CEO pay pie chart

Getting ready to respond

By Sue Wixley 5 March 2014

As someone who has worked in charities and NGOs for my whole working life (and that’s getting on for more than two decades now), I’ve struggled to work out how we should react to the criticisms targeted at our sector. And in the last year there have been quite a few brickbats. We’ve been told we’re unprofessional, too political, spend to much on running costs and that our chief execs are paid too much. There have been a few own goals too: the Cup Trust tax scandal, Comic Relief’s questionable investment strategy and some surprising comments from our own regulator.

In thinking about how best to respond to these critiques, I’ve had a conversation (in my head) about the rights and wrongs of answering back and how best to do it. There have been three different viewpoints:

  1. The attacks are based on untruths and ignorance, so charities shouldn’t bother to respond;
  2. It’s vital that charities counter these criticisms, correct inaccuracies and explain how they spend their time and funds; and
  3. Some of the criticisms are fair and charities should review their practices and put their house in order.

Recently, arguments 2 and 3 won the argument (in my head that is). I believe that as charities we have a duty to explain ourselves to the public who trust us with their donations, their time, their taxpayer pounds—and importantly with their expectations that we are indeed making a difference. And that to ensure that we maintain this invaluable support and trust, we shouldn’t shy away from pointing out problematic practices.

NPC’s Mind the gap research, launched today, provides insights into what the public thinks about the sector, which I hope will help shape its response.

In our research with Ipsos MORI we discovered, among other things, that:

  • A third (32%) of the public say that their views towards charities have become more positive in the last three years, compared with almost a quarter (23%) who have become more negative.
  • The top five concerns people have about charities are that they spend too much on executive pay (42%),are not transparent enough about their spending (36%) and spend too much abroad (29%), put pressure on people to donate (29%) and spend too much on running costs (26%).
  • There is a gap between what the public thinks charities should be doing as opposed to what they think they are actually doing. For example, over half (56%) thought that charities should be helping communities but just a third (35%) think they spend their time doing this. Conversely, 51% think that they should be raising money for good causes compared with 55% who feel that they spend their time on this.
  • Half of people (47%) say they pay attention to evidence that an organisation is having an impact when making a donation, including one in ten (9%) who say that they pay ‘extremely close attention’ to understanding the difference an organisation makes.

So, what might a bold response by the sector look like?

The Charity Commission has a vital role to play in reassuring the public about the high standards of transparency and accountability that charities are expected to abide by. NPC believes that, as well as promoting the fact that charities’ accounts are available to view online, the Commission could go further and require greater levels of transparency on income and pay. We’d be keen to see more information on impact made available too.

Charities themselves, individually and collectively, can help to build trust by ensuring they are transparent about their spending and accountable for their activities and the impact they achieve. This should involve everything from charities getting better at ‘fessing up to failure, to boards explaining the thinking behind their decision on CEO pay and a coordinated sector-wide campaign explaining the evolving role of charities.

The debates about the role of charities and how we spend our funds won’t go away any time soon. So we’d better get ready to respond.