutiny in the form of outcomes measurement and reporting to funders. Funders take their role as scrutinisers in this respect extremely seriously – because they have to justify to whom they award grants and why. The competition is extremely stiff, and results in serious instability for the sector as a whole; high turnover of staff (many of Kid’s Company’s workers were contractors who didn’t get paid regularly when there were cashflow problems) which results in short-term institutional memory and loss of learning; and other issues related to the structural funding flaws mentioned above. How can it be safe, reliable, or even ethical to outsource the care of children to the sector given these problems? Finally, I am flabbergasted at the naivety implied in Jill Rutter’s disbelief that there could be such need for Kid’s Company’s support. Unfortunately, childrens and family services are so severely underfunded and supported, so maliciously maligned and their morale eroded, that innovation is all but impossible, and they are indeed overstretched. Kid’s Company was needed. Its closure is not about stupid civil servants falling for the charisma and glamour of a competent eccentric, it’s about the structural problems with the funding of the voluntary sector, and the political problems of relying on the voluntary sector to run essential public services. It’s about neoliberalism, and New Labour started us on this, as many another, slippery slope.

  14. omotolanisulu

    Selohesra, I do not see anything wrong in government funding charities, but to expect that forever is short of facing reality, its a charitable purpose and not a mandatory lifetime government investment. Taking responsibility for successes, failures and diversification is what being at the top of the game is all about. Where does the boards come in all of this?.

  15. Unbalanced Views

    At what point does it stop being a charity and becomes a simple fraud ? how much money has to be squandered by people purporting to be running a charity before action is taken ? £24m in this case, or so it would seem

  16. TN

    People of your mindset (Islamist sympathisers and hard leftists) will always question Quilliam because they refuse to bow to the most conservative and/or vile aspects of the Islamist ideology and calls a spade a spade. The truth is too hard for your ilk to understand/accept.

  17. JarrowPete

    Often, it is charities that pick up the pieces for the failure of governmental policies. Surely governments have a moral as well as financial responsibility to fund charities.

  18. anthony crawford

    A good article this but there is one further lesson that has not so far been addressed. Kids Co no doubt did some good work and was valued in the community. But this is a fiasco made in Toryville. This is what comes of neoliberal social policy. Tories have used Batmanghelidjh particularly because she is media savvy and charismatic – and the purpose has been to denigrate professional practice to undermine the work of LA social work. It is for this reason that so much money has been thrown at Kids Co. All part of the Jesus inspired development of the big society. What we can learn from this is to trust more the the collective and accumulated expertise of professionals in practice and to be more savvy about supporting professionals in practice and recognising that promotion of charities, whilst not in itself a bad thing, is likely to form part of the amateurisation of service delivery and the abnegation of state responsibility to the vulnerable and needy.

  19. Mrs Jackson

    Speaking as an outsider with no emotional investment in either side, a number of things seem apparent. When Camilla B first set up KC, it was as a centre of last resort for troubled young people in London who fell outside the usual social services net: those escaping bullying, domestic violence, gangs sub culture. It provided a safe place, a hot meal, a listening ear and even pocket money to help them get some order and hope back into their lives.

    And Camilla B was a colourful and persuasive advocate. Politicians liked to be seen supporting her. So did celebrities. The money rolled in. The project expanded both geographically and in terms of its activities – setting up Urban Academies to help older young men. (While worthy, this was always risky : helping mature men with bad problems alongside vulnerable much younger men and women.). As it expanded I imagine hard pressed social workers also referred vulnerable young people to it. Meanwhile the underlying financial remained – money coming in was spent on supporting and expanding the work with no revenue streams or investments and, outside of staff costs, little accountability.

    So as it expanded Camilla B seems to have gone on with the same financial model and the trustees seem to have acquiesced – with their only income stream being what they could raised annually – no reserves and no investments – and it seems too many staff to properly manage and too many “clients” to adequately support. To sustain this Camilla B used her contacts to raise more funds and in particular her contacts in government. Public sector money however has strings, in particular you have to demonstrate your results but the numbers bandied about by KC could not be readily substantiated and not could elements of its expenditure be easily accounted for (the”pocket money”.) Clearly it was going to unravel at some stage, as it has, with all parties emerging badly. Maybe if she had just stuck to her original knitting, yiung people in London, it would not have all ended in tears.

  20. Jennifer Hornsby

    You say ‘failure of government policies’. Would this include failure to have a progressive tax system, so that the needed work with vulnerable, neglected children could be done in the public sector?

  21. Giles Farthing

    She looks like someone made a blimp out of colourful curtains

  22. Giles Farthing

    But think of the whordes of new vulnerable cases that are coming from calais. Soon they will divert all your finding because done lefty fools think we should be the world’s social worker

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