“I’ve always felt that it’s not a case of if a charity hits the headlines, it’s when,” says Helena Wilkinson, partner, head of charities and not for profit at Price Bailey. “A local scandal can be national news within minutes of it breaking. I tell clients they need to assume their charity will be on the front page at some point and they need to be prepared, because what really fuels public distrust in these situations is no comment from charities.”
Run an online search any day of the week and there will usually be a charity-related scandal. It’s not because the sector is inherently corrupt – far from it – but because, as Wilkinson points out, negative stories sell.
“There are several issues at play when it comes to public trust,” says Rui Domingues, director of finance and operations at the Charity Finance Group (CFG). “People want to know that their donation not only reaches where it was intended, but that it’s having an impact. And people want to see charities holding the high ethical and moral standards they expect from the sector.”
It’s easy to see just how quickly trust can be lost if charities fail – or appear to fail – in any of these areas. The three-year downward trend of charitable donations between 2016 and 2018 as identified by The Charities Aid Foundation after a period of scandal-dominated headlines is testament to this.In Wilkinson’s view, where many scandal-hit charities go wrong, is their response. Some attempt to cover up wrongdoings while others either don’t respond quickly enough or at all.
The Royal National Lifeboat Institution has been one of the few that got this right. Following allegations that a proportion of its donations were spent overseas rather than in Britain, the lifeboat charity responded quickly, and put out communications explaining the ethics of its international work – which accounts for just 2% of public donations. Its homepage was subsequently redesigned with a simple message: ‘why we want to end drowning worldwide’. It worked: donations surged.
Public trust in the sector doesn’t always correspond to scandals, however. Despite a huge uptick in the numbers of volunteers supporting local communities during COVID-19, and the 750,000 people signing up to the NHS Volunteer Responders initiative just two days after it launched, there hasn’t been a surge in trust levels. The latest figures from research consultancy nfpSynergy showed that trust levels in the sector remained flat during the pandemic, while other areas, including national and local government, saw a spike.
Cian Murphy, co-managing director at nfpSynergy, says the data was surprising, particularly as charities have been working “harder than ever” to support people and communities. “It’s reflective of how invisible charities have been over the course of the pandemic,” he says. “They’ve kept a very low profile.”
Domingues, however, points to the general trend emerging over the past few years, which shows that on average, trust levels are improving. “If you look at the Charity Commission data from June 2020, it shows that trust in the sector had increased.”
Even so, Wilkinson notes that charity donations have fallen in some charities during the course of the pandemic, quoting a 70% membership cancellation among some service-led charities. It’s hardly surprising: with so many charitable organisations having to close their doors and cancel in-person events, members have not been getting the same benefits, even though some were offering online events.
“Digital fundraising has come on an awful lot during the pandemic,” says Murphy, “but most of it has just been playing catch-up with other sectors.”
It’s clear the sector has a lot of work to do, engaging with its supporters. Some charitable areas will find this harder than others. The overseas sector in particular has been on a ‘downwards trajectory’ for years, which Murphy puts down to negative messaging. “Their message is usually, ‘everything is dire, everything is terrible’. We often hear in focus groups, ‘I’ve been giving to the overseas sector for 30 years and nothing has changed’.”
As a comparison, he points to the cancer sector, where the narrative is predominantly about progress. Charities such as Cancer Research UK and Macmillan Cancer Support will often mention improved cancer treatments, high survival rates and better life quality. “Charities have to talk about successes, not just the need.” WaterAid, too, has been on an ‘upward trajectory’ because of the simplicity of brand and the ‘power of storytelling’ – it has shown progress and demonstrated impact.
The need to demonstrate impact, says Domingues, is where annual reporting comes in. Annual reports are used to communicate a narrative to multiple audiences, rather than just presenting figures. “Using annual reports is the best opportunity to present a rounded view, which is audited externally. It’s all pulled together: key risks, the year’s performance, future aspirations, ethical considerations around pay gaps and climate change and, crucially, case studies to show the impact you’ve had on people’s lives.”
The ideal is to move annual reporting from a ‘print-first’ format to a ‘digital-first’ one. It would allow data and material to be presented in interactive, engaging ways, which would be accessible to multiple audiences. “Users could click through directly to the area they’re interested in, rather than being presented with lots of figures – yet the report would still be the compliance piece that our regulator needs.”
A digital-first format would partly address the generational shift that Wilkinson has observed around changing patterns of supporter behaviour. Older generations have tended to be long-term donors, donating through Direct Debit or Standing Orders, while younger generations donate more sporadically.
“There was almost an understanding back in the day, that if you had spare funds, you should be giving back to society,” Wilkinson explains. “But I’m not convinced the younger generation feels the same. And there’s now a sense that charities have to earn their trust and support. There’s a lot of change happening in society and the sector needs to engage in new and innovative ways.”
For Domingues, it’s more about maintaining relationships. “Charities have relationships with supporters, donors and stakeholders, and these relationships need to be maintained. Charities need to maintain them by being open, honest and transparent in all communications. If you don’t commit to these things and don’t live by them, then you can’t have a relationship because the trust won’t be there.”