David Cameron praised Kids Company as part of his “big society”. After the organisation’s collapse last week, Richard Belbin asks what attitude the left should take to charities.
The closure of Kids Company has been met with a mixed response from many in the media and indeed from other workers within the voluntary sector. Whilst no one has any doubt that the charity did important work, dealing with individuals who were in desperate need, having been failed by the mainstream providers, there have been many questions about how it did so, and about its ‘charismatic’ founder and leader Camila Batmanghelidjh. Whilst feted by politicians, and highly successful at raising money from the most unlikely of corporate sponsors, rumours of mismanagement and poor practice were rife, and distrust of Batmanghelidjh commonplace.
So what went wrong?
Kids Company began as a small project in 1996, providing a drop-in for young people who were not being looked after by their parents. They provided food, counselling and support with housing and benefits. Over the next nineteen years they grew into a multi-million pound company, with eleven centres, and more than 400 staff – all of whom are now being made redundant. The knowledge those workers have – and there are no questions around their abilities, skills or commitment – are at risk of being lost, and the workers themselves at risk of being seen as ‘tainted’ by association with a ‘failed’ organisation.
The key focus of blame was on the fact that KidsCo had failed during its 16 years to build up any reserves of cash, to get it through when other funding (whether they be grants, contracts, donations) had failed to materialise. Records show that trustees had been warned time and again about the need to build up such reserves, but they failed to follow that advice. Without such reserves, many charities simply fold at the end of a grant, or ask their staff to work without a guarantee of being paid until funding comes through (something that appears to have happened at KidsCo). If funding does then come through as a grant, it is common practice for it to only be spendable on new activity. This means that any back pay owed could not come from that source. Failure to meet that proviso seems to have been the final straw for the government and various private supporters, and the end was nigh. It is virtually inconceivable that the managers and directors of the company were unaware of the restrictions upon spending.
But if that is all there is to it, where’s the story? Since the financial crash of 2008, charity income from government sources has dropped by 40%, according to the National Council for Voluntary Organisations, whilst other income has remained largely static. Thousand of charities have closed, including 7,400 in 2012 alone. Of those closures only Lance Armstrong’s Livestrong made any headlines.
There were complaints about some of the organisation’s practices – notably that some young people were regularly given ‘pocket money’ simply for turning up, and that sometimes, they then spent it on drugs. While handing out physical cash is unusual, except for reimbursing travel costs, the giving of various ‘gratuities’ is commonplace, usually as vouchers. Which can then be sold for cash or drugs anyway. Whilst not exactly ‘best practice’, this is a minor issue.
The difference with KidsCo is, largely, the figure of Camila Batmanghalidjh herself. As a photogenic, paternalistic, philanthropist from a wealthy background, she was the perfect figure to promote Gordon Brown and (especially) David Cameron’s ideas around ‘social entrepreneurship’ and the big society. Her high profile status pulled the cash in, but also brought her (a quiet) distrust from many within the sector. Her defence of how KidsCo was run will bring do nothing to solve that disquiet. Whilst it is perfectly defendable to insist on supporting those in need without worrying where the money is coming from until later, it is a strategy that is bound to come a cropper at some point. To complain that you haven’t been given money to provide a service you didn’t know you were going to provide is not one that will win sympathy from most potential funders.
More concerning is Batmanghalidjh’s claim that in sixteen years they had never had a single safeguarding referral (for concerns around physical and sexual abuse and exploitation). This is frankly unbelievable, and looks as if staff and/or management were deliberately not looking for any issues that might threaten their fundraising. As such, it lends significant credence to the claims that have come out since KidsCo’s closure, concerning significant safeguarding issues, and the abuse of both clients and staff. Whilst the claims currently being investigated concern 2008-2012, there have been similar complaints going back years earlier. Clearly this is unacceptable, in complete contradiction to the organisations supposed ethos and policies. More significantly, it also placed both workers and clients in danger, with instances of staff being physically attacked reportedly being brushed under the carpet, and not ‘escalated’ into police action.
Simply a badly run company?
On one level, that would appear to be that. KidsCo was a worthy but badly run organisation headed up by a uncontrollable figurehead. But its closure isn’t just a tragedy for the thousands who used their services, it’s an indictment of how charities are all but forced to run in neoliberal Britain.
The old fashioned view of a charity raising funds from well wishers to spend on worthy causes is mostly long gone. Today most charities income comes from either grants, contracts or selling goods and services. They are service providers, selling their services to local authorities, health authorities (as was) and local schools. Sometimes these are genuinely supplementary, innovative, services, but more commonly they are competing with other charities, or even statutory bodies, to fulfil governmental contracts. Often they are competing against bodies which used to be statutory, but have now been hived off and turned into charities in their own right (this is especially true in regard to young people).
