Anearly seven years after the spectacular collapse of Kids Company, the truth about what happened then is not well known. A Charity Commission report published last week should have clarified things. But by emphasizing a technical finding of ‘mismanagement’, while downplaying the charity’s trustees’ full vindication to the High Court, the commission fired its shots – perhaps for fear of offending the government, which spent £9.5million in a failed attempt to get Kids Company directors and CEO Camila Batmanghelidjh disqualified as company directors.
The Kids Company issues identified by the Charity Commission and others should be taken seriously. The charity has grown rapidly, with spending rising from £2.4million in 2004 to £23million in 2013, and arguably has not paid enough attention to the risks that such growth implied. Had he built up larger reserves, he might have weathered the storm better that erupted when allegations that he mishandled reports of sexual abuse were made (police found “no evidence of criminality”). There was a lack of psychotherapy and youth work expertise on the board, meaning the trustees may have been limited in the forms of challenge offered to their charismatic chief executive and top fundraiser.
But compared to the indictment laid before the public (via the media), the courts, parliament and the Charity Commission, these are minor failings. The claim made in 2015 and never properly dispelled, despite a high court judgment in favor of the charity, was that Kids Company was dysfunctional, if not rotten, and needed to be stopped from doing the social care work it needed. was entrusted, by ministers as well as civil society (the charity won £42 million in government grants over a 15-year period). When a committee of MPs looked into what happened in 2016, their report was largely blocked by this version of events, blaming the ‘inexplicable and controlling’ Ms Batmanghelidjh for the charity’s misfortunes.
Many years later, it should be obvious that Keeping Kids Company – the charity’s full name – never deserved to become synonymous with poor governance and shoddy practices. Its trustees were praised by Mrs Justice Falk, who also highlighted Mrs Batmanghelidjh’s ‘enormous dedication’. The charity’s unconventional methods, including cash payments to some of those it supported, were no panacea. The organization depended too much on one personality and its geographical expansion to Bristol and Liverpool was arguably too ambitious.
But it was an ambition carried by a government firmly determined to increase the role of the voluntary sector, while reducing that of the State. Ms. Batmanghelidjh was a social entrepreneur. And his treatment can be considered a kind of punishment. At a time when demand was increasing due to cuts, it inadvertently and inadvertently exposed the weakness of outsourcing social services.
There are important lessons to be learned here, including the vulnerability of charities to unproven claims. Kids Company bears some blame for accounting errors and the way its sudden collapse left vulnerable people in dire straits. But the danger stemming from the commission’s reluctance to be clear about the extent to which Kids Company has been wrongly vilified is that the sector as a whole will eventually weaken – along with its appetite for innovation and the provision of voluntary trustees reduced. At a time when council-funded welfare benefits – including life-saving mental health services – are dangerously limited and hard to access, this is a serious risk worth taking.