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When good governance goes bad, even charities can suffer

By 12th October 2016 Blog, CSR One Comment
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Third Sector magazine recently released its 2016 Charity Brand Index, which gauges public awareness of charity brands. It shows that even charities like Friends of the Earth can fall from grace.

 

Mcmillan Cancer Support took the top spot this year, based on 4,000 interviews conducted over the summer, pushing Cancer Research UK into second place after two years at the top of the leader board.

BBC Children in Need rose three places to third.

Big climbers included Refugee Action, which was up 48 places to 101st and the disability charity Scope, which rose from 94th last year to 62nd in 2016.

But a number of charities slipped down the rankings, some quite considerably.

These included the RSPCA, which fell from fourth to 17th, the blood cancer charity Anthony Nolan, which dropped from 48th to 63rd, Friends of the Earth, which fell 44 places to 112th, and the YMCA, which went down from 79th in 2015 to 144th out of 155 in 2016.

Respondents to the survey were asked questions to determine which charities they were most aware of, whether they trusted them, how likely they were to donate to them, whether they had seen them in the news or advertisements, whether they cared about their causes and whether they understood their work.

Trust in charities is falling

A survey conducted independently by Populus for the Charity Commission earlier this year found that a third (33%) of people have become less trusting of charities in the last two years. Only 6% said their trust in charities had increased.

The Populus report also reveals how trust in the charitable sector is affected by five ‘key drivers’:

– Ensuring that a reasonable proportion of donations make it to the end cause
– Being well managed
– Ensuring that its fundraisers are honest and ethical
– Making independent decisions to further the cause they work for, and
– Making a positive difference to the cause they are working for.

It says the sector’s performance across all of these key drivers has declined since 2014.

The Times newspaper reports (£) that the RSPCA’s fall from grace stems from concerns about radicalism and aggressive fundraising, and that it faces an exodus of members after becoming embroiled in rows over animal rights, prosecutions and badger culls.

Friends of the Earth, who’s ranking fell even more precipitously, has been in the news regularly in the last year over concerns about its fundraising tactics and the claims it makes about fracking.

It’s clear that from this that, whilst businesses can find their reputations tarnished by the decisions they take and their actions, so can charities.

In fact, it could even be worse for third sector organisations like charities because they are generally seen and present themselves as being more virtuous than for-profit businesses; the public rightly expects and demands them to be beyond reproach as a result.

Good governance and transparency are key

The outgoing director-general of the Institute of Directors (IoD) commented on the issues of good governance in the third sector in August.

He said: “Company directors have become used to more scrutiny over the years, and ironically some of the best governance is to be found at businesses in sectors which have the most difficult reputations, such as tobacco and alcohol. Charities, on the other hand, have been subject to less scrutiny because of their laudable goals. In some cases, such as Kids Company, this has arguably made it harder for problems to be exposed, meaning they grow unchecked under the surface.

“Third sector organisations can learn from the governance improvements, and also the failures, of business in order to improve the relationship with donors and beneficiaries. The level of scrutiny applied to the governance of corporations is increasingly being applied to charities. It is crucial that the public has faith that competent and knowledgeable people are overseeing these organisations.”

In September, the IoD also launched its 2016 Good Governance Report , which contains lessons for both businesses and charities.

But the basics are simple, encapsulated in the Good Governance – A Code for the Voluntary and Community Sector. It lists six key principles, which include behaving with integrity and being open and accountable.

We examine issues around governance in our Sustainability and CSR Performance Review, which is just as equally applied to charities and voluntary organisations as it is to businesses.

Submitting to external scrutiny like this is a smart way to identify potential problems and fix them before they negatively impact on reputation. Reporting publicly on the findings and committing to improvements all helps to boost confidence amongst stakeholders and garner public trust.

One Comment

  • Michael Roberts says:

    It is also high pressure cold calling which is notorious in some places.

    I used to have a high regard for Fiends of the Earth until a few years ago, Greenpeace likewise.

    Further I would never rejoin RSPB due to their going a bundle on climate change and virtually rejecting fracking.

    I failed to renew my membership of Lancs Wildlife trust for the same reasons

    similarly the political climate activism and opposition to GMOs of Christian Aid Tear fund etc means I have lost my enthusiasm for them too.

    The above mentioned charities were but not are, my prefered charities.

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