Closing down a charity


images (193)The closure of Kids Company has been written about by others much more erudite than I, in particular my friend Andy Winter wrote a very good piece yesterday. However the tragic story has reminded me of an earlier time when I inadvertently became involved in a charity that had run its course. Like Kids Company its CEO had lost the confidence of funders and in this case, also the confidence of most members of staff. Many of the Trustees were oblivious to the issues and even in a state of denial regarding what would need to happen next. In crude terms there are two ways for a charity to be wound up.

The first is for Trustees to go through the long and painful process of separating the parts of the organisation that remain effective and can be funded into the future, from those that are beyond help and are either so toxic, or so structurally flawed that they cannot be rescued. This activity depends on taking advice from Solicitors & Insolvency Practitioners, which inevitably costs money. The parts of the charity that can be saved can often be transferred into existing charities or even can be launched as new charities in their own right. Sadly the other parts need to go through the process of making staff redundant and ending services, often ones that are delivering vital support to vulnerable people.

The second is for professional insolvency practitioner to do all of the work above. Because they charge for their time it is clear that this second route is one that has much lower levels of success, if one measures success in terms of good causes well served. This is due to a mixture of reasons but one is that rebuilding broken organisations takes time and if time costs money, then an organisation without money won’t get very much attention or care.

The challenge for Trustees attempting to follow the first route is that they need to be new enough into the charity to not have a sense of dirty hands. However becoming a Trustee of a failing charity is not a good career move. Winding up a charity as a Trustee leaves one open to criticism from both the staff within the organisation, and the wider supporters from outside of the organisation. Doing so takes time and can only be achieved with support from funders, many of which donated money to serve the needs and some of which do understand that running a charity costs time and money.

My own experience of winding up a charity took 3 years of my life, working up to 25 hours a week at some points in the process. It was a minnow compared to Kids Company (we had a £500,000 turnover in 1999) but the outcome was a good one as many of the best parts of the old charity have gone on to do great things. However the public criticism, primarily from people involved in other charities was very difficult to handle. What was clear then and is no doubt the same now, is that most charities are neither perfect nor entirely flawed.  That the failure was not caused by one individual, and that there are probably many people who are already involved in the charity or who are on its periphery who could help avoid the whole ship going down. The best time for widespread analysis is when all the facts are known, that will not be this week or even this month! Let us hope that there are people within Kids Company board or nearby whose willingness to help out even at this stage could be harnessed to rescue the parts of the charity that are capable of being resuscitated. Companies of the size of Kids Company are complex organisations and whatever the failings, not all of the organisation will be beyond help. The final positive outcome might be several versions of Kids Company, each reflecting its own local setting, governed and managed locally, and possibly on a smaller scale than the current charity. There is a truism in that many of the children that were being helped by Kids Company, will not be reached by institutional bodies. As much as local Councils might want to pick up the pieces, some of the pieces will not want to be picked up by public sector organisations. Let us not forget why Camilla Batmanghelidjh was feted for so long by so many politicians, nor that she was no more than a strong figurehead for a great deal of hard work that was carried out by members of staff and volunteers who could potentially be part of the future for the young people they were helping until yesterday!

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About ianchisnall

I have a passion to see public policy made accessible everyone who want to improve the wellbeing of their communities. I am interested in issues related to crime and policing as well as in policies on health services and strategic planning.
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