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.