Where’s the charity sector’s sense of corporate responsibility?

Forster Communications’ new report, Matching Method to Mission, highlights a stark and somewhat shocking truth. Only two of the top 100 charities (Cancer Research UK and RNLI) have a corporate responsibility policy.

The report’s authors rightly raise this as a pressing concern. The impact on public trust is severe. The risk of further poor behaviour is real. And the sector’s ability to recruit the best and brightest will be affected.

Once again, the private sector is outshining the charity sector, as it is on issues such as diversity. The report’s authors suggest that the “Halo Effect” might be a factor: explaining that because “charities rely on an outdated belief that because they are a charity, everything they do must be beneficial.”

That’s very obviously not true: the scandals of Olive Cooke, Kids Company and the Garden Bridge all spring immediately to mind.

The report also quotes Virgin Media’s Head of Sustainability, Katie Buchanan: “Ultimately, charities don’t have a monopoly on creating social change and businesses may choose to take on a social issue without them.” She warns that this lack of attention to how we conduct our business may affect our ability to build corporate partnerships in future.

We need to step up to address some of the most pressing issues of our time

Those of us who pay even the slightest attention to the non-Brexit news these days will be wrestling, at least on some level, with the existential issue of climate change. We must be careful to choose optimism over despair, as I’ve previously written, but there’s no question that the situation is dire. And, as my former colleague Russell Benson has written, “if we are truly on course to destroy our planet, why bother with our missions anyway?”

Most of us, I hope, have chosen to work in the charity sector due to a sense of social responsibility. Why would we therefore be satisfied by workplace policies that don’t prioritise train travel over short-haul flights where possible? That don’t ensure that materials for marathon runners are fairly produced? That aren’t bothered about an ethical investment policy?

Divestment from fossil fuels would be a good place to start

It is heartening to read that a coalition of charities has requested guidance from the Charity Commission on whether they are legally required to align their investments with their mission. (There is no clear response from the Charity Commission as yet)

Whatever the Charity Commission decides, I believe charities have a moral imperative to at least consider divestment from fossil fuels and other socially harmful industries, beyond those causes that are seen to directly conflict with their mission. We might not be the largest sector in the UK, but we command £92bn of assets. That’s indeed significant. The Church of England has made the decision to divest from fossil fuels, as has my faith group, Quakers in Britain.

Personally, I try to practice what I preach. I keep my savings with Triodos – a bank that only makes investments that have a positive impact on the world – and have opened a Triodos Junior ISA for my daughter. Beyond my personal decisions, however, it’s also important to me to work for employers that share my values, and I expect many of my peers feel the same.

We should think about our place in the world, and expect to be challenged

Without a proper focus on corporate responsibility, we can expect more scandals, more bad publicity and more difficult questions from the public.

We’ve already seen the environmental question impact charities this year, with the criticism directed towards Comic Relief for the plastic waste created by Red Nose Day.

Will we continue to lag behind businesses and faith groups, or will we step up and show leadership on one of the most critical challenges of modern times?

After all, as Greta Thunberg has said, “Change is coming, whether you like it or not”.

Portrayals of philanthropy in popular culture

I’m always intrigued when charities and/or fundraising get a mention in mainstream culture. It doesn’t happen too often, and when it does, it’s often superficial. I found this article on Blue Avocado which gives some good examples and notes that charities, their staff, and related issues are often purely used as backdrop, providing the vehicle for unrelated character or storyline development. Unhelpful stereotypes are also pervasive. It’s almost as if writers for TV and film don’t have much experience of charity work!

The Blue Avocado article, however, is from a while ago, so I thought it would be entertaining to look at some more recent instances, which follow below.

I don’t watch huge amounts of TV/streaming services so I’m sure I’m missing other good examples. Moreover, all of the below are from American TV shows; I’d love to hear if anyone has British examples.

Suits (Season 8, Episode 6)

The increasingly preposterous legal drama has a storyline about a dodgy charity. The reason they start investigating the charity is because “most charities spend five percent of their income on fundraising”, but the charity in question spends a shocking 5.3%. There must, therefore, be foul play at hand.

What does this tell us about the charity sector?

From this we can learn that, in America at least, myths about fundraising expenditure – and presumably also overheads – still abound.

Excuse me while I go and bang my head on my desk repeatedly for several minutes.

The Bold Type (Season 2, Episode 1)

I really like The Bold Type. It’s fun and easy to watch, but addresses some social issues with more complexity and panache than your average mainstream TV series.

This episode features an entrepreneur whose company donates menstrual cups to homeless shelters. However, it turns out that the menstrual cups are essentially useless to homeless women, who lack the hygiene facilities required to use them safely.

What does this tell us about the charity sector?

This represents an excellent example of the blindness caused by privilege. Many charities will have faced the headache of dealing with a well-meaning donor who hasn’t done their research and wants to give them something utterly useless. I applaud The Bold Type for recognising some of the complexities involved in philanthropy.

