Trust Matters

“Trust Matters”. These are the bywords of the Charity Commission for its recent report on public trust in charities, issued in July.

Given the coverage earlier this year of charities working internationally, in particular, reports of sexual abuse and exploitation involving Oxfam and Save the Children, culminating in a damning Parliamentary Inquiry and Report substantiating the failings of household name charities, it is not hard to conclude that trust, does indeed matter. It is reported that Oxfam will lose up to £16m in income, putting both jobs and assets at risk. As well as cuts from Government funding, it estimates having lost approximately 7,000 donors. Save the Children UK estimates a loss of up to £67m in 2018.

What did the Commission find?

The Commission’s report, based on research carried out by Populus, makes key findings:

• Charities need to demonstrate good stewardship of funds, to live their values, and to demonstrate their impact, crucially by showing how donations reach their end cause.
• Trust affects donor behaviour, which is largely unsurprising.
• Overall trust in charities remains broadly at the level in 2016.
• Charities are more trusted than most institutions, for example private companies, banks, and politicians, but less trusted, however, than the average man or woman in the street.
• The Commission is seen as necessary, and effective.

In need of repair

Overall trust in charities stands at a score of 5.5 out of 10, which is compared to the 5.7 score achieved when the Commission last carried out a similar survey in 2016. This must be taken in the context of a steady average of approximately 6.6 for the ten-year period up to 2016. The downturn is coupled with the worrying revelation that charities are now considered less trustworthy than the man or woman in the street.

The 2016 research was of course conducted in the aftermath of press coverage of charities carrying out aggressive fundraising practices, and trading activities aimed at elderly, or vulnerable donors and beneficiaries, which also happened to coincide with the collapse of Kids Company. There is now a revamped Fundraising Regulator, a new Charity Governance Code and legislation in force designed to make Charities more accountable. Yet, there seems to have been little recovery in terms of trust.

Lessons for charities

The report highlights a need for charities to show that they are in control of their funds, as well as their staff, and that they can demonstrate their impact. There are practical steps charities can take to ensure they protect trust. Examples we recommend include:

• Understanding, and keeping under review a charity’s objectives and who it is supposed to benefit.
• Ensuring a charity protects its beneficiaries, and not just its brand or reputation.
• Ensuring trustees understand the full extent of activities being carried out and are fully informed of the charity’s risk assessments. They should be able to challenge these if necessary. They should not be passive.
• Not taking unnecessary risks with how assets are used, or how funds are raised, if this will damage confidence in donors and beneficiaries.
• Complying with specific rules, and guidance regarding fundraising, trading and partnering with businesses when fundraising (commercial participation). In particular, trustees and management should be familiar with the Commission’s guidance on fundraising (CC20) and trading (CC35).
• Having clear agreements in place when collaborating or contracting with other charities, and non-charities, particularly where this will involve the charity’s name or brand.
• Reporting on activities in a clear and accessible format that everyone can understand.

The Commission’s full report can be found here