As such, they can, without very strong clear governance, become another arm of the state, with a nicer glove and a sweeter smile, but still changing their ethos and operations to fit in with government agendas, rather than driving through an agenda of their own. They also come with extremely close (and if it is EU based funding, mind-bogglingly confusing) monitoring and oversight to complete, that drives up the administration costs, which, even though vital to the successful running of any organisation, puts regular people off donating. Such statutory funding still, despite the cuts, makes up around 40% of charities’ income. Together with sales of goods and services elsewhere, it now accounts for the majority of charity income. Not only does this divert resources to such trading, it also works against charities sharing ideas, tools and practices as they used to.
The other (more ‘honourable’) option is towards grant funding – usually from the Lottery or a major charitable trust, such as those real old Victorian philanthropists, the Getty Foundation, or Carnegie Trust. This now amounts to around 10% of charities’ income. While these give vastly more leeway in what a charity can do, they are still closely monitored and it is common for charities to bend their aims in order to fit funders’ requirements. And unless you a very, very, lucky, they will have fairly strict targets and ‘outputs’ which must be met in order for funding to continue. As a rule, they also require you to show your ‘exit strategy’ and ongoing sustainability once the grant has run out.
Now having good monitoring and an exit plan is a good idea (it allows you to check how you are progressing, makes the sharing of good practice easier, and lets you carry on providing services) they aren’t the be all and end all. By their very nature some of those ‘outputs’ (eg ‘20 young people have a better understanding of personal finance’) are inherently vague and debatable, they can seem, and can be, simply waffle to pretend you have done more than get some bums on seats at a course or event. They become something ‘expert’ bid writers know how to create, whilst smaller, non-professionally led, charities get cut out. And this has played a significant part in the ‘professionalisation’ of charity, removing it from the local communities, and local people, that were often the bedrock of smaller groups.
KidsCo managed to avoid much of that – they took in young people with ‘complex needs’ from local authorities, but were otherwise not a provider of state services. They were one of the biggest beneficiaries of ‘star’ support – the band Coldplay having given them £8million over the years, and bought a building, which could be used for whatever the charity desired. The government funding they received was often (as in the final £3million) given without going through a normal grant application process (something that would have had you thrown out of office if it was done by Tower Hamlets council), and whilst it was restricted to specific posts and projects (eg a literacy worker) even these seem to have been loosely monitored. Indeed, many of the fundraisers and bid writers I know in the area were openly jealous of just how vague KidsCo seemed to be able to be. This gave them much greater freedom to carry out the work they deemed necessary, as and how they saw necessary – whatever works. In the hands of a well run organisation, this would be a tremendous boon, but in the case of KidsCo, it finally seems to have been giving them enough rope to hang themselves.
Following the collapse, 150 former clients, their families and staff marched on Downing Street, demanding a continuation of government support. We should support them in their demands that the monies promised to Kids Company will still be paid out to provide the support they provided, and that the workers be transferred to other charities to do so. Kids Company wasn’t the only charity working in Camberwell, Bristol, or Liverpool, there are many, less prominent, charities that should be given the funding and resources promised to the closed company.
Do we even need charities?
It has often been said by the revolutionary left, that we shouldn’t be supporting any charities, the work they do should be paid for by government. There is, of course, a lot of truth in this. Most of what KidsCo, and ten thousand other charities do round the country and the world, should always be met by government. The fact that thousands of children are being supported in crisis by volunteers, is a disgrace. The fact that much medical research can only be carried out thanks to private subscriptions, scandalous. The mere existence of food banks in the ninth richest country in the world a travesty. But it is no contradiction to campaign for more government funding, and support to a ‘worthy cause.’
And, even with a much better funded, more democratic, state, charities will always provide a crucial service for people who simply do not trust the statutory sector, for those whose problems may well have been caused or exacerbated by the statutory sector. For example, it was the charity Risky Business in Rotherham, who first exposed the levels of child sexual exploitation in the town, and they were able to do so precisely because they were not part of the statutory sector. Young people actually trusted them, and would tell them what was really happening, while the police, social services, and other bodies looked the other way, or were even complicit in the abuse.
Charities should be free to be charities, to actually provide services that meet a recognised need, that can innovate and challenge the state and the ‘normal’ way of doing things, and draw in people who do not, cannot, or will not, engage with ‘the state.’ But they must still be transparent when doing so, honest and straightforward in how they work. Kids Company failed to meet those standards, but its failure should not be used to cover for the fact that they were providing a crucial service to children and families the state has failed to provide for. Whilst Batmanghalidjh may, or may not, be missed, there is no reason to believe that anyone else is about to step in and make life any better for the thousands her organisation dealt with.