The obligations charities owe beyond their own beneficiaries and donors

In a survey released last week on the State of the Sector, nfpsynergy’s research highlighted a really important issue. One of the questions showed that 85% of the sector believe demonstrating impact is key to persuading a cynical public. This finding comes from those working in the sector, for whom impact is a current issue. Supporters wouldn’t necessarily use that word, they might just want to know that their money is being ‘put to good use’. Even then, supporters aren’t wandering around thinking whether their money is being used as best it can, but with several big negative stories in national media about charities perhaps giving rise to concern, it’s not unreasonable to think more explanation of how charities are making good use of money would be helpful.

Some charities are wrestling with how best to explain what they do with the money they’re given. Are lots of facts and statistics helpful? Would publicly available monthly management reports, with reference to KPIs, help the public understand? Unlikely, and in a spirit of honesty, some reports can be pretty incomprehensible internally. But this is not a reason to stop trying. Maybe charities should ask their Comms staff to help write management reports as if they were being given to the media. And then … give them to the media… Or at least, publish them on their website. Why do donors have to wait for an Annual Report that’s six months out of date when the charity has monthly reports that are current?

Why do donors give? To support the cause, to support what a charity has asked them to support. So, if you’re a charity that helps animals, how have you helped them, in what ways have you helped? If you aim to prevent homelessness or debt, how much advice have you given, how effective has it been in preventing homelessness or helping people out of debt? If you help people affected by a health condition, how many people have you helped and how have they rated the help you’ve provided? On what basis do your Board judge success? How can that be explained for a public audience? If it needs ‘explaining’, perhaps you should revisit those management reports!

But explaining the good that charities do is only half the story. We also need to be much better at explaining why we do things the way we do, and why we are organised the way we are. And yes, that includes wrestling with the thorny issue of salaries. In a hostile political and media environment, battening down the hatches is a terrible idea. The same nfpsynergy survey also showed a large majority feeling “charities need to be more transparent about their use of money”. There may be some who feel they want to hide from public glare, but my sense is most prefer to be transparent, not just because they see it as the right thing to do, but because they don’t have anything to hide. If you can’t justify your own pay, or if your Board can’t justify the amount they pay the CEO, then ask why that is. The same nfpsynergy survey asked those within the sector about pay over ¬£100,000 and there’s a clear split whether such pay is justifiable. I think if a job is complicated and requires very specific experience and expertise, high pay can be justified, if there is also a lack of suitable candidates. But all those criteria need to be met and then, crucially, the performance needs to be closely monitored.

But if we believe monitoring the effectiveness of employees is important, whether on ¬£100,000 or much less, surely we need to monitor organisational performance for our donors, and our beneficiaries? And why shouldn’t the results of that monitoring be made public? Be transparent. Explain the good the money has done. Be clear on your aims. Explain how you are making progress towards achieving your aims (and where you aren’t making progress, explain why and what you’re doing to change things). We are brilliant at communicating a need, so that billions of pounds is given in support of charities every year. Is it beyond our capabilities to communicate what we do, how we do it, why we do it and how good we are at doing it?

All of this is important for our own donors and beneficiaries, but charities that fail to do so are not just letting down their own donors but the whole sector. The more charities that fail to live up to expectations, the bigger the risk of increased cynicism. Charities which are not transparent, clear about their impact and how they reward staff, are not just doing a disservice to their supporters and beneficiaries, they are letting down their peers in the sector. Some think that those charities which fall down in this regard may increase their own supporters’ cynicism about them, but not the wider sector. But I wonder whether the accumulation of charities that are less transparent, poor on impact reporting and failing to powerfully articulate their mission, vision and values, are risking an overall reduction of trust in charity.

First and foremost, charities owe it to their supporters to be open and honest, to explain what they do and what they have achieved, to live a “nothing to hide” culture throughout the organisation. But they also owe it to their peers, to set an example and be a “good charity”, because that reinforces the sector and increases confidence. Charities do amazing things, we change the world, we change lives for the better. Let’s prove it in public. All the time.

No person is an island, nor is a charity.

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