Expert view: The authentic shall inherit the earth

Mobile phone operators are currently facing the prospect of the EU limiting international mobile call charges. Banks are facing enquiries into their account fees.

Big insurers are fighting to prevent the National Pension Savings Scheme from taking their business. In each case, the lay onlooker might well say "serves them right". In each case, it seems that what appeared an untenable proposition in a changing world was ignored until it was (probably) too late.

So what is the possible outcome? The loss of profitable business at an inopportune time, with the risk that in the scramble to maintain profits they further harm their businesses with ill-considered reactions. And the consequence of that is diminished stock exchange valuations.

Charities are at risk from precisely the same sort of challenges. The sector is facing searching scrutiny from those who would support, use or abuse it.

For a charity, one possible measure of brand value is the maintenance cost of its donor base. A charity that can maintain income in real terms for a 5:1 fundraising ratio clearly has a better brand than one that has a fundraising ratio of 3:1. And the gain or decline in sector brand value might be measured by the aggregate fundraising ratio and fundraising income growth rate.

So how might a charity protect this most valuable of assets? The think tank nfp Synergy's recent survey of key words associated with charities hints at part of the answer - the way a charity conceives of and projects itself to the public.

Another pointer comes from the ImpACT coalition's work on steps a charity can take with others to improve the quality of explanations that donors receive. One key message from the public is that donors don't want to see professionalism; they want to see competent compassion. This presents charities with the challenge of how to focus their work and communications so that they seem authentic, attractive and distinctive. Getting this focus right across the sector is vital. It won't just protect existing income; it will enhance it.

It's worth considering the example of how the creation of additional brands bizarrely increased overall sales in washing powder. I imagine people's clothes weren't any dirtier. The lesson for the third sector is that creating authentic, attractive distinctiveness and communicating competent compassion ought to increase funds and brand value both for the sector as a whole and, perhaps more interestingly for individual charities, for sub-sectors facing such challenges first.

- Charles Nall is Corporate Services Director at the Children's Society 

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