"Recent Twitter and press interest in ratios and reporting have got me back on a subject which gets me hot under the collar; transparency.
Transparency is good! We should be open about good and bad, irrespective of how palatable the information is to our cause, our supporters, our staff or to us. Transparency, in a charity context, should be about nurturing understanding and offering choice. Stakeholders exercising choice helps hold us to account.
Currently I think the wider transparency agenda is being driven by popular opinion, meaningless comparisons and the desire to exercise control; this at best is counterproductive and at worst likely to cause significant damage.
Firstly, it’s important to recognise that when we talk about ‘the sector’, it is in the context of organisations of numerous wildly different forms, sizes and operations that we should be talking transparency. One size cannot fit all and we need to be measured in our debate not just leap to publish more data. This cry for more can drown the stakeholders in details that do not increase their understanding. This approach can facilitate bad practice enabling those who would wish to obfuscate; to wilfully be ambiguous and confuse. This approach leads us to try and win the unwinnable and risks wasting precious resources as we tie ourselves up in knots in the name of transparency.
Negative interest in what we do and why we do it rarely comes from a desire to understand or support. It’s often from a desire to dish the dirt, find fault, or silence charities who are speaking truth to power on a range of issues from the causes of the homelessness to the plight of refugees.
People have the right to hold negative views. We should try to understand their motivations and point them towards enterprises they can get behind. But we have a right to disagree and resist the incessant pressure for greater mandatory disclosures. Information given to respond to negative interest doesn’t remove the criticism; you won’t change someone’s mind on CEO pay if they don’t think charity chiefs should be paid, or make someone who doesn’t support charities become a donor. So much of what fuels support or lack of it comes from the heart and not the head.
We have a responsibility to report well – not just to comply – and make sure that the users can access, put it into context and make an informed judgement on whether to support us. That is much more than dumping information on the public. It is working with them to make what we do more accessible and useful.
Raw data cannot and should not provide all the answers; whether it is about pay, income, efficiency etc. It is the narrative that sits alongside it that aids understanding. What we disclose should help stakeholders ask questions, to deepen their connections with us, appreciate our achievements and identify where we need to do more. Publicising a fundraising ratio or how much you spent on governance can never do that!
Let’s change the emphasis and the focus.
Why not start with trying to tell our stories accurately? What do our stakeholders need to know to get a real sense of who we are and how we operate? That means explaining in financial terms, but charity is not all about the bottom line or delivering services ‘efficiently’. It’s about striking balances between competing needs of present and future beneficiaries. It’s about social change – which cannot always be efficiently delivered.
We should take the lead of organisations like Clic Sargent who are trying to share where they have succeeded, failed or had to adapt. Can we start with being willing to answer any questions that a stakeholder poses within reasonable boundaries of safety, security and privacy rather than putting everything in the public domain just in case?
It was the sector itself who drove the transparency agenda in the past and we should do so again. When CFG started over 30 years ago there was no framework for reporting – charities did pretty much what they wanted. CFG’s founders and members were instrumental in pushing for a framework – a statement of recommended practice (SORP) – which would set out reporting requirements. We’ve supported it ever since (I sit on the SORP committee.)
My final thought to leave you with relates to the role our regulators play in this conversation. I think they could help stakeholders see the wood for the trees, to help them find their way to the causes and charities they want to support based on their own criteria. Not by pitching different elements or charities against each other or fuelling false conclusions like there is a perfect approach to fundraising spend. But rather recognising that whilst one stakeholder might like local and volunteer led charities, another may want to support global ones. If our regulators can help stakeholders navigate to their chosen causes and value the criteria of others as different, not better or worse, this could help the public without compromising social change."
This article first appeared in Finance Focus, CFG's monthly magazine for members.
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