INSTITUTE OF FUNDRAISING: Let transparency be our GuideStar in the new year

Lindsay Boswell, chief executive of the Institute of Fundraising

As we enter December and thoughts begin to turn to Christmas and 2004, I can make a confident prediction for the next 12 months - we are all going to get fed up hearing the word "transparency".

This is going to become the great buzz-word of the next year. I don't mean the slide show of your next-door neighbours terminally boring holiday, or Marks and Spencer's latest attempt to regain market share in the clothing department. So what do I mean? Many outside the sector might well say, "here we go again. Using jargon instead of good old plain English. Surely what you really mean is honesty?"

Let's go back a bit. Over the past 20 or so, years most charities that fundraise to any appreciable degree have been vexed by the issue of how they report their fundraising and administration costs. A whole industry has developed around interpreting the accounting rules in a way that makes us look as 'efficient' as possible.

For efficient read 'no administration or fundraising costs'. We have all been mentally paralysed by the fear that we will not look as efficient as another charity. We have check league tables in our heads while regarding any form of them as the work of Satan himself.

Then we reach the new millennium and want the public and the world at large to wake up and recognise just how professional we really are, and that there are core costs to everything we do. That managing volunteers has a real cost and is even a profession in its own right.

We reap what we sow. If we were listed on the stock exchange and posted excellent results, but gave no indication as to where tomorrow's money was coming from, or if we totally failed to talk about the investment strategy we had put in place to ensure that voluntary income continued to feed the fantastic work we do, guess what would happen to our share price. It would collapse.

One sector is only interested in reporting success today. Another is more interested and anxious to know where tomorrow's success comes from.

So why is transparency the big thing in 2004? Two reasons. The Standard Information Return (SIR) and GuideStar.

GuideStar and SIR

The SIR, judging by the draft example in the Strategy Unit report, will require you to report on your fundraising costs over one year and over five years. It will require you to explain these costs. GuideStar, will almost certainly provide a website platform that will allow anyone to compare these costs between any charities they should choose. There won't be a league table; there will be 60 million of them!

I think this is brilliant. We have an opportunity to rectify the mistakes of the past 20 years. We have the chance to agree a common way that these costs can be reported. We have a chance to end up with a public that understands the headline issue, that it costs to fundraise and that these TV fundraising nights that claim that all your money goes straight to the needy are not telling the full story.

But, and there are some pretty huge buts to this, we need to have a totally clear and consistent way to calculate these costs. It mustn't be left up to creative financial wizardry. Both the Institute and Charity Finance Directors Group are working on trying to bring pressure to bear on this matter.

Additionally, we all must stop talking about figures in isolation. Fundraising isn't about raising money, it's about the difference that money makes.

If we end up with a society that measures charities by the quantity of its fundraising costs rather than the quality of what it does with the donations, then we have lost it.

So, when you see some consultation event or other around the SIR or GuideStar then get involved. We must have a way of calculating fundraising and administration that is consistent and prescriptive. And if we have the SIR before that is in place then we risk a great deal. We must be able to add to the GuideStar site the stories about what our causes do, how they have made a difference and why we need to carry on or increase our efforts.

Organisational members of the Institute will hear lots more about this over the next 12 months. For more details about how your organisation can get involved email policy@institute-of-fundraising.org.uk.

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