Charities should have open, public AGMs

A publicly listed company must hold a meeting at least annually which any shareholder can attend. Often press and industry analysts attend too. The directors account for their decisions and performance, and any shareholder can ask a question. Thus the company accounts to the  people whose money it is deploying and (therefore) whose interests it is ostensibly serving.

Why not charities too?

Charities must have ‘annual general meetings’ but these aren’t general at all: typically one of the normal, closed board meetings is designated as the AGM and nobody else knows it’s happening or is invited.

This is not good enough. Charities’ AGMs should be public for two strong reasons. First, for accountability to the people whose interests the charity serves, that is, to its beneficiaries. Most obviously, that means the people it serves now: if I were served badly by (taking a charity at random) Marie Curie Cancer Care, then the charity should account for that. More subtly, that those stakeholders also include people the charity isn’t serving but should. For instance, (I’m making this up for purposes of illustration), if cancer charities collectively underserve women, or people in the North West.

And second, because a good chunk of the money which charities deploy is the tax-payer’s – through tax relief on donations, reduced rates, zero corporation tax etc.  There is currently no mechanism for the tax-payer to hold them to account for that money. Let’s say that again: the tax-payer hands over billions of pounds with no assurance on quality or value for money at all, other than the famously light regulation by the Charity Commission et al.

So I propose that charities be made to have AGMs open to anybody, as a condition of receiving tax-payers’ money.

At these meetings, they should explain their goals, activities, how those activities are supposed to achieve those goals, their performance and achievements of the past 12-24 months, changes in the senior team, and plans for the next 12-24 months. Nothing that a competent organisation couldn’t do at a week’s notice.

They should be required to publicise the date and time in advance, and according to rules – just as there are rules for publicising public showings of art which belongs to the nation but lives in private property. For ease, I’d start with the top 450 charities, which any way account for nearly half the sector’s income.

Yes there will be costs. But shutting out beneficiaries, stakeholders and involuntary funders isn’t acceptable if you wish to be taken seriously.

How do you tell if a charity is any good? This book shows how–>

This entry was posted in Tax and governance, Uncategorized. Bookmark the permalink.

5 Responses to Charities should have open, public AGMs

  1. Pingback: What the gov’t should do about the charity tax row | Giving Evidence

  2. Pingback: MoneyBox Live: good questions to ask | Giving Evidence

  3. Pingback: MoneyBox Live: good questions to ask | Caroline Fiennes @carolinefiennes

  4. Pingback: Why I’m delighted to join a Board of the US Center* for Effective Philanthropy | Giving Evidence

  5. Pingback: Why I’m delighted to join the advisory panel of Charity Navigator | Giving Evidence

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s