Report calls for campaign to promote trusteeship and a register of board vacancies

The report, commissioned by the Charity Commission and the Office for Civil Society, says there are fewer trustees than thought and most are male, retired and well-off

A report revealing that the majority of trustees are male, retired and well-off has called for a national campaign to promote trusteeship and a national register of trustee vacancies.

The report, Taken on Trust: The Awareness and Effectiveness of Charity Trustees in England and Wales, was commissioned by the Charity Commission and the Office for Civil Society, and is based on a survey of about 3,500 trustees carried out by Cass Business School and the Cranfield Trust in January.

The report says that there are 150,000 fewer trustees in England and Wales than previously believed. The commission register records about 950,000 trustee roles, of which 100,000 are identified as being held by someone who holds another role, which suggests there are about 850,000 trustees. But the report concludes that the total number of people serving as trustees is closer to 700,000.

Researchers found that 64 per cent of trustees and 71 per cent of chairs are male, and that 75 per cent of trustees have a household income above the national average.

The most common average age of a trustee board is between 55 and 64, and slightly more than half of trustees – 51 per cent – are retired. Among charities with annual incomes of less than £10,000, the average age of trustee boards increases to between 65 and 74.

More than four out of five (82 per cent) of trustees said they understood their general legal obligations as trustees, but in charities with incomes of less than £10,000 a year, a quarter of trustees said they did not know they had a collective responsibility for all the decisions taken by the board, whether or not they personally contributed to the decision in question.

The areas where most charities reported a lack of skills on their boards were legal, digital, fundraising, marketing and campaigning.

“There is some concern expressed regarding their role and ability in the prevention of fraud and mitigation against external cyber-attack,” the report says.

“These factors increase as the size of the charity reduces; one in five trustees in the smallest charities lack confidence in their competence in these respects.”

A second report published by the commission today, based on research by Cranfield and the National Council for Voluntary Organisations, says that trustees do not take up the support offered to them and the market for this help is not functioning well.

In its recommendations, the main report calls for voluntary sector umbrella bodies, supported by the government and the Charity Commission, to establish a campaign to promote the value of trusteeship to public life, beneficiaries and trustees themselves, and promote greater diversity within charity trustee boards.

It says the government “should play its part in resourcing such a campaign” and it should be match funded by the charity sector and the private sector.

The vast majority of trustees (71 per cent) said they had been recruited through an informal process, the report says.

In response to the finding, the report says: “A national register and regional registers of trustee vacancies should be established and publicised widely.”

Helen Stephenson, the chief executive of the commission, said it was heartening that the research showed trustees were positive about the role.

“But there is no room for complacency about the state of trusteeship,” she said.

“Trustees do not reflect the communities charities serve. Charities are therefore at risk of missing out on the widest range of skills, experience and perspective at board level.”

She warned that uniformity at board level risked creating a culture of group-think, where decisions were never challenged, and said she hoped the findings would be a catalyst for change.

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Homelessness charity removed from register after conflict of interest disclosed

After an investigation, the Charity Commission acted against Fresh Start Housing, which referred clients to a lettings agency owned by its founder

An organisation that helps homeless people to find housing has been removed from the charity register after the Charity Commission discovered it had been providing benefit to a company owned by its founder.

Fresh Start Housing was founded in 2010 by Samir Patel and registered as a charity in 2011 with the objects of providing advice and assistance to homeless people, particularly ex-offenders.

It would refer people to a letting agency, Investing Solutions Limited, of which Patel is listed as the sole director and secretary with Companies House. Both organisations operate from the same address at Battersea in London, according to their websites.

The commission opened a monitoring case in November 2015 after the BBC reported that ISL had received £5.5m in housing benefit by housing single men referred to the company by FSH. The broadcaster alleged that FSH was effectively a conduit to make money for ISL, the commission’s report on its investigation said.

In a statement released yesterday, the commission said it had concluded that FSH “was not and had never been a charity”.

The statement said the commission had questioned trustees of FSH about its independence from ISL before allowing it to register as a charity in 2011 and was assured that FSH would refer prospective tenants to a range of housing agencies, not just ISL, and that the trustees were completely independent of the company.

Trustees also claimed that FSH would generate income by charging a fee to landlords and agents when it referred prospective tenants for housing, the commission statement said.

But the commission monitoring case report said that “most, if not all persons who sought the charity’s help (its beneficiaries) were referred to ISL to be housed, and ISL received a financial benefit from rents received”.

Most of the trustees had some form of business or personal relationship with Patel and, contrary to what the regulator had been told, FSH received no payments for referrals, the statement said.

The commission found there was an inherent conflict of interest with FSH, the statement said.

The regulator said it had informed HM Revenue & Customs of its decision to remove the organisation from the charities register and that it could decide whether to recover any financial benefits FSH might have received while registered as a charity.

A spokesman for FSH said: “Fresh Start’s original request for acceptance as a charity included the expectation that we would use several different landlords. In practice, only one landlord – Investing Solutions Ltd – would always offer accommodation to clients with no cash reserves beyond their jobseeker’s allowance. Virtually all other landlords within the inner-London area need about £2,000 for fees, for one month’s rent in advance and one month’s rent as deposit.”

He said FSH had “not used any of the advantages” of charitable status by soliciting donations or recovering VAT and had not challenged the commission’s decision because it was administratively easier not to operate as a charity.

He said HMRC had not contacted the organisation after the commission’s decision because there was nothing to recover.

The organisation was continuing its work to house people at risk of homelessness, he said.

No one from ISL responded to Third Sector’s request for comment before publication deadline.

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