Billions (Season 1, Episode 2)

The bombastic Billions has a strong major donor storyline early on. The brash billionaire wants his name on a performance arts centre and offers to buy out the incumbent donors. He then savagely gazunders them as an act of revenge for a past insult, lowering his offer by $16 million. The centre representative tries to offer some lofty words about the importance of philanthropy, but this is hilariously dismissed: this particular major donor isn’t interested in social good. Revenge, and the social cachet of the naming rights, are all he cares about.

What does this tell us about the charity sector?

From Billions we gain a healthy reminder that all major donors have their own reasons for giving, and we may sometimes get caught in the crossfire of conflicts that we don’t understand.

Times have moved on, a little

Since the Blue Avocado article was published a decade ago, there have been some slightly more nuanced depictions of charities and philanthropy. But as the Suits example shows, unhelpful myths still persist. I don’t know what we can do about this, other than try to get more charity workers jobs as TV writers.

Why shouldn’t charities be covered in the business press?

Frequently I hear a fellow fundraiser complain that the mainstream press only ever covers the bad news stories about charities. This complaint has become more prevalent ever since the various scandals in the UK have arisen over the last few years.

For me, this attitude isn’t sufficiently based in reality to be credible. When has the mainstream press ever prioritised good news? Have you read the news recently? It’s generally all pretty terrible.

I do empathise with the sense of frustration, though. Charities only tend to get covered when: a) one of them has done something bad; b) one of them hasn’t actually done anything wrong, but the press claims foul play regardless; c) a spokesperson is commenting on something related to the cause; or d) a celebrity is involved in doing something eye-catching.

The public sees charities as cuddly, which is nice, but it hits our credibility

In the UK, there is often a tension between how the public sees charities – and expects us to act – and the practical realities of running a complex organisation on a shoestring. The public often expects charities to be staffed by volunteers, and the reaction towards any six-figure salary is often very negative.

Vu Le has written extensively about the harmful impact of such beliefs in the US. And they hurt us here, too.

The mainstream dialogue about charities is limited. I suppose the concept of “charity” often hits emotional buttons, especially when coupled with stories of real or supposed wrongdoing.

What if there was a more cool-headed, yet still compelling way to engage the world in our work?

Charities are complex, fascinating and difficult to run

I often wonder why we rarely see charities covered in the mainstream business press.

Maybe this is my inner charity nerd coming out, but I think some of the challenges faced by the sector are unique and fascinating. Balancing restricted grants against running costs?  Mergers? Innovations in project delivery?

We see similar detail about commerce in the business sections of newspapers. I suppose that’s often linked to share prices and investments. But we’re often told to manage major donor relationships as if they’re investing in us like they do in businesses. Understandably, they want to see bang for their buck, and they need to have confidence in the senior management team.

Getting journalists interested might not be totally impossible

Private sector professionals may very well be interested in the inner workings of charities – especially if they are considering their philanthropy. So I believe there’s an audience for charity news that goes beyond the trade press.

I’m not being completely speculative and idealistic: I note with great interest that Harvard Business Review occasionally runs articles on American nonprofits, including in-depth features.

I expect that HBR has substantial resources – perhaps more than the UK business press. It’s also notable that their charity opinion pieces are by people with substantial standing and reputation beyond the charity world, such as Dan Pallotta. The voice of the charity mainstream is missing.

Maybe some of our sector leaders should pitch more often to the business press. Perhaps charity PR departments could consider it as an option, although it’s not my area of expertise: possibly they do already and have encountered barriers. If so, it would be worth considering what we can do to overcome these barriers and get journalists interested.

If we can better publicise the challenges we face, perhaps our work – and our leaders – will be more widely respected and admired beyond our own circles, and we’ll be less likely to face situations like this.

Ethics in fundraising goes far beyond the donations acceptance policy

I read NCVO’s recently published Charity Ethical Principles with great interest. It highlights four principles via which charities should aspire to high ethical standards:

  • Beneficiaries first
  • Integrity
  • Openness
  • Right to be safe

I applaud its recognition that charities have impacts – both positive and negative – beyond their specific missions. It covers, for example, the importance of workforce diversity, the role that culture plays in ensuring staff feel safe at work, and a commitment to reducing environmental impact. However, it does not explore why these things are important, and for me this raised some interesting questions.

Is putting the beneficiary first always the right thing to do?

The Charity Ethical Principles states that “The interests of their beneficiaries and the causes they work for should be at the heart of everything charities and those who work and volunteer in and with them do.

I agree with this statement. However, it also seems that pretty much anything a charity wants to do can be justified by “beneficiaries first”. High-pressure tactics from street fundraisers? Check. Mass mailings with only the barest nod to personalisation? Check. Hiring unpaid interns to reduce the staffing bill? Check.

Why stop there? A homelessness charity probably can’t accept funding from the alcohol industry. But the arms trade wouldn’t be a direct conflict – and it can be highly lucrative! If selling weapons to questionable regimes raises more money for a good cause, it’s putting beneficiaries first. Isn’t it?

Obviously that’s a ridiculous statement. Aside from the practicalities of a small charity opening a trading arm to sell fighter jets to Saudi Arabia, we all know that it would be unconscionable. And it would cause a public outcry.

What do we do when “beneficiaries first” appears to conflict with our other responsibilities?

