It is annual report-writing season, and you are no doubt in the middle of welcoming auditors to your organisation to sit and pore over the financial accounts for the year.
You are possibly beginning to think about what you might write in terms of success and achievements, but are you thinking about your annual report as an opportunity to build trust?
Trust is still a major issue for the third sector, given a tough few years of negative headlines that have put charities under the spotlight, but few are using the most obvious tool – the annual report – to rebuild trust.
At Street League, a charity where I was chief executive for eight years, we took the decision in 2016 to publish an annual report that talked openly about the 109 young people who came to us that year but we weren’t able to help.
It was a tough decision to be transparent about our failures and involved a lot of discussion with the board and key stakeholders: staff, young people and funders.
Despite these challenges, talking so openly about what hadn’t worked proved to be absolutely the right thing to do. The feedback we received was excellent, with people saying that our sincerity about what didn’t work meant they were more likely to believe us when we talked about our successes.
Last year we began to see other emerging examples of transparent annual reporting. On page 21 of Clic Sargent’s 2018 impact report, in a section called "Hands up, we’re not perfect", it talked about some of the challenges it faced. Catch 22’s 2018 impact review (published in January 2019) contained a dedicated section on "What we learnt". But these examples are still rare. Greater transparency should be the norm, not the exception.
A charity doesn’t have to be transparent about everything in its organisation, but you can make a great start by talking more openly about some of the challenges you faced during the year. Stakeholders should know that the work you are doing is difficult and complicated, that you need to take risks to find new solutions and that sometimes those risks won’t work out.
This shows that your charity is not just sitting idly by and working with the easiest to reach, but you are trying new ideas to deal with the issues you face. Talking more openly about the challenges is much better than presenting an unrealistic picture of 100 per cent success all the time.
Transparency is more important than ever. Millennials and the younger members of Generation Z expect higher levels of transparency than ever, and are adept at using smartphones to find out in real time whether they can trust you. The next generation of charity supporters expects more – and we need to respond now.
It is amazing to think that we have very rigorous procedures in place for reporting financial performance, but organisations can write whatever they like about social impact. This has to change.
This year I urge you to try something different. Celebrate the fact that the work you do is difficult and you didn’t get everything right. The goodwill and trust you build might surprise you.
Matt Stevenson-Dodd is founder of Trust Impact, a consultancy helping charities build trust through innovative impact measurement and reporting