Last month’s revelation that alcohol charities were receiving funding from drinks companies was no great surprise. Charities always walk a tightrope on funding. If they take money from alcohol companies, people say there are influenced by them. If they take money from pharmaceutical companies, people will say there are influenced by them. The list of corporate villains from whom charities should take nothing is almost endless in the eyes of many.

However, we do charities a disservice when we assume that funding from a corporation will corrupt them. We also are naïve if we think that charities are independent of funding pressures as long as they avoid corporate support. The reality is that all sources of income bring the potential for compromise and coercion. Grant-makers want innovative new projects, government wants delivery of its services at a knock-down cost, individuals want charities free from admin and fundraising costs and companies want every ounce of influence their PR pound can buy.

My view is that all sources of income (except possibly an endowment) put pressure on a charity to behave in a certain way. The solution is not to reject any specific source of income, but to have mechanisms to insulate the charity from being influenced by the pressures of any particular funding sources. I advocate a balanced set of axes to grind!

So how should a charity behave if it wants to generate income and maintain its credibility?

When a charity’s funding sources and their activities are potentially in conflict, there are three potential positions: don’t do the activities, don’t take the funding or have clear guidelines. There are charities who take each of these positions.

Drinkaware, which is largely funded by the drinks industry, focuses on ‘the facts about alcohol’ and doesn’t get involved in policy or lobbying about issues like the minimum pricing of alcohol. It has ameliorated its activities.

At the other end of the spectrum is Amnesty, which doesn’t take money from government. Period. Given that for charities in the UK money from central and local government is about a third of all income over the last decade, that is quite a chunk of revenue to forego. For Amnesty however, the clarity of not taking money from government allows them to never have to worry about being influenced by government through the backdoor of pressure on their funding.

In between these two extremes are those organisations that will take funding from sensitive sources, but aim to not let it compromise their activities. WWF have long had a policy of ‘constructive engagement’ with companies, aiming to work with those that are interested in reducing their environmental impact or whose behaviour is ‘best in class’, or striving to be so. Save the Children were accused of not criticising energy companies a few years ago because they got funding from them. It certainly isn’t just alcohol charities for whom this area is highly sensitive.

The area is made yet more complicated by the fact that funding comes in many guises. As an example, the alcohol charities were criticised for taking money from grant-making trusts which allegedly had links to alcohol.

There are three simple guidelines I would offer any charity wanting to take money from as many sources as possible without compromising integrity:

• Have a very clear policy on how you make decisions about who you take money from. Create guidelines before any particular source of funding is on offer, so that the guidelines aren’t swayed by a particular lump of money
• Have a very clear policy on transparency and how you will make sure that nobody can say you are trying to ‘hide’ your sources of revenue or not be clear about conflicts of interest
• Have a very clear policy on how your campaigning and policy positions are insulated from the interests of any particular funder

It’s perfectly possible for charities to take income from sensitive sources and campaign freely. The key is preparation and clarity beforehand to avoid panic and confusion afterwards.

A note-worthy effort? Or pound-ing your fist in frustation? Let us know your thoughts below.