The Charity Commission has just published the latest report in their series of independent studies exploring what aspects of public trust and confidence in charities.
The report, called How the public views charities, what this means for the sector, and how trust can be increased, summarises the findings of research carried out by Populus and goes beyond the focus of previous reports (which largely focused on quantifying levels of trust) to explore "what trust means for the sector, how trust relates to its success, and what charities can do to exemplify trustworthy behaviours".
The findings make interesting reading:
- Overall trust and confidence in charities has stood still compared to the last report in 2016, despite further reporting of charity scandals in recent months. The sector compares well with other sectors but a concern must be that It remains less trusted than "the average man or woman in the street".
- People continue to believe charities play an important role in society but they want evidence of impact and trustworthy behaviour from the charities they support.
- Levels of trust significantly impact on how likely it is people will donate to a charity.
- Key factors affecting the trustworthiness of charities including that charities need to:
A key factor in building trust appears to be that when charities can show that most of their donations go directly to the end cause, and that they are having quantifiable positive results, both trust and propensity to donate increase.
The second of these is encouraging and to be welcomed. Charities must do better at this to go beyond reporting how much they do to answer the "and so what" question; to provide evidence that what they do makes a positive difference.
However, the first key factor is worrying. Even in the wake of the collapse of Kids Company, and the recent safeguarding scandals, the myth seems to continue that charities can deliver high quality, safe and effective services on very thin (or even non-existent) overheads.
In my view, we need to re-educate funders and the public to think about value for money not in terms of how much of their money "goes to the front line" but rather "how much difference does my money make" (how much impact is delivered by their investment).
Focusing on maintaining the illusion of unreasonably low overheads encourages people to believe that the input (cash) is more important that the outcomes (the difference the services make) and discourages funders from providing full cost recovery funding (to cover all the overheads associated with a project and not just direct costs). Moreover, it encourages charities to be dishonest (or at least economical with the truth) when presenting their accounts and reporting on levels of support costs and overheads (which in turn, when found out, will impact negatively on trust).
Continuing to do better on clearly demonstrating impact must be an important way to shift the emphasis from inputs to outcomes. Even small charities can, and should, do much better at this, without spending significant amounts of valuable and scarce resources on new systems and extra staff.
It also needs some courage from charities of all sizes, particularly those with the loudest voices, to say "no" we can't run safe, effective services without sufficient overheads; no-one can, not in any sector. Those charities who claim they spend close to 100% of donations on the front line need to be called out as being, at best, misleading and, at worst, dishonest.