Charity being mis-managed

[NCOneDayOnly]

I've name changed for this and would really appreciate any guidance from anyone with experience of working within the charitable sector who may have experienced something similar, or anyone who has experience of Charity Commission procedures.

I work for a charity that I have serious concerns is being mis-managed; both by the chief exec and all of the board of trustees (with one notable exception).

My concerns relate mainly to operational and financial mis-management; for example:

• CEO and board of trustees being entirely dis-interested in day-to-day oversight, governance or interaction with staff and the various projects we run in the charity's name


• failure to act in a timely manner to avoid unnecessary expenditure and costs to the charity's available funds


• promises of actions/work being undertaken by the CEO which never materialise (the CEO essentially sits in meetings with staff, agrees to undertake tasks, admits they need to act differently and then does precisely nothing different)


• inconsistency in budgeting eg: applying costs to a project that the CEO knows cannot afford to pay them owing to lack of funds (funding being exceptionally difficult for some of the charity's projects in the wake of covid), no clear guidance on how budgets are set up, repeatedly failing to address budgeting inconsistencies and failure to understand or act upon staff concerns around budgetary issues


• board of trustees do not act with any impetus, for example: a major source of funding was lost to the charity during 2018/19 and a strategic review for the organisation to address this was not implemented until 2021/22


• once the strategic review was begun, and recommendations were put to the board of trustees, the trustees once again failed to respond in a timely manner and/or ignored or watered-down the recommendations - for example; a 'deep dive' financial review was recommended. That 'deep dive' was undertaken only by the CEO and the chairman of the board of trustees who declined an offer of assistance and support from an external, independent officer.


• office space costs the charity around £30,000 p/a. The office space has not been used to any really degree since the start of the first pandemic lockdown and all staff have been working remotely for around 95% of the time. Trustees have STILL not agreed that notice can be given to give up the office space, thus forcing the charity to pay around (to date) £75,000 in rent which could have been avoided. Staff unanimously agreed that the charity should give up the office to save costs, money which could have been diverted to the projects, but the board of trustees did not wish to enter into discussions with any staff members about this.

Several colleagues and I feel that the charity is being mismanaged and that the board of trustees has allowed it to run into financial difficulties. The last set of filed accounts state very plainly that money applicable to 12 weeks reserves should be maintained with an accompanying note stating that the reserves at the end of 2021 were actually very much less than that - surely, that means the trustees have been negligent - if only on that one point?

Staff have reported concerns to the CEO and various members of the board of trustees on numerous occasions, but nothing ever happens. Colleagues who have worked for the charity for longer than I have been through two previous strategic reviews and NOTHING has changed. The charity simply limps along until the next lot of interim funding saves it from collapse in the nick of time. As a result, medium to long-term planning is impossible.

Charity Commission guidance on whistleblowing says the Charity Commission will '... if we investigate a concern we usually work with the charity and the trustees to get it back on track...'. There's also some advice that says you can report 'mis-management' if you think it actually is happening, has happened or is 'likely' to happen, so that might cover some of the above.

I am conscious that any whistleblowing would/could have an impact on jobs, but I am also hugely concerned that a charity is being managed in such a careless way.

Any advice would be very much appreciated. Thank you.

My first thought (before you even mentioned them) was the Charity Commissioners. If is this one trustee you have faith in, perhaps he/she would be prepared to back you.
In terms of whistleblowing, the charity should have a policy to protect you.

Rather tellingly, the whistleblowing policy doesn't mention anything about 'mis-management', and only includes the following:

• committing a criminal offence


• failure to comply with a legal obligation


• miscarriage of justice


• endangering the health and safety of an individual


• environmental damage


• concealment of information related to any of the above

It's almost as though they KNOW they're mis-managing the charity and are trying to say, via the whistleblowing policy, that their actions don't form part of anything that could be reported.

They won't do anything. Being rubbish at your job, stupid, incompetent etyc isn't against the law. And the 12 weeks reserves note in the audited accounts is a standard clause - it isn't illegal to have less. What is far more likely is that the CC will tip off the CEO / trustees and there will be a "hunt for the guilty".

Yep.
Charities' Commission.

I'm not sure that aibu is the place for this. I am a trustee of a charity, and the role, the relationships and the responsibilities (and what we're NOT responsible for) are very very complex. Even our lovely staff, though it's been explained to them time and again, seem to think we can do things that we can't. It's very easy for a charity CEO to shift the blame onto their trustees (and vice versa) because of the complexity of the relationship.

