Financial transparency critical to build trust in charities

The public now trust charities less than they trust the average person in the street according to research from the Charity Commission, which suggests that being transparent about where the money goes is the most important factor in building trustworthiness

The research, carried out by Populus with over 2,000 adults in England and Wales, found that public trust in charities has plateaued since 2016, and remains low at 5.5 out of 10 on the benchmark. This compares with 5.7 last year and 6.3 in 2005.

Of those polled, 45% say their trust and confidence in charities has fallen in the past two years, with researchers pointing out this period has seen controversies surrounding Age UK, Kids Company, and most recently, the Oxfam scandal.

The research found 62% say their lack of confidence relates to a suspicion that a great proportion of donations do not reach the beneficiaries they are supposed to reach, which is reinforced when impropriety by charities comes to light and is widely reported on. This was the most common reason for a lack of trust, with 60% also citing concerns that in some charities that too much money was being spent on advertising, wages or administration.

The report identified the key drivers of trust in charities were led by being transparent about where money goes (8.8 of 10). This was followed by being true to their values (8.5); efficient in their use of resources (8.4); well-governed and well-managed (8.3); and able to demonstrate making a positive difference (8.3).

The findings state: ‘The public want charities to demonstrate good stewardship of funds, to live their values, and to demonstrate impact. Our research suggests that when charities are able to show that most of their donations directly reach the end cause, and that they are having quantifiable positive results, both trust and self-reported propensity to donate increases.’

Half (52%) of those whose trust has increased say they donate to charities more as a consequence, while 41% of those whose trust has decreased say they donate to charities less as a consequence.

Similarly, individuals who do trust charities are far more likely to have recently made repeat donations to a charity than those who do not (24% vs 11%). Those who do not trust charities are more likely to have never given to charities (9% vs 1%).

Baroness Stowell, chair of the Charity Commission, welcomed the findings and urged charities to respond to them.

‘Charitable endeavour is about benefiting society, adding value to our lives and communities – making the world a better place. This research shows that the public no longer give charities as institutions the benefit of the doubt in providing that value.

‘What the public expect is not unreasonable: they want charities to be guided by their ethos and purpose in everything they do, and they want charities to use their money efficiently and responsibly.

‘The public have seen evidence of charities failing to demonstrate these behaviours. So it is not surprising that trust has not recovered, and that the public are calling for greater transparency. This is proxy for a more profound issue: the public want evidence that charities are what they say they are,’ she said.

Stowell said the solution was not to ‘create more procedures or to tick more boxes’, but was centred on improvements in attitude, ethos and culture.

Trust in Charities 2018 is here.

Report by Pat Sweet

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