Nathan Hollow

Board Director - Head of Health and Social Care - Head of South West

PLMR's Nathan Hollow on the challenges that face the modern charity sector

I’m a staunch supporter of the charitable sector.  A monthly donor to three major charities, I strongly believe in the importance of charities and their vital role in society.  Every day I’m lucky enough to see first-hand the life-changing difference charities make to the lives of the individuals they support.

Yet following a summer where the charity sector has been rocked by scandal, and faced a hostile media spotlight, it is hard for even the most supportive not to question what has gone wrong in some parts of the sector.

MPs agree. As Parliamentarians return to the Commons following the long summer break, one of the newly elected Select Committees summoned the CEO’s of some of Britain’s biggest charities to defend their fundraising practices.

The Public Administration and Constitutional Affairs Committee – led by new Chair Bernard Jenkin MP, himself a charity Vice-President – launched an urgent inquiry into the conduct of charity fundraisers following a series of damning articles and investigations which appeared throughout the summer.

Unsurprisingly last Wednesday’s Committee hearing was an uncomfortable affair. The charity leaders called for a stronger code of practice, and greater sanctions for fundraising rule breakers. They apologised for the unacceptable conduct of charities, and admitted mistakes had been made in failing to monitor the actions of external fundraising agencies.

Given the focus on the sector, and with many shocked by the uncovering of some charity fundraising practices, now more than ever, the sector needs effective and proactive reputation management.

Fundamentally the charity sector is facing a crisis of public confidence, with public trust already at an eight year low.  For years charitable giving continuously increased and the sector faced little hostility from national media. That environment has now changed, and charities need to behave differently to adapt.

Already the sector is fighting to rebuild its reputation, with calls for greater regulation and an open letter published in the Sunday Times signed by 17 of the UK’s leading charities. They hope it will restore public trust in charities and, by extension, guard against a decline in donations.

This is a good start, but I believe there is now an opportunity for charity leaders to ‘step up’ and lead a fundamental reform of the whole sector, its regulation, and the way it communicates.

Here are three bold propositions for the sector to consider:

1. A single regulator – There are currently three separate bodies responsible for overseeing the self-regulation of charity fundraising activities – yet none of them were able to prevent the aggressive tactics of telephone fundraising agencies, or intervene when a charity hired private investigators to suss out the wealth of donors. A single body, with compulsory membership and stricter sanctions, could be an interesting proposition to explore. It could work directly with the Charity Commission and donors would be able to easily file complaints against charities that overstep the mark. In a sector with income of £68.61 billion a year, there would be a case for this body being statutory too.

2. Consolidation – Secondly, as the number of charities has exploded so too has competition for donations and we have witnessed aggressive techniques from some fundraising agencies. The Charity Commission lists more than 180,000 charities on its website. You could argue that this is too many, and that their proliferation – and the competitiveness between them – is starting to have a detrimental effect. Those with overlapping objectives and visions could consider merging, reducing competition and saving money on back-office costs.  This would be a difficult decision to take, and one which could likely lead to job losses, but as the recent merger of two cancer charities has shown, such a move can provide a renewed focus and sense of vigour for achieving charitable objectives.

3. Communication and candour – Thirdly, charities might consider overhauling their communications with donors, supporters and the public at large.  Many are already moving in this direction, but a greater focus should be put on transparency across the board. This ethos should be at the heart of all communications, perhaps alongside a ‘contract’ of how the charity will treat those who fund it. Clearly demonstrating where donations go and the impact they have is also key – and this includes highlighting what percentage is spent on fundraising, advertising, salaries and back-office costs. This information should be easy to find, and clearly communicated.

Charities enjoy much good will and have an opportunity to rebuild public trust.  That should start now and is something we can all support.

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