Harsh lessons charities must learn from in 2016

Last year was not a good year for the voluntary sector with a series of scandals, mainly affecting English-based charities causing damage deep enough to show up in public opinion surveys.

A poll from nfp Synergy last Autumn showed that across the UK trust in charities was at a nine year low with 48% saying that they trusted charities “a great deal or a lot”. This places the sector below small businesses, supermarkets and TV and Radio.

Significantly the figure for Northern Ireland is much higher, currently standing at 69%. This puts us in a stronger position because we can learn the lessons from our colleagues in England and act before scandals filter over here.

Charities, particularly in England, have not generally responded well to criticism, tending to go into defensive mode. There are clear issues around the communications strategies not just of some of the charities involved in adverse publicity but of the sector as a whole.

The real fat cats 

Over and above that, the nature of some of this adverse publicity suggests that some charities have lost their soul and 2016 should be the year in which they have the courage to address this.

Let’s examine some of the main issues that have dogged the sector in the past 12 months. In Northern Ireland and in the rest of the UK there has been persistent coverage over chief executive pay. This is an area where bad publicity has been exacerbated by poor responses from those under scrutiny.

Much of the furore stems from a fundamental misunderstanding of how charities operate. Many people still believe that charities operate on a 19^th Century philanthropic model: that they raise money, largely through public donation for “good causes” and so therefore every penny raised should go to the good cause and that charity bosses should be volunteering their efforts and not getting paid at all.

This is not how the sector works. Many voluntary sector organisations are large complex bodies, still more are delivering contracts paid for out of the public purse and do not rely on donations or legacies. In order to do this work effectively good general managers are required and they need to be appropriately paid in order to attract suitably qualified people.

There is no comparison between a charity boss who is paid say £75,000 per annum and the real fat cats in private business: earlier this week it was revealed that five days into the New Year, the average CEO of the top 200 companies in the UK had already earned more than the average worker can expect to in the next 12 months.

That is a scandal, reasonable remuneration for a charity boss is not.

What’s still missing however is a collective willingness by the boards of charities, all of whom are volunteers, to robustly defend the salary packages they award and to be totally transparent about them, publishing them in their annual reports, with a clear justification for the level set.

Founder's Syndrome

The second major issue is the fall out from the Kids Company affair.

Although this happened in London, there are many charities in Northern Ireland that need to learn the lessons from it.

Many charities are founded or else “owned” by charismatic, driven CEOs whose passion for their cause is all consuming. We all know of several examples of “founder’s syndrome” in Northern Ireland.

What is important in these cases, as with all charities is good, strong governance. CEOs are not members of the board, they are employees. Responsibility for the governance of the organisation rests with the trustees. They need to step up to the plate in every instance, and do their jobs, holding the organisation up to scrutiny and insisting on the highest standards of management and practice.

Where this does not happen an individual, often with the very best intentions, can inadvertently destroy everything they are trying to create, and the bad news for a board that sits back and lets that happen is that every single trustee will be legally liable for the carnage that ensues.

Charismatic leadership is great. Forensic oversight is essential. The best New Year’s resolution for any charity is to renew and refresh its governance.

Fund raising 

Fund raising techniques employed by some charities made for the most lurid headlines most notable of which was the tragic suicide of Olive Cooke, aged 92. After her death family members said she had felt besieged by a barrage of letters and phone calls from charities asking her for support. Apparently she had been receiving up to 267 letters a month and repeat phone calls from charities asking for money. The case prompted a government review into charity fund raising.

The case, and others like it raises issues around the ethics of fund-raising. Many of us have been pestered by calls after making a donation to charity, and we are accustomed to being accosted in the street by “chuggers”.

The Institute of Fund Raisers has an excellent code of practice in place, but is it working? Many charities resent these issues being raised but the fact is that public opinion, perhaps led by media coverage of isolated cases is turning against the sector.

There are two options here: to go into denial, or to collectively ensure the public rehabilitation of fund-raising organisations before vital causes experience worrying fall- offs in donations.

Most disturbingly of all in that context was the experience of Samuel Rae an 87 year-old dementia sufferer who ended up being conned out of £35,000 after a charity he donated to sold on his details to other organisations, which included unscrupulous companies that scammed him. The case is currently being investigated by the Information Commissioner.

Raising revenue is important for all charities. Selling data on donors is one revenue stream which should be discontinued, regardless of whether or not the individuals concerned have forgotten to tick the relevant box.

What the public want 

The Charity Sector Brand Index 2015 suggests some of the solutions. Those who have lost trust in charities say the top three things charities need to do to regain their confidence are to be more open about how they spent their money, to be more honest and transparent, and to stop "pestering or begging" people for money.

Crucially 84 per cent of respondents disapproved of "cold call" telephone fundraising, 77 per cent disapproved of door-to-door fundraising and 64 per cent disapproved of receiving addressed mail from charities with which they had no prior connection.

These are tough times but fund raisers need to meditate more carefully on the fact that there is a big difference between raising money for a good cause and selling double glazing. If the public cannot see the distinction they risk being put in the same category.

All these issues can and must be addressed. There is simply too much at stake for the sector to simply blame the media when the next scandal breaks.