The charity sector must improve its transparency or risk being seen as less open than the private and public sectors, according to Sir Stuart Etherington, chief executive of the National Council for Voluntary Organisations.
At the NCVO’s annual conference in London today, Etherington warned delegates that all charities must be prepared to answer uncomfortable questions if the charity sector is to maintain public and political faith.
He was also critical of the sector’s efforts to be more open about executive pay.
He said he did not believe the negative media coverage of the voluntary sector over the past year had meant people stopped believing in charities and said it would be "crude" to assume all such stories represented hostility to charities – but they had created an increased willingness to ask questions.
"It should be obvious by now that refusing to answer questions, declining to engage and trying to fudge answers aren't going to make questions or scepticism go away," he said.
"Indeed, it will only make them grow louder. The only way to answer critics is, well, by answering them.
"You cannot hope to persuade everyone, but let no one accuse you of not being honest and open."
He said the trend towards demanding greater transparency was "inexorable".
Etherington said: "This genie is not going back in the bottle, nor should it. But we must be careful – whereas charities could previously have often been seen at the forefront of openness, we are in danger of being outpaced by the public sector and by publicly listed companies.
"We cannot afford to be seen as less transparent and accountable."
He said charities had made only limited progress on being open about executive pay.
He said charities had "a responsibility to explain what they pay and why", and he was worried about what the public would think if the sector failed to achieve such a simple task.
He acknowledged that such openness, as well as new approaches to fundraising, could mean extra costs and reduced income, but said charities had to do right as well as doing good to protect public faith.
"With the public faith go donations, status and political faith," he said.
"With political faith goes the possibility of delivering many public services to the standard that we know only charities can meet and, above all, the ability and the influence to make a real difference to people’s lives.
"It is not a gamble I am prepared to take for the sake of improving margins on direct marketing."
Etherington said it was the whole sector’s job to take action to protect those it served.
"If you see poor standards elsewhere, I urge you to take action," he said. "Because often the public don’t see us as separate entities. Other organisations’ poor practice can affect your organisation’s reputation."
In his speech, Etherington said the decision to replace the previous board of lawyers and civil servants with political appointees was understandable, but had led to perceptions of politicisation, unbecoming of a quasi-judicial body.
"We need now to find a way to address this and end it," he said. "The commission must move now from making the point that it has changed by sounding tough, to focusing on running as an effective, reliable regulator."
He was also critical of the anti-lobbying clause that will be introduced from next month into all new and renewed central government grant agreements, warning that the government was closing its ears to experts and the clause would lead to a waste of the money it was supposed to save.