Can we regulate for trust in charities?

By Sue Wixley 30 June 2015

Are we all engaged in a bit too much omphaloskepsis? The original term for navel-gazing comes from the Greek words for ‘navel’ and ‘examination’. Whereas initially it was used to describe a contemplative practice, today it is rather pejorative terms that suggests excessive or  useless self-contemplation.

For some, the Charity Commission’s publication last week of polling on trust and confidence in its own role was more the latter than the former. But at NPC we think that part of being an accountable regulator involves the Commission finding out what the public and stakeholders think about its work on a regular basis, and sharing these findings.

The new study also adds to a growing, valuable body of research on trust and confidence in charities. The polling was carried out by Populus and findings include:

  • Around three quarters of charities (75%) and of the public (72%) think that charities are regulated effectively.
  • More than two-thirds (69%) of the public and charities agree that the regulator currently takes action against charities which break the rules.
  • There is support (although not universal) for new powers for the Commission, with backing from 82% of the public and 92% of charities.

NPC was invited to respond to this research at the launch, where we reiterated our view that the Commission needs to play an active role as a regulator, particularly in assertively pursuing wrong-doers. In the past, NPC has argued that the Commission needed to find its teeth, and recent progress certainly points to the Commission becoming more proactive. The research findings underline this, as did a report earlier this year by the National Audit Office.

In our view, the regulator could do more to encourage greater transparency on sources of charitable income and on expenditure. We also believe that requiring charity trustees to report on mission and impact is important. Greater clarity on impact could, in turn, reassure the public that charities really are transforming charitable donations into social good.

But what does effective regulation mean for trust in charities (if anything)? Although not the subject of last week’s research, a poll carried out last year showed that when the public knows the sector is well regulated it is more likely to trust it. According to the Ipsos MORI study: eight in ten (80%) people who think the sector is effectively regulated also think that charities act in the public interest. Meanwhile, only four in ten (43%) who do not think the sector is effectively regulated think that charities act in the public interest.

The Charity Commission has a role to play in maintaining public trust in charities—by being a tough but fair and accountable regulator. But the Commission should, in our view, leave it to charities to champion the sector. The sector will benefit from a robust watchdog, not a cheerleader.

It is up to charities to win the public’s trust in their own work. And the Understanding Charities Group has a vital role to play in this regard, by talking openly about the role, the achievements and the diversity of our complex and ‘knotty’ sector.

Ultimately, trust cannot be regulated for. It has to be earned.