Unless each responding poster is able to confirm that they have experience in this area, their advice isn't likely to be that helpful to you. You're likely to just get a knee jerk "they're wasting money, report them!" from everyone

I'm not convinced that most of the things you mention will be of any interest to the CC. I've added a screenshot of the level of issue that they would expect to hear about.

www.gov.uk/guidance/report-serious-wrongdoing-at-a-charity-as-a-worker-or-volunteer

@saraclara - the loss of funding if over 20% of the whole income has already happened. It happened several years ago and is STILL being cited as a reason for our current deficit. I've just found out our current deficit is running at around 18% of income, and has been as high as '25% of 30%' in previous years.

Sorry I should have said - I have loads of background in working with charities and the CC. I have seen cases of charity trustees literally breaking the law and the CC have refused to intervene, saying it is up to someone to prosecute if they think the trustees are wrong. What you are describing might be bad management but that isn't illegal, so they won't do a thing. If they acted on the sorts of things you describe half the small charities in the country would be being investigated.

Any UK registered charity is answerable to the Charities Commission, who operate set standards.

If the charity receives any local funding support ( grant from your local Council etc) the LC will also be interested in abuse of funding, pretend activities etc.

I once worked for a charity where the local council, and a national Unbrella charity, sacked the manager instantly following an investigation by local newspaper journalist into what really went on . It was utterly damning, with photo evidence.
Then the national body checked the accounts, and found a huge unnaccounted hole. The local council instantly withdrew funding and other support and the place shut weeks later.

@saraclara - I'm not sure why 'AIBU' came up as an option on this as I didn't specifically choose it.

@Philisophigal I've worked with many charities, NGOs and not-for-profit organisations over the years and this is by far the most poorly-run I've come across. I think it's basic lack of transparency and dialogue from the trustees that gets me the most - there's a very distinct feeling that the trustees would much rather the staff just all shut up and stopped bothering them! Added to the fact the CEO is neither interested in, nor capable of, showing any form of leadership, it's left me and my colleagues feeling like we're all on a slowly-sinking ship and there's not much we can do about it.

The sad thing is that the individual projects really do make a massive difference to and add real value to many peoples' lives - one of them is about to win a prestigious award and I know the CEO will be only too pleased to act as though they had anything to do with it when it's all been down to the hard work of my colleagues who work on that particular project.

It's frustrating, but I guess I'll just wait and see what the pressure from my colleagues and I turns up to encourage the board to implement the changes that are so desperately needed to improve the organisations as a whole. It's very much sink or swim at the moment.

@Jalisco thanks for your comments - however disheartening they may be, the experiences of others who've witnessed similar situations somehow does make me feel as though I'm not in some sort of unique position. It's maddening how some people work for charities without any sense of responsibility or ethics about how funding is used or applied.

@2bazookas blimey, so did you end up loosing your job?

I don't think there's wide scale 'fraud' or 'theft' going on, so much as financial incompetency and careless use of funds - mainly owing to trustee inaction to adapt or flex with any kind of impetus.

The loss of so much funding might be the basis on which the CC might investigate, but I'm not sure, upon reflection, that whistleblowing would serve any real material aim or improvement in that respect. It's not like a CC investigation would, suddenly, turn up a load more funding - and, in fact, if word got out that the charity was under CC investigation, it would likely put funders off making any more money available to the charity. I don't imagine the CC actually advertise who they're investigating, though!

It doesn’t sound good. Are you a member of the senior team and therefore party to most discussions including those with trustees?

Some of the issues come down to what is fact and what is opinion. Ideally there should be 3-6 months operating costs in reserves. However there can be times when this isn’t the case and if there’s a plan to address rhat it’s not necessarily concerning. It’s also not unusual to run at a deficit at times and your post indicates that the deficit is reducing

re the office space. That may be contractual and it may be impossible to come out of the contract currently in which case there’s not a lot you can do

Equally the role of the trustees is not to have day to day insight of projects and whilst it’s nice if they get to know staff it’s not a pre requisite

The budgeting etc is more concerning and potentially sounds problematic. However it depends on your role as to whether you have a knowledge or an assumption as to whether this is a genuine or perceived problem. If it is genuine then I think you so need to speak to the charity commission or take some maybe one linked in if you can post anonymously

Equally the role of the trustees is not to have day to day insight of projects and whilst it’s nice if they get to know staff it’s not a pre requisite

Yep. Our board was criticised a while ago for being TOO involved. At that point we were all current or past volunteers for the organisation and not considered far enough removed to be objective. Our board now has people on it who have never had any connection with it, but have they visited our projects. But they bring phenomenal experience and expertise, and laser like logic and professionalism, which we really needed.

