Almost seven years after the spectacular collapse of Kids Company, the truth about what happened then is not widely enough known. A report from the Charity Commission released last week ought to have cleared things up. But by emphasising a technical finding of “mismanagement”, while downplaying the comprehensive vindication of the charity’s trustees in the high court, the commission has pulled its punches – perhaps for fear of offending the government, which spent £9.5m in a failed attempt to get Kids Company’s trustees and CEO, Camila Batmanghelidjh, disqualified as company directors.
The problems at Kids Company identified by the Charity Commission and others must be treated seriously. The charity expanded rapidly, with expenditure rising from £2.4m in 2004 to £23m in 2013, and arguably did not pay enough attention to the risks such growth entailed. Had it built up larger reserves, it might have been better able to withstand the storm that broke when allegations that it had 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 trustees may have been limited in the forms of challenge offered to their charismatic chief executive and main fundraiser.
But compared with the charge sheet 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 the charity’s favour, was that Kids Company was dysfunctional if not rotten, and needed to be stopped from doing the social welfare work with which it was entrusted, by ministers as well as civil society (the charity won £42m in government grants over a 15-year period). When a committee of MPs looked into what had happened in 2016, their report largely stuck by this version of events, blaming the “unaccountable and dominant” Ms Batmanghelidjh for the charity’s woes.
Several years on, it should be obvious that Keeping Kids Company – the charity’s full name – never deserved to become a byword for poor governance and shoddy practice. Its trustees were praised by Mrs Justice Falk, who also noted Ms Batmanghelidjh’s “enormous dedication”. The charity’s unconventional methods, including cash payments to some of those it supported, were not a panacea. The organisation was too reliant on one personality, and its geographical expansion to Bristol and Liverpool was arguably overambitious.
But this was an ambition egged on by a government firmly committed to increasing the role of the voluntary sector, while shrinking that of the state. Ms Batmanghelidjh was a social entrepreneur. And her treatment can be viewed as a kind of punishment. At a time when demand was rising due to cuts, she inadvertently and inconveniently exposed the weakness of social services outsourcing.
There are important lessons here, not least about the vulnerability of charities to unproven claims. Kids Company bears some responsibility for accounting mistakes, and the way in which its sudden collapse left vulnerable people in the lurch. But the danger arising from the commission’s reluctance to be clear about the extent to which Kids Company was vilified wrongly is that the sector overall ends up weaker – with its appetite for innovation and supply of willing trustees reduced. At a time when council-funded social welfare provision – including vital mental health services – is dangerously limited and hard to access, this is a grave risk to take.
