I wasn't sure whether it would be approriate or useful to add more words to everything which is being written about this sad situation but there's a lesson here which I think is being missed.
A legitimate question you might ask among all the media noise about the closure of Kids Company is “Where are the Trustees?” They’re the ones ultimately responsible for the charity, after all. They’re in a difficult position: having taken the decision to close the charity they can’t say anything much publicly as there are all kinds of legal issues for them to deal with: not least the responsibility to around 600 employees. But the inability of the Trustees to speak leaves a situation where the only person who is saying anything and is therefore the focus of all the attention is Camila Batmanghelidjh – the founder and undoubtedly the powerhouse of the charity. But she is only the senior employee: she is accountable to a Board of Trustees.
And that’s the point I want to make here: running a great charity is about getting the balance right in all the right places at all the right times.
I’m not going to write a piece extolling Camila’s virtues or criticising her. Far too many others are doing that at the moment and I question how many have actually met her, really know her work or worked alongside her. I’ve never met her and perhaps it’s inevitable given that I work as a charity CEO that I’m reflecting on how I would respond in a situation like the one she’s faced with. It seems to me that Camila has worked hard to become a high profile figure as a means of gaining support for her cause: famous, recognisable and someone who is clearly brilliant at advocating the issues wants to see addressed - perhaps she's been a little too good at it for some people? The balance issue here is perhaps whether Kids Company is too much defined by her alone – something known in the charity sector as “Founder syndrome” though it’s also seen in entrepreneurs in the private sector.
All I can say is that whenever I’ve heard Camila speak or read interviews, she comes across as someone who cares, who knows that the system and society is failing to support lots of children, young people and families. Whether what has happened actually is a case of the heart overruling the head I can’t say but that’s what governance in charities is for: the trustees and managers are there to support and challenge each other to manage the charity to be as efficient and effective as possible. If the balance between them slips, it leads to serious problems.
The ‘charismatic leader’ is a tricky issue for charities. You need someone who can win friends and influence people – any business knows that and it’s perhaps even more necessary when you’re trying to encourage people to support a cause by appealing to altruism. You need someone who can champion the cause and motivate everyone to do their best for it. But that’s purely about creating the circumstances in which work can begin: you can’t run an organisation based on a cult of personality. You have to be a leader and a manager and grow those skills in other people too. That’s a balancing act for a charity CEO as an individual and again why it’s important to have strong governance: one of the most essential things a Board of Trustees does is appoint and manage the CEO.
In some of the interviews I’ve heard with Camila and with children and young people in the last few days, I began to wonder whether the balance between “role model” and “hero worship” has been lost somewhere. You certainly can’t run services based on any kind of hero myth but I find it hard to believe that an organisation the size of Kids Company could have operated like that. What seems to me far more likely is that what we’re being presented with are emotionally-charged responses in a crisis being captured a media machine which wants all the pieces of the story to be as powerful and punchy as possible. So that issue of balance becomes impossible to judge through the distorting lens of the media.
There are a lot of allegations about financial mismanagement floating around – though Camila has repeatedly said that none of the people who have expressed these in public had ever raised such matters with her. Were they raised with the Trustees, I wonder? One point which can be identified as an indisputable fact does concern me. If you look at the 2013 accounts for Kids Company 2013 it shows an annual income of £23.1million and then, as required by law, it describes the charity's reserves policy. It states that the charity had £434,282 in reserves at the end of December 2013. That’s a plain and simple fact stated in their own report, so they clearly knew. It should immediately ring some huge alarm bells. With hundreds of staff it can’t possibly have been enough to address their statutory redundancy liabilities. The Board of Trustees has a duty to set the reserves policy so how did this happen?
Given I’m talking about balance, I’m trying to keep an open mind about where the relationship with Government comes in. There’s a general view in our sector that it’s best not to get too cosy with Government – whether that’s nationally or locally – as politics (lower and uppercase) are almost impossible to navigate. From what I can see, my guess (and that’s all it is) is there was an understanding of some sort that the charity should put all their resources into providing support for as many children as possible and never turn anyone away – and the Government would step in to help if needed. That sort of relationship makes me uncomfortable. It’s not objective enough, not transparent enough and certainly not very secure. If there were some kind of informal assurances, the Trustees of Kids Company might have judged that allowing the reserves to run low was a reasonable risk to take if it meant they didn’t have to turn away people who were asking for help. That’s a very seductive idea. Did the Trustees get the balance of risks wrong? Did they put too much faith in informal relationships?
That’s not just an academic question, nor even a matter of the personal liability of the Trustees: they had to balance the risk that they would not be able to fulfil their duty of care to the people they support and the people who work for them. I have sympathy with the staff who have lost their jobs as a result of the closure but they all know that they were employed to do the best they can for the children young people and families.
The existence of Kids Company doesn’t matter in itself: a charity is only there as a vehicle for achieving a social purpose- a means to an end, nothing more. What makes me most angry about this situation is the thought of the children, young people & families who Kids Company has been working with. Because of a lack of reserves, instead of a managed process where at least there would be time to make some kind of alternative arrangements, they’ve had a source of support ripped away from them overnight. Kids who are already having a bad time have had a crisis thrown at them which was not of their making. That was the real risk. In all this mess, decisions were made by a whole range of people which got that balance completely wrong.
By allowing this to happen it seems to me that the Trustees have also done damage to charity sector’s reputation at a time when so many small local charities are working with decreasing resources to meet rising needs as public sector cuts eat away at social care provision. I fear we’ll see more specious headlines and commentary about wasteful charities, sock puppet charities and fake charities “over-reliant” on Government funds and no doubt the issue of charity CEO pay will rise again. But if the example of Kids Company is ever used by any funder or commissioner as a reason not to support any charity which could help people who need support, then the Kids Company Trustees will have created far greater damage than just to their own organisation.
So, if you’re a Trustee of a charity, always keep an eye on the reserves. It’s not just spare money, it’s a vital part of the balance needed to provide services in a responsible way.