The determinants of charity misconduct

Abstract

Charities in the UK have been the subject of intense media, political and public scrutiny in recent times; however our understanding of the nature, extent and determinants of charity misconduct is weak. Drawing upon a novel administrative dataset of 25,611 charities for the period 2006-2014 in Scotland, we develop models to predict two dimensions of charity misconduct: regulatory investigation and subsequent action. There have been 2,109 regulatory investigations of 1,566 Scottish charities over the study period, of which 31 percent resulted in regulatory action being taken. Complaints from members of the public are most likely to trigger an investigation, while the most common concerns relate to general governance and misappropriation of assets. Our multivariate analysis reveals a disconnect between the types of charities that are suspected of misconduct and those that are subject to subsequent regulatory action. This study employs administrative data derived from the Scottish Charity Regulator (OSCR) for the period 2006-2014. It covers the population of Scottish charities over this period and is constructed from three sources: the Scottish Charity Register, which is the official, public record of all charities that have operated in Scotland; annual returns, which are used to populate many of the fields on the Register (e.g. annual gross income); and internal OSCR departmental data relating to misconduct investigations.