After Kids Company, trustees ‘becoming more like inspectors’, says Acevo chief

Vicky Browning tells the Association of Volunteer Managers’ annual conference that trustees feeling under pressure are crossing the line between governance and the executive

The fallout from the collapse of Kids Company means charity trustees are “becoming more like inspectors” and putting their noses too far into executive business, the chief executive of the charity leaders body Acevo has said.

Speaking at the annual conference of the Association of Volunteer Managers in London yesterday, Vicky Browning said charity trustees were under more pressure than ever before.

She said the role of trustees was about three things: strategy, scrutiny and support. But she said events such as the dramatic collapse of Kids Company had affected trustees’ behaviour.

“The way that things like Kids Company have affected us as a sector is that trustees are becoming more like inspectors,” Browning said.

“They want to be absolutely sure about everything and they are getting their noses in a little bit too far across the line that normally divides the executive and non-executive responsibilities.”

Browning told Third Sector after the session that her comments were based on what she was hearing from her membership.

“It’s a sense I get from Acevo members that the line between executive and non-executive responsibilities, which is often something of a grey area, is shifting further into what they consider to be executive territory,” she said.

“The role of trustees has always been that of strategy, scrutiny and support, but in some cases there’s a feeling that the scrutiny role is turning more into that of an inspectorate.”

She said there was no sense that people were blaming trustees for this, but it was a result of the increased pressure and heightened sense of responsibility trustees were feeling.

“But the danger is that it leads to a greater sense of risk-aversion at a time when the sector needs innovation and a positive attitude towards risk more than ever,” she added.

The former trustees of Kids Company and Camila Batmanghelidjh, the charity’s founder and former chief executive, are facing disqualification proceedings after the charity closed abruptly in 2015.

The trustees have said they “wholly reject” the allegation that they were running an unsustainable business model and the decision to bring disqualification proceedings was “both unjust and unprecedented”.

If the proceedings are successful, they could receive bans from running or controlling companies for between two-and-a-half and six years.

Batmanghelidjh told Third Sector this week that she would advise against people becoming charity trustees until the Charity Commission had completed its investigations into Kids Company.

Batmanghelidjh said she believed that she and the trustees of Kids Company had been treated badly and the case being brought against them could set a dangerous precedent.

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R Fundraising administrators to dissolve the company

Administrators for R Fundraising, the telephone fundraising and outsourcing agency that which closed with the loss of 99 jobs in 2015, have moved to officially dissolve the company.

The latest administrators’ progress report suggests there will be enough money to fund payouts to former employees, but not to pay the £1.6m owed to unsecured creditors.

The agency’s parent company, Fundraising Initiatives, which has since closed, announced the closure of R Fundraising in July 2015, saying “current market conditions” had given it no choice and that its position had become “untenable”.

Third Sector reported at the time that R Fundraising was understood to have been affected severely by the death of Olive Cooke in May 2015, with several large charity clients suspending or pulling out of their contracts with the agency.

The administrators, Begsby Traynor, filed notice at Companies House yesterday that the company would officially be dissolved.

In their initial assessment, the administrators said preferential creditors – the employees – were owed a combined total of £75,880 of arrears in wages and holiday pay.

The employees themselves will have received a payment from the Redundancy Payment Service at the beginning of the administration process. In the most recent administrators’ report, made in February, the administrators said there was likely to be enough to repay the RPS.

But it said: “Based upon realisations to date and estimated future realisations, we anticipate that there will be insufficient funds available to enable a dividend to be paid to the unsecured creditors.”

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The news comes just over a week after the fundraising technology and charity database consultancy Purple Vision announced in a statement on its website that it would cease trading and go into voluntary liquidation from 31 July.

The statement said: “The directors have concluded that, without further short-term funding, the business cannot continue trading with confidence that future obligations will be met, and have made the reluctant decision to close, rather than continue to trade and incur costs or make commitments that might not be honoured.”

The company had been in operation for almost 14 years when it closed.

“We realise that this news will come as a shock to everyone we have worked with over many years,” the statement said.

“By stopping at this time we have been able to ensure that all salaries are paid to date and to minimise the impact on those few trade creditors that exist. Even so, we realise that this decision will impact people’s lives and we very much regret the uncertainty that this will cause.”

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