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.
22 Responses to “Lessons to learn from the Kids Company saga”
JAMES MCGIBBON
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.
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.
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.
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?.
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