Justified expenditure?
At times where cash is in short supply, what constitutes responsible expenditure for a charity is likely to be scrutinised ever more closely
Two cases threw the question into the limelight this month (see news review).
Heyday, the membership arm of Age Concern which was wound up in March after losses of £22m, brought possibly the most high-profile challenge to the age discrimination regulations in Britain. At stake was whether the default retirement age of 65 was lawful; and Mr Justice Blake found it was. He considered there may be grounds for moving the DRA upwards, but struggled to determine what would be a justified retirement age.
Two years ago the ECJ ruled in Palacios de la Villa that mandatory retirement was lawful if it was intended to open up the job market for younger workers; so it was no surprise that the judge would rule in favour of the government.
All this begs the question: should Heyday, which was clearly having severe financial problems at the time it decided to go to court, have even started down this road at all? Or does such action fall into the category of ‘essential campaigning’ (which does not always need to involve litigation), without which important changes in the law, such as the Climate Change Act 2008 Friends of the Earth campaigned so hard for may not have happened (see page 37)?
The issue is even more obviously troublesome in the case of Gill v RSPCA, where the High Court ruled that a £2.3m Yorkshire farm should be inherited by a widow’s daughter and not bequeathed to the RSPCA as stated in the will. This has put the animal charity in a rather impossible position.
Of course it has a legal duty under charity law to recover the gift, but with public sympathy and the general media clearly on the side of the daughter, and the judge commenting ‘that Mrs Gill [the legator] had “an avowed dislike” of the RSPCA’ and she ‘had been unduly influenced by her husband’, the fall-out could be very damaging.
The charity receives over 60 per cent of its fundraised income from legacies. Legal costs for both sides are running at £1.3m and if the charity has to pay the lot, this would be a very expensive piece of governance. The decision to appeal merely prolongs the agony.
Charities walk a tightrope when it comes to balancing the 'caring’ remit with making tough decisions to get something crucial done. The wrong sort of headlines for picking what could be argued as the wrong sort of battles are risks requiring very careful management.
Author: Clarissa Dann
Clarissa Dann was the editor of Caritas as well as an HR and management online service,he People Bulletin until July 2011.
She is now the editor of the specialist trade finance magazine, Trade and Forfaiting Review which can be viewed at www.tfreview.com but does write on charity finance and investment from time to time.
Clarissa has a background in legal and professional publishing, as well as business journalism and holds an MBA from
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