'Charities aren't very transparent - and that means they miss out'

The sector squanders the chance to learn from its mistakes, says Adam Rothwell, outgoing director of donor information website Intelligent Giving

Adam Rothwell, director, Intelligent Giving
Adam Rothwell, director, Intelligent Giving

If you pay too much attention to the charity news cycle, you might think that being transparent is easy.

All you need to do, it sometimes seems, is to publish your CEO's expenses in eye-watering detail, send out a PR person to say that you're committed to openness, and - well, job done.

But being a truly open organisation involves more than simply responding to journalists' phone calls. It means making a conscious decision to take donors' and supporters' concerns seriously. It means making information public by default, rather than assuming that it should be locked away. And it means - for some charities - making a fundamental cultural shift.

Since joining Intelligent Giving in 2006, I've seen abundant evidence that most charities simply don't understand this. A short example illustrates this point well.

In 2008, we published profiles of the country's 500 richest fundraising charities, based on their annual reports and reviews. But only one-third of these leading charities admitted to encountering any operational problems in their latest financial year.

This statistic ought to worry everyone with an interest in promoting good practice in the sector. Every organisation, no matter their size, will encounter setbacks at least once in a year. So the two-thirds of charities that failed to make any mention of this were, in my view, either deliberately whitewashing their achievements or it simply did not occur to them to tell the whole truth of their activities.

This is not a transparent attitude, and it also means that charities aren't performing as well as they could. If a charity - or any organisation - fails to be straight with its supporters, then it's missing the chance to learn, and learn a lot.
That's because being honest and open makes learning a lot easier, for two reasons.

First, owning up to failure means the charity itself will have to properly come to terms with it. When writing the annual report for Intelligent Giving, for instance, I realised for the first time that many of our difficulties stemmed from a single organisational source that we were subsequently able to put right. If we hadn't forced ourselves to own up in public to these problems, they may never have been addressed.

Second, openness gives your supporters the chance to influence the way you work. No single charity will ever know the best way of doing things, ever. Owning up to that, and being clear about organisational limitations, gives your supporters the chance to recommend ways for you to improve, potentially dramatically.

Although it's painfully trendy to admit this, the internet greatly magnifies the advantages that transparency can bring. The web makes it easy to communicate with your supporters - and gives them, potentially, almost infinite chances to help you.

Any organisation would be foolish if it passed up this opportunity.  But charities - which ultimately depend on their supporters for their legitimacy as well as income - simply cannot afford to let transparency's potential pass them by.

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