Of course, because of the skills they have, they are in Big Jobs that take up a lot of their time. Staff would love to see them around, but they can't be. It doesn't mean they're not passionate about the work we do, but their role as board members does not require that they do that. It's a nice extra, but a governance role is entirely different from a staff role, and@ staff can't expect to have the relationship with them that they had with those of us who volunteer with the charity.

but have they visited our projects

NOR have they....

Sorry, typo.

failure to comply with a legal obligation I would have thought this was a bit of a catch-all - mismanaging a charity is not complying with the charitable objects.

"legal obligation" doesn't mean illegal activity, it means any legal obligation which can mean regulatory requirements, contracts etc.

@eatsleepswimdive I'm not part of the senior team, but the strategic review process was intended & designed to involve two-way dialogue between staff & trustees, which just isn't happening.

Our office situation is that we're on a short-term rolling contract and able to give 6 months notice, so no long lease. This issue was first put to the board over 18 months ago and there's still been no decision made by them on it.

I get what you say about trustee involvement, but the trustees are in positions where they really need to take important decisions that could/will have a massively beneficial effect on the services the charity is able to provide - but they're just inert (with the exception of one who tries their absolute best, but gets nowhere in encouraging their fellow trustees to make decisions).

We're not asking them to be involved with the individual projects, per se, but more do what they're meant to do from a governance and oversight perspective in going some way to safeguarding the overall financial health of the charity by taking decisions that are, absolutely, within their remit to take.

A) start gathering paperwork to prove mismanagement.
b) sorry, that’s more work for you, but someone has to do it.
c) one page summary (your post is great start) of failures, with cost, then total.
d) dossier to CC. Leave them to it.
e) when that doesn’t work fast, whistleblow dossier to the donors.

Charities get away with shit nonstop, but donors can stop funding it anytime they like. Big donors are trained about how to give, they’ll be used to dealing with concerns.

Have you thought about joining the board of trustees to implement change with the CEO?

I hadn't thought of that, no, and I'm not clear on whether I could, as an employee of the organisation, also be a trustee, but I'll look into it.

It is possible - but it is extremely hard and makes things very complicated. You couldn't possibly be "neutral" and avoid a conflict of interest because you clearly have one, and that could make your own judgements questionable.

If you really wanted to whistleblow you could take it to a newspaper to investigate?

blimey, so did you end up loosing your job?
I know of many instances where this has been the case. Funders are much more likely to act than the CC - but by taking away their funds. That is one of the red flags I raised earlier - if the CC contact them, even if they don't investigate, they will know there has been a compliant and I will lay bets they will identify it came from someone on the staff. At which point you may ALL lose your jobs. If that is a risk you are all willing to take, then fair enough. But not everyone may be able to afford that. Like I said, they may be incompetent / stupid etc but you haven't given any indication that they have actually done anything that the CC can remove them for. And as long as they are in place you are all potentially target practice...

I'm strongly focused on charities governance and agree with everyone above. It's very very hard to get the CC to do anything.

You need some disruptive governance - stronger better trustees who can point out where the board and CE are failing against obligations. Especially your chair, who is on the hook for a lot of this.

Maybe send an anonymous letter to donors? If they include local authorities, 3 months of reserves is likely a contractual requirement. If you are subjected to detriment (bad treatment) because they suspect you of being responsible, that's against the public interest disclosure act and you can ring the Protect hotline for advice. You might want to anyway, they are very helpful.

Alternatively you could get your friendly trustee to ask how long it has been since an external review of governance and then go from there. But it can't be derailed into another 'strategic review' because that is always the dodge.

Lastly, you don't have to have absolute grounds for whistleblowing, just the belief that you have found or know something which you believe qualifies and have a duty to act. So you could overthink making a report which probably would give you the protection to Acas the hell out of any attempt to make your life miserable.