The question of public trust

Charity Commission considers its approach to increasing confidence in charities

Wildlife Aid
Wildlife Aid

At the Charity Commission's most recent public meeting, it raised the issue of its legal objective to "increase public trust and confidence in charities".

The aim, set out in the Charities Act 2006, is a difficult one to fulfil.

In a speech at the meeting, Dame Suzi Leather, the commission's chair, questioned whether one tactic it has employed might be backfiring.

She raised the issue of regulatory case reports - the latest of which looked at the charity Wildlife Aid - and said: "Case reports are an area in which carrying out our duty could undermine our statutory objective to increase public trust. Reading about allegations of wrongdoing by charities, when reported in the media, might undermine trust in charities."

Alastair Keatinge, a partner in the charities division at the law firm Lindsays, says the consequences of case reports are mixed. "You do learn a lot from the horror stories," he says. "But if there are unremitting stories of disaster, it gives a bad impression."

The commission has been looking for new ways to carry out its public trust and confidence objective, one of which has proved particularly controversial. At the commission's public meeting, Leather proposed a "good enough index" of the proportion of donated income that charities spend directly on their cause areas.

"I am under no illusions about the complexity of this, and it would not be a perfect index," she said. "But this issue is clearly front-of-mind for the public, so it should be front-of-mind for the sector too."

The suggestion prompted criticisms that the index would not reflect charities' effectiveness. It showed, however, that the regulator has made public trust and confidence a priority in the wake of a wide-ranging consultation on what its role should be, given the cut in its budget of more than a quarter from £29.3m in 2010/11 to £21.3m in 2014/15.

The commission has made a number of other suggestions for ways in which it could increase public trust. These include a smartphone application with which donors could look up charities' details and a more open approach to the data the commission holds on charities.

Keatinge, whose firm is based in Edinburgh, says the commission could also look to the Office of the Scottish Charity Regulator for ideas on how to increase public trust.

"The OSCR publishes inquiry reports on cases where it has used its statutory powers, because there is a legal requirement for it to do this," he says. "But there are not many reports on non-statutory inquiries into charities where there has been bad practice.

"Instead, the OSCR will group together a handful of case studies that address a particular theme, such as independence from public bodies, and publish them together in one report.

"Because that approach is addressing an issue, rather than singling out individual charities for criticism, it seems more positive and more likely to increase public trust."

It is difficult to measure whether publishing information that shows individual charities in a bad light has a positive or a negative influence on the public's perception of charities as a whole.

The commission has published six regulatory case reports this year, but it remains unclear whether new ways of making information public, such as the spending index, smartphone app and open data, will come to play a more important role than these.

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