Governance tip 7 – Be clear what transparency means to your organisation
Despite the frequent external clamour, the importance of transparency in charities is regularly over-stated. What matters is that the charity chair or chief executive has a clear understanding of what information is shared openly, and what decisions relating to this mean for your organisation in practice.
If, for example, your organisation chooses to take a large amount of public money to deliver what are effectively public services, then it is reasonable to expect to be treated like a public body, and to publish a level of information similar to one.
But if you are not funded by public money, it’s your call. You decide the right approach for your business, to achieve your mission, in the interests of your beneficiaries, and to satisfy your supporters and other stakeholders. Whilst charities should always be accountable for the decisions they make (such as being able to explain why they fundraise in certain ways) this does not equate to being 100% transparent (e.g. revealing all fundraising costs).
Transparency is not just about executive salaries and the cost of fundraising. It’s not even about revealing the number of safeguarding incidents. There are laws, rules and guidance to be followed, but being open about every piece of information is not a legal or even moral requirement of being a charitable organisation.
Organisations can succeed or fail based on the relationships between people, and it is not the case that open access to everything makes everything better. Opening up trustee board meetings to anyone interested sounds like an honourable idea, until it results in meetings becoming less effective, and all difficult decisions being taken furtively in corridors by small groups of trustees.
Revealing data about complaints or problems may be seen as worthy, but – with the obvious exception of serious incidents – sharing information publicly due to a sense of fairness can simply give ammunition to those with less honourable intentions. Time may be better spent learning from the problems to ensure that the organisation is better run.
Without trust, many UK charities will struggle to achieve their mission – it is difficult to help people who refuse your assistance because they don’t trust you. Charities need to work hard to build and maintain that trust, but an over-zealous focus on unbridled transparency will be less effective than taking and implementing good decisions, and remaining accountable for them.
So, spend an hour writing down the 20 key pieces of information your charity holds and the 20 key decisions that are taken on an annual basis – think staff, services, complaints, income generation, safeguarding, volunteers, trustees, finances. Then assign a level of transparency to each – such as public, all staff/volunteers, senior staff, trustees, CEO/chair. You won’t cover everything, but it will tease out a few tricky points, and give you a framework for ensuring the right level of transparency for your organisation.
This is one of a series of Practical governance tips for charity Chairs and Chief Executives