Trust in charities

The public is increasingly concerned about ‘trust’.  As the public have greater access to information, and the ripples of the current economic climate spread outward, the level of trust in institutions especially with regard to financial management is under strain.  Traditionally trust in charities has been based on an 'inherent belief' that charities will spend wisely and effectively rather than any rational knowledge on how they operate.  However, while levels of trust in charities have remained high over the last few years this trust is under pressure and the factors determining it have shifted significantly [1].  This has come about partly due to public reaction to some fundraising and spending practices, attitudes exacerbated by the economic downturn as many people cut costs and reassess priorities.  There has been a move towards increasing public scrutiny into institutional finances and an increased expectation from the public to demonstrate what their money has achieved.  With public spending set to decline significantly over the next few years’ public generosity will be vital, and cannot be achieved or maintained without trust.

What are the implications?

  • Pressure on VCOs to be more transparent and adopt new mechanisms for accountability from both funders and the public (see expectations of evidence).  In particular the ability to demonstrate reasonable proportions of income reaching the end cause as well as the positive benefits being achieved.
  • Increased importance in honest, ethical, cost-effective and transparent fundraising.
  • Increased pressure to build trust through word of mouth and peer-to-peer networks and online communities with an aim of reflecting individual experiences.
  • This may lead to weaker control over the communication of your messages (see ease of publishing online.) 
  • Greater scrutiny of VCOs from the public may lead to an increase in measurements and comparison of VCOs (for example, league tables) which may not take into account the complexity of organisational services, beneficiary needs and fundraising costs.
  • Growth of movements such as the Charity Commission or the Impact Coalition in order to try and enhance transparency amongst the VCS.
  • Increased media coverage of the VCS with a focus on accountability which may have implications for organisation’s reputations.
  • Organisations may need to become aware of the importance of demonstrating their independence from government in order to counteract a decline in trust.
  • Organisations that deliver public services may increasingly need to differentiate themselves from government.

Moving forward

  • How could you build trust amongst your beneficiaries and stakeholders - would it be beneficial to be able to demonstrate to the public where money is going and how it is being used?
  • How could you increase the spread of positive personal experiences through word of mouth or peer-to-peer networks and online communities?
  • These networks may be out of your control, how could you maintain these if they produce negative reactions?
  • Do you have measures in place to demonstrate your accountability and manage the risks associated with this?

All organisational staff will need