1. Better fundraising regulation
We need better fundraising regulation. I have been writing about inadequacies of the current system since 2012. So the new regime of a stronger, better funded regulator with control over the Code of Practice is very welcome.
2. Trusteeship needs a revolution
The standard of charity trusteeship needs to be higher, both through better trustees and better practices. The code of good governance for the sector is at best treading water (though Northern Ireland has just relaunched its code), and at worst moribund.
3. Better media messages and spokespeople
The sector’s performance in the face of media stories has been patchy to put it mildly. When the big stories have broken the sector has been unable to effectively counter the accusations made against us. We need better messages and a breadth of articulate spokespeople.
4. Forget our good works
Because we are the charity sector, there is a tendency to believe that doing good works makes us different, and that we can operate to a different set of criteria to the public or private sectors because of this. We must never let the good work of the sector make us feel we can do things that other sectors wouldn’t be able to get away with.
5. Start the search for new funding
We need to start looking for new sources of funding and fundraising. The only estimate that I have seen, suggests an annual drop of around £2 billion after five years. That is a lot of money that charities won’t be spending on beneficiaries. So we need to start looking for new sources of income for charities.
6. Develop a thirst for scrutiny
We need a culture change in the sector in which we welcome scrutiny. We need to embrace criticism, not instinctively reject it, not least because it is one of the ways we understand the gaps between what we do, and how we are seen.
7. Create an Ofsted for charities
There have been many attempts to find a way to evaluate the performance of charities. We need a kind of Ofsted for Charities which would have a set of key criteria about how charities were working. These could include: governance, financial management, effectiveness of mission delivery, fundraising, communications and so on. It wouldn’t be perfect or easy, but it would be an improvement on the status quo.
8. Better charity metrics and clearer charity accounts
We need to provide clearer and better information to help people judge charities, both on how they spend their money and how well they do their job. This means changes to charity accounts, and also better ways of charities summarising the difference they have made. It also means a change in attitude by those who think that simple metrics are crass and inappropriate.
9. Get the message across about our good works
In apparent contradiction to the point above, we need to make sure that we are in the news for the amazing works that charities do. The media coverage of charities is divided into the terrible and the angelic, the former we have seen so much of recently. We need to find ways to make the coverage of the fascinating work that charities do normal, not exceptional.
10. Comprehensive stakeholder research
One of the weaknesses is that the sector seems to do little research in how different stakeholder groups see charities and the sector. We need some comprehensive research to help the sector know where it is going wrong and what it is doing right to rebuild public trust.
And wrapping it all together: Create a 10 year plan
During the last year, there was too much knee-jerk response by the sector to the media coverage. All the evidence is that the media and politicians will continue digging for dirt for the foreseeable future. This means there are no short-term fixes to the situation we are in. We need a 10 year plan to tackle it and not a series of sticking-plaster solutions.
This is an edited extract from Joe Saxton’s blueprint for restoring the charity sector’s reputation report. For the full report please download from our website along with over a hundred free reports and presentations.
Joe. As ever insightful.
Joe. As ever insightful.
My fear is that there is going to be a crisis amongst our boards soon as governance expectations increase. The current reality is that we often have very well intentioned volunteers, but they often don't fully understand what's required of them and the obligations that they are expected to meet.
I've also long desired for accounting practice to improve and provide a clear benchmark for charities performance. We really do need a set of criteria against which charities are assessed that considers the difference between charities that rely on fundraising income to those who have largely statutory contract or trade income; return on investment against income agreed income streams, impact evaluation and an cost per impact analysis. Whilst other new benchmarking websites have come (and gone), financial reporting to Companies House and the Charity Commission is the consistent reporting tool across the industry and it's about time the two bodies took the bull by the horns and consult with the sector to identify a clear set of indicators. I know it's a minefield but submitting an annual report is already the one yardstick that all charities have to adhere to.
I rather suspect too that the numbers of charities should be pruned. May be a criteria to establishing a new Charity should be evidence that partnership working has failed and similar concerns have not been able to work together towards common objectives. The administrative costs of running all of these small organisations must be a greater cost than the time involved in working in partnerships with existing organisations. May be larger charities should start working as NHS Trusts have done in facilitating various Fund Accounts for a range of networks and causes within the broad scope of their objectives. May be funders could relax their application criteria so that charities could apply more than once for difference projects if the application is from a Fund committee that is simply facilitated by the mother charity. Obviously protections need to be in place to ensure that funds have a time-span and don't exist for ever as an administrative nightmare like so many NHS Trusts.
Of course the risks of the current environment is that in a context of public expectations that everyone should work for charity for free and no one deserves a business-equivalent wage, the costs of managing and governing a charity is likely to go up in the coming years. Oh the conundrum!
May be some of this exists. I'd be happy to know more if others have come across better examples.
The Giving Business www.giv.biz
Very good article and good
Very good article and good points. However, I disagree with point 7. Why would be need another body to control charities - who is going to pay for this? What is Charity Commission's role in that case? Prehaps Charity Commission needs to be reformed?
I don't agree with the
I don't agree with the concept of Ofsted for charities, I don't think that more bureaucracy tightening the freedoms of charities to operate in their own style is the answer. Everyone knows that Ofsted is not even a great way of scoring schools performance, let alone using this to judge a charity. If a charity should be regulated, why would it not fall to private businesses to be regulated too? Don't we all have a duty to operate effectively? The truth is, creating regulation for either creates an awful lot of hoops. We would deregister as a charity and move to being a C.I.C. if this occurred. Mainly because the money, time and energy spent serving inspections, preparing for them and what not could be better spent on frontline services. I also think that this is a knee jerk reaction to a handful of badly managed charities, whom saw the consequences of their actions (it shut down the whole of Kids Company). What we see everyday is thousands of charities now being made to jump through hoops at the hands of a small bunch of feckless trustees and CEO's. Bad senior management exists in every sector, but we need to stop creating wide sweeping changes just to wipe out the small few, instead focus on the existing and robust models of trusteeship that if we work (which most of us do) would prevent any erosion of trust to the sector.