The Charity Commission's findings regarding the Captain Tom Foundation raise critical lessons for us charity leaders. When a charity falls so short of best practice, it not only damages its own reputation but risks eroding trust in the whole sector. For CEOs and boards, this story needs to serve as a stark reminder of the responsibilities we carry in stewarding public funds, maintaining transparency, and upholding the integrity of our causes.
In this post, I want to highlight some key takeaways from the Charity Commission’s report, and offer practical advice to help your charity stay on the right path.
Lesson 1: Strong Governance Is Non-Negotiable
One of the main areas of concern identified in the Captain Tom Foundation was weak governance, particularly a lack of systems aligned with best practices. From management accounts to decision-making processes, gaps in governance created opportunities for conflicts of interest and questionable practices.
Tips for Strong Governance:
Define Clear Roles: Ensure that trustees, staff, and volunteers understand their roles and boundaries. Overlap, such as trustees also acting as employees, should be avoided unless absolutely necessary and fully transparent.
Regularly Review Governance Policies: Governance frameworks should be reviewed annually to ensure compliance with laws and sector best practices.
Induction for Trustees: New trustees should undergo thorough induction training to understand their legal duties and responsibilities.
Monitor Conflicts of Interest: Develop a robust policy for identifying and managing conflicts of interest, including a public declaration process.
Lesson 2: Transparency Builds Trust
The public donated to the Captain Tom Foundation with the expectation that funds would be used to support charitable causes. However, the Charity Commission found instances where money went elsewhere, such as book deal proceeds directed to a family company rather than the charity.
Tips for Transparency:
Be Crystal Clear About Fund Allocation: When fundraising campaigns are tied to specific goals, ensure the public understands exactly where their money will go.
Publish Annual Reports: Share detailed financial statements, including how funds were spent, what was achieved, and lessons learned.
Use External Auditors: Have an independent party review accounts and operations annually to maintain public confidence.
Communicate Proactively: If there are complications or changes in how funds will be used, address these openly and early.
Lesson 3: Avoid Self-Interest at All Costs
One of the most damaging findings was the "pattern of behaviour" where individuals benefited personally from their roles within the Captain Tom Foundation. This included payments for personal appearances and conflicts between personal and charity interests.
Tips to Prevent Self-Interest:
No Personal Gains: Ensure that trustees and staff cannot personally profit from charity activities unless explicitly approved by the board and documented.
Create Robust Approval Processes: Any transaction involving related parties should be reviewed and approved by a majority of trustees with no personal interest in the matter.
Whistleblowing Policy: Establish a safe and confidential way for staff or volunteers to report concerns about self-interest or misconduct.
Lesson 4: The CEO’s Ethical Role Is Crucial
The inquiry highlighted that charity leaders, particularly the CEO, set the tone for an organisation’s ethical standards. The Captain Tom Foundation’s failure to uphold these standards damaged its credibility and mission.
Tips for Ethical Leadership:
Lead by Example: The CEO should embody the charity’s values in all dealings, demonstrating transparency and integrity.
Separation of Roles: Avoid situations where the CEO or trustees are involved in commercial arrangements that might conflict with the charity’s interests.
Regular Training: Provide ongoing ethics and governance training for all senior leaders.
Listen to Concerns: Encourage open communication and address issues raised by staff or stakeholders promptly.
Lesson 5: Prioritise Mission Over Reputation
The Captain Tom Foundation was described as a "lost opportunity" by its interim CEO. Its original mission to combat ageism and support older people became overshadowed by controversy. This highlights the importance of keeping a charity's purpose at the heart of all decisions.
Tips for Staying Mission-Focused:
Align Every Decision with the Mission: Before approving any activity, ask whether it furthers the charity’s goals.
Set Measurable Objectives: Define clear outcomes tied to your mission and regularly evaluate progress.
Avoid Mission Drift: Stay true to the charity’s core purpose and resist the temptation to pursue projects or partnerships that may compromise it.
Lesson 6: The Board Must Be Active and Accountable
One concerning aspect of this case was the board’s delayed intervention. Trustees are legally accountable for ensuring the charity operates in line with its objects and best practices.
Tips for Effective Board Oversight:
Regular Meetings: Ensure trustees meet frequently to review operations, finances, and risk management.
Scrutinise the CEO: Trustees should evaluate the CEO’s performance and ensure their actions align with the charity’s interests.
Independent Trustees: Include independent trustees with no personal connections to the charity’s leadership to bring fresh perspectives and accountability.
Ask Tough Questions: Trustees should feel empowered to challenge decisions and seek clarity when needed.
Lesson 7: The Role of the Charity Commission
The Charity Commission’s role in uncovering these issues demonstrates its importance as a regulator. However, its involvement often signals that something has already gone wrong. Boards should aim to proactively meet their legal obligations to avoid scrutiny.
Tips for Staying on the Right Side of the Regulator:
Understand Your Legal Obligations: Ensure trustees and senior staff are fully aware of their responsibilities under charity law.
Stay Ahead of Reporting Requirements: File annual returns and other documents on time, with full and accurate information.
Engage with the Commission Early: If you encounter significant challenges or disputes, seek guidance from the Charity Commission before matters escalate.
Learn from Sector Guidance: Regularly review Charity Commission guidance on governance, finance, and best practices.
Final Thoughts
The Captain Tom Foundation started as a powerful symbol of hope and unity, but its governance failings turned its story into a cautionary tale for charities everywhere. The case is a reminder of the responsibility we all have to protect the public’s trust, uphold high ethical standards, and always prioritise the mission over personal or organisational gain.
We need to learn the lessons from this case to ensure we earn the trust our supporters place in us.
From The Boiling Frog
Thanks for hopping into this week's reflections. Whether you work or volunteer for a charity, or you're just curious about the charity world, I hope today's musings left you with something to ponder, debate, or act upon.
And remember, the water's always bubbling with fresh ideas and lively opinions here, but it doesn't always have to be my voice croaking in the pot. If you've got thoughts, challenges, or insights to share, I'd love to hear from you and I'm sure others would too. Why not hop in and join the conversation? You can submit your idea here.
Until next time, stay curious, stay critical, and let's not get too comfortable.