The next wave of charity criticism: five questions to answer
Two years ago I wrote that, as far as criticism of charities goes, we ain’t seen nothing yet. Since then a 92 year old fundraiser who had received 466 charity mailings in one year killed herself, and a poorly governed children’s charity closed in sudden and very public circumstances. The fall-out from both has been considerable.
Even when press stories criticising UK non-profits are lacking in veracity they are typically hitting their target. But this upsurge of charity-bashing isn’t over yet. Here are five questions trustees and charity leaders would do well to know the answers to.
- Are your services worth the money?
With so much focus on how charities are run and how they raise their money, there’s been surprisingly little consideration of what it is spent on – and whether it makes any difference. It is only a matter of time before the quality of services delivered by charities comes under serious scrutiny – particularly where the services could be delivered by the state (health sector?), or where Government pays for things that some don’t want them too (advice sector?). In the shorter-term, the greatest risk lies with services where poor practice can easily be evidenced – the wrong information given in an email or over a (recorded) phone call. Once service provision is fair game, however, watch out for a tidal wave of criticism regarding money spent on service delivery. The costs of fundraising have long been scrutinised internally, but are your delivery costs really under control?
- Are you following your governing documents?
Compliance – with everything – seems to be the recent major worry of the biggest charities, but don’t forget your own Mem & Arts. (Remember them? The Memorandum of Association and Articles of Association that you only have as a PDF and always forget to take to Board meetings). The governing documents describe the legal framework for most charities, they are often long, complicated and out of date, and, significantly, they are public documents. Anyone can read them, and anyone with a vague understanding of charities can find a clause or two that is not being followed to the letter. 30-minutes spent reviewing these documents may be a sound investment.
- Are you willing to defend your reserves policy?
You can’t live with them, you can’t live without them, but the criticism for having too much money in reserve should always be louder than that for having too little (Kids Company notwithstanding). Information about reserves is public, and hiding large sums in designated funds doesn’t mask the fact that there is several billion pounds hanging around doing nothing in the charity sector in the UK. Spend it, or be crystal clear why you don’t intend to.
- Do you share data when you should?
Criticisms about charities and data in the last couple of years have generally been about selling and swapping it for fundraising purposes. Receiving a whole heap of junk mail will be put sharply into perspective when service user data ends up in the wrong hands – think mental or physical health service, debt advice, or survivors’ organisations.
However it is the lack of sharing of data which may become a more serious problem in future, particularly if an organisation designed to help people neglects to pass on important information due to misguided or illogical confidentiality policies or practices. It is one thing to apologise for a data breach, but quite another to be taken to court by the parents of someone who killed themselves after speaking to a confidential service that took no action.
- Do you benefit from Gift Aid and are you prepared not to?
If you give money to charity and you pay income tax in the UK, you are typically allowed to decide what the tax related to that money can be spent on. The increasingly vocal bunch who argue that this is morally indefensible haven’t had much traction yet with decision-makers, but with a new PM and referendum promises to pay for, I wouldn’t be surprised if the concept of Gift Aid soon faces some tricky challenges. Organisations reliant on Gift Aid income to balance their budgets could get a nasty shock. Take the money now, but have a plan to deal with – or argue against – its disappearance.
If you think you may need some help in answering these, or similar questions, please get in touch.