Charity does not come free, and we should explain why

Transparency is not just about disclosing figures - the sector must also help supporters understand what it takes to run a modern charity, writes Caron Bradshaw

More information does not mean greater transparency and understanding, writes Caron Bradshaw
More information does not mean greater transparency and understanding, writes Caron Bradshaw

My chair, Ian Theodoreson, caused a bit of a stir when he said at the launch of our recent report, Managing in the New Normal, that the general public's view of charity was "extraordinarily disconnected" from reality. He said we largely have ourselves to blame for this because we persist in playing down the amount we spend on salaries, overheads and running costs.

It's a hard message to hear, but I agree. In my January column I said that we were facing our greatest challenge; we could safely expect media scrutiny and criticism to become the norm. Our latest survey findings support this sentiment. A massive 87 per cent of our respondents felt that negative media attention would continue to increase and, as a result of that view, nearly half of them had enhanced their efforts on transparency.

But what is transparency, and is this what lies at the heart of the disconnect Ian spoke of? To me, disclosure of information is but one part of the story; another is the narrative we choose to assign to it.

One particularly significant element in charity transparency is the trustees' annual report and accounts, governed by the statement of recommended practice. When the Charity Finance Group was set up 27 years ago, charities were pretty much free to report as they saw fit. Now, by contrast, we are on the verge of Sorp 2014, a statement comprising two lengthy documents covering a multitude of topics that reflect the diversity of our sector. Yet the general understanding of "charity" does not reflect this reality.

The average person in the street will think of charities largely as voluntary organisations. As Ian put it: "For a significant proportion of the public, their understanding of charity is of the volunteer working in a charity shop or raising money for good causes, with only the vaguest notion about what the 'product' is at the other end and how it is arrived at."

For many years we have allowed this image to be perpetuated. We've made disclosures clearly in the pages of our annual reports and accounts, but we've not changed the message. We continue to shy away from being open about what it takes to run a modern charity and from communicating our different business models for fear of alienating our supporters Ironically, in failing to be clear about who we are and how we're run, we bring about the outcome we're trying to avoid - alienation of our supporters.

Of course, this situation isn't all of our own making. Pressure to be efficient from both funders and government has driven us down a dead-end street, and part of finding our way back to the main road involves responding to that pressure in a constructive way. Efficiency is about using the minimum resources needed to bring about the required outcome - but no less.

When focus is kept on overheads, salaries or fundraising ratios and more disclosures are sought in the name of transparency, understanding is not improved. More and more information does not mean greater transparency and understanding.

As Kofi Annan said: "Knowledge is power. Information is liberating. Education is the premise of progress in every society." In the name of progress, let's couple disclosure with a new narrative. Explain "charity" in its many forms. We should not be fearful of shining a light on what we do, so let's start educating people about what it takes to make the world a better place and stop pretending that it costs nothing.

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