Doing the right thing - Rebuilding trust in charitable fundraising in 2017 and beyond
21 December 2016
Public scrutiny and disquiet over how charities raise their funds has been growing throughout 2016 - with how charities identify potential supporters, the strategies employed by agencies working on behalf of charities and how charities partner with commercial organisations, being areas of focus. This has had a significant impact on trust in the sector. The Charity Commission’s latest research showed that nearly three-quarters of respondents thought that some methods used by charities to raise funds (particularly ‘high-pressure fundraising techniques’) made them feel uncomfortable and this has been a driver in an overall decline in public trust and confidence in charities. So what can be done to restore this trust?
Well, charities need to be able to clearly communicate how they approach and conduct fundraising activities. This means being able to answer the following questions:
- What role do fundraising activities play in helping to achieve charitable objectives?
- How are we carrying out fundraising activities and why do we fundraise in these ways?
- Who do we work with to carry out fundraising activities, why do we work with them and how do we obtain assurance that they are meeting the standards that we have set?
- How are we safeguarding the public (including people who may be vulnerable), protecting our supporters and obtaining their consent?
- What information are we holding for our supporters (and potential supporters), how are we storing and using this information and how do we ensure that we respect their wishes relating to our contact with them, as well as how we will comply with the introduction of the General Data Protection Regulations (GDPR)?
- How do we ensure that our fundraising processes and controls are operating as they should, how will we respond if we discover that we have not met our own standards and whether we have had to activate these plans (including when complaints have been received)?
- What assurance is provided to charity trustees in relation to fundraising processes and controls?
- How will changes to fundraising regulation (or best practice) impact our activities and what actions will we take?
A charity’s annual report is an ideal platform to show that the organisation is transparent and is a key opportunity to clearly answer these questions for stakeholders and the general public. For the 2016 ‘Excellence in Reporting’ in Charities Award, as part of the PwC Building Public Trust in Corporate Reporting Awards, we examined reporting by registered charities in the Charity Finance ‘Charity 100 Index’ in relation to how they approach and conduct their fundraising activities.
We found that charities’ reporting on fundraising varied widely – from no mention of fundraising approaches at all, to ‘matter of fact’ statements that regulatory requirements and best practice guidelines had been met, to fuller and more detailed explanations as to how the charity fundraises, acknowledgements of the recent publicity in this area and what actions have been taken to respond to this. The higher end of this spectrum included the 2015 reporting by the Royal National Lifeboat Institution (RNLI), our eventual award winner judged by an independent panel, as well as the 2015/16 reporting by Marie Curie and Great Ormond Street Hospital Children’s Charity.
Charities’ reporting on fundraising will continue to evolve, particularly with the additional reporting requirements for larger charities by the Charities (Protection and Social Investment) Act 2016, the recent establishment of the Fundraising Regulator and the Charity Commission’s consultation on the Charities SORP. However, charities involved in fundraising activities can adopt the following principles in their reporting to help to rebuild public trust:
- Open and honest reporting – charities’ reporting should show that they are aware of the fundraising issues facing the sector, including explaining where there may have been shortfalls in the way fundraising activities were carried out and what has been done to address these. This transparency shows that charities value their relationship with their supporters;
- Fundraising is integral – charities should recognise the often integral nature of fundraising in supporting charities’ objectives, and this contribution should be framed within charities’ reporting of their charitable activities. This will reinforce the fact that fundraising helps charities in their achievements; and,
- Clear fundraising statements – charities should make clear statements in relation to their fundraising strategy, for example, how they raise funds and what standards their supporters can expect from them. These statements (often titled ‘fundraising promises’) should, and in some cases do, feature prominently alongside any reporting intended for supporters (and potential supporters), including on charities’ websites which seek donations.
Fundraising will inevitably continue to be of interest to the public - and make the headlines in 2017. This means charities will need to continue to regularly review whether they are ‘doing the right thing’ and meeting the standards expected of them by themselves and those who work with and support them. Continued trust in the sector depends upon it.
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Senior Associate, Assurance
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