Finance: News analysis - Is it time for truth about charities?

Recent surveys show the public trusts charities but doesn't know how they're run. Mathew Little reports.

Voluntary organisations concerned about their long-term future will have gleaned a frail sense of reassurance from recent surveys of public attitudes towards them.

An opinion poll conducted by the Charity Commission found that the public had an "inherent belief" in charities but scant knowledge about how they actually worked. Some 79 per cent of the public felt most charities were trustworthy, but 69 per cent admitted that they did not know much about how they were run. Only 7 per cent knew that Eton was a charity.

An Acevo report published two weeks ago concluded that public faith in charities was based largely on myths and that people have "unrealistically high" expectations of charity leaders. It may also unnerve some that, according to statistics in the Acevo report, the most trusted people in society, aside from charities, are Richard Madeley and Judy Finnegan.

But is it any comfort to be liked if people don't know the 'real you'?

The question might be dismissed as pointless introspection if charity sector leaders were not about to embark on a mission to explain the 'real you' to the public.

Increasing public trust

The Charities Bill, currently before Parliament, gives the Charity Commission a new public affairs role with the objective of increasing public trust and confidence. One of the NCVO's new 10-year strategic goals is to "develop a better understanding with the public about what our sector means and what it brings to modern society". The ImpACT coalition has been set up to educate the public on issues such as investment in fundraising and the salary levels of chief executives and directors.

The dilemma for charities is that, in dispelling myths, this movement could also dispel the fragile public trust in them. In Acevo's report The End of the Affair? commentator and consultant Richard Reeves expresses the Catch 22: "What might be the result of this improved understanding of trust? Is the long-term aim properly grounded trust based on an accurate picture of charities and a fuller understanding of their cost bases and activities? If so, it must be recognised that there will be an interim period, a trust penalty in the short term for longer-term gains.

"Exploding the mythology of charities' work poses a moral dilemma for the sector as a whole. If trust is so brittle, should it be preserved at all costs?"

Joe Saxton, chair of the Institute of Fundraising and an adviser to the ImpACT coalition, accepts that there are dangers in enlightening donors about the fact that the homespun little charity they thought they were supporting is actually a £100m organisation that pays its chief executive £80,000 a year. "There will be pain before there is gain," he says.

And he concedes that charities' determined silence on the subject of directors' salaries or fundraising expenditure is not based on paranoid delusions. "A charity that wanted to advertise the salaries of its senior staff and tell the public how every aspect of its fundraising activities stacked up - if it did it alone, it would lose out," he says. "So it's never in a single charity's interests to really communicate the hard issues."

Why do it then? The answer may be that the comfortable status quo, where the public are happy to let charities get on with the job without scrutinising what actually happens to their donations, and where charities are happy to play along with old-fashioned myths, won't last forever. One of the arguments of the Acevo report is that the deference of the public towards 'official voices' is dissolving - on the question of the MMR vaccine, the public trusted Richard and Judy far more than the General Medical Council. Charities, especially large national brands, will not be immune from this.

And if people feel their trust has been betrayed, the reaction can be extreme. Singaporeans sprayed the word 'liars' on the walls of the head office of the National Kidney Foundation earlier this year after revelations about excessive salaries and gold-plated office bathroom fittings.

"There is an external environment pushing organisations to be clearer about what they've done," says Andrew Hind, chief executive of the Charity Commission. "The supposition is that, as people become increasingly sophisticated in their demands about what public organisations do, trust in charities will decline if they don't do something to be more transparent."

There are signs that some of the sector's biggest names are taking notice.

The NSPCC has produced a brochure demonstrating how its direct mail programme works, and Oxfam has published The Art of Self-Defence to help volunteers and staff counter accusations that it wastes donations. "The best charities are beginning to say that we can talk about this," says Saxton.

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