Charity, Self-help and Mutualism

Charity in Britain is much marked by the distinction between altruism and self-help. This reflects the two strands of 19th century activity: philanthropy by the well to- do towards the poor, and mutuality by the working classes for self-help. It is clear that in principle, students’ unions fall into the latter of the two categories.

Alongside charity, charity law and the Charity Commission, the whole movement of cooperatives, mutuals and friendly societies developed during the 19th century with its own framework of law and regulation, in particular the Registrar of Friendly Societies.

That whole tradition has not flourished in comparison with charity. But it does continue and in some respects is receiving renewed life and encouragement, with new forms like credit unions being created. But the fact that mutuality forms have not developed alongside charity has put pressure on charity law to accommodate forms of self-help. Inside this conundrum lies the nexus of the debate about Good Governance and Students’ Unions- self running political organisations of their members.

The changing attitude to governance in the wider world, emphasising the desirability of user representation on boards, has challenged the pure principle of the altruism of trusteeship. This is an example of the influence of trust law on charity. The principle that a trustee should not benefit from their trust is fundamental – the trustee is there to administer the intentions of the benefactor. It is not clear that the boards of unincorporated associations should be subject to the same self-denial.

As a matter of principle, the public does, as surveys demonstrate, attach a lot of weight to the value of voluntary trusteeship. Recent consultation by the Charity Commission has confirmed the view that trustees should not in general be paid. And the law has always allowed for exceptions where that is in the charity’s best interests.

Where one is dealing with the board of a substantial organisation, responsible for delivering complex services and handling substantial resources, it is essential that people with the right range of skills and time to commit to the oversight of the organisation are attracted. Otherwise too much is left to the chief executive and staff with too little oversight and accountability. This is one of the challenges for students’ unions- having all elected, all changing at once boards makes it hard to guarantee skills and scrutiny.

Self-help is an aspect of this. That organisations like housing associations benefit from having users involved in governance has become increasingly accepted. Charity law, influenced by the trust law inheritance, had some difficulty in reconciling this good practice with the principle of altruistic unremunerated trustees. It is perhaps a mark of the flexibility of the common law tradition that it has been able to embrace this concept, to the point indeed where the Charity Commission will in principle allow boards of trustees composed entirely of users, provided there are adequate arrangements to ensure that they oversee the charity in its best interest and not simply for their own benefit.

But that does not mean that initial worries around the Charities Bill can now be forgotten. Students’ Unions receive not inconsiderable amounts of their members’, and taxpayers’ money, to carry out activities deemed charitable only because of the link to the institution (in and of themselves they would be likely to fail the public benefit test). This means that it is vital that unions explore new ways to overcome some of the differences between themselves and normal charities- driving up the quality of “Governance” whilst remaining democratic and run by their members.

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