I’m by no means the first to ask this type of question. Rogare, the fundraising think tank, is developing an ethics model for fundraising: its particular focus is balancing the twin philosophies of “donor first” and “beneficiary first”.

Rogare’s Ian Macquillin recognises that “charities are run as two ‘separate’ organisations, serving two different roles to two different stakeholders [i.e. beneficiaries and donors] in two different markets (which is a key difference to commercial organisations)”.

Reconciling the needs of these two groups is no easy job. Macquillin makes the convincing argument, though, that we need a framework involving more than simply what feels right to us, or what the public, or the Daily Mail, thinks is right. We need to be able to justify what we do as fundraisers, and think twice about anything that has the potential to cause damage.

But do charities have responsibilities beyond the beneficiary and the donor? How important are these, and what does the public expect from us?

The negative externalities of fundraising and charity work

A “negative externality” is “a cost that is suffered by a third party as a result of an economic transaction“. The negative effects of pollution caused by commercial vehicles, for example, isn’t borne by the businesses, but rather those living in the environment around them. (This is the logic behind London’s new Ultra Low Emission Zone).

Learning this phrase made me wonder: what are the negative externalities of our charity work? There must be plenty: not because we are ill-intentioned, but simply because we operate in the same world as everyone else. Off the top of my head:

  • Charities may have investments in fossil fuel or arms manufacturers – indirectly contributing to pollution / global instability
  • T-shirts and other fundraising materials may not be produced to high ethical standards – affecting the welfare of workers in other countries
  • A culture of bullying causes stress and ill health in employees – a cost that is borne by their family, and possibly also by the NHS

Why should we care?

It’s impossible for any of us to avoid leaving a footprint on the world – however hard we try. We might think it’s particularly difficult for cash-strapped charities.

But this, in my view, is the wrong way to look at it. By striving to be “good” in everything we do, beyond the narrow confines of our mission statements, we can make even more of an impact on the world – and ultimately on our bottom lines:

  • Striving for a more diverse workforce isn’t just “good”; there’s a strong business case for it.
  • Treating donors’ data with care and respect will engender trust and higher income over the long term. Having seen some privacy policies, it’s blatantly obvious which organisations are striving towards transparency and which are trying to find loopholes to wiggle through. If I can spot the difference, the public certainly can.
  • The charity sector may not be the biggest contributor to carbon dioxide emissions, but we all have a responsibility to try and make the whole world better. And there are likely to be huge investment opportunities in clean energy.
  • All of the above safeguards the reputation of the charity sector. The media continues to throw mud at charities; proving that we operate in good faith will ensure that less of it sticks. And we know that, reputation-wise, one charity behaving badly affects all of the others.

Maybe I’m coming across as naive and idealistic, but surely most of us in the charity sector are here because we do want to make the world a better place overall. So my argument is that doing all of the above is putting the beneficiary first. 

Finally, I’ve heard peers complain – particularly in light of the mass mailing scandals – that the charity sector is criticised more than the private sector. Well, don’t we want to be better? Why shouldn’t we be held to high standards? If we are truly committed to putting our beneficiaries first, we should relish the challenge.

I love being right about blockchain, but also have a serious point to make

Scepticism about blockchain is turning into one of my favourite subjects. I’ve written about it here and here and here.

I was pleased to discover that my views are backed up by a recent study, which found “no documentation or evidence of the results blockchain was purported to have achieved” despite the glowing claims and forceful optimism of its proponents. (There’s also a good summary at The Register.)

Tellingly, when the study authors reached out to these enthusiasts, “not one was willing to share data on program results”. It turns out, therefore, that these companies don’t exactly practice what they preach when it comes to radical transparency.

It feels lovely to be able to say “I told you so”. However, there’s a serious side to all of this. I’ve recently read Bad Blood by John Carreyrou, which summarises his phenomenal investigation into the Theranos scandal. It’s fascinating and shocking and I highly recommend it.

In short, some of Silicon Valley’s most prominent investors were taken in by Elizabeth Holmes, a glamorous, charismatic leader who claimed to have developed a groundbreaking blood-testing device. This device, however, never existed in a functional format. It’s no longer going well for Holmes, although her story is probably going to make a great film.

The unravelling of Kids Company is similar in many ways: like Theranos it involved a charismatic founder with access to the highest echelons of political influence, but a painful lack of real impact evidence.

In both cases, the damage goes far beyond the wallets of funders or investors. Patients used inaccurate blood test results from Theranos machines to make decisions about their health, and vulnerable children under the care of Kids Company may have been put at risk.

It would be awful if anything like this happened again in our sector, but I believe there’s a risk if we take new technological claims at face value. I hope all of us can maintain a healthy scepticism towards anyone who claims that any new technology can solve social justice issues. Perhaps it can, but if these claims are grounded in reality, their proponents won’t mind answering difficult questions.

Moreover, I don’t buy the claim that only those with technical expertise can really understand. Any of us with a modicum of intelligence can get a handle on these proposals and identify the gaps.

After all, it’s much better to cause momentary awkwardness through asking a tricky question than hurt the people we are all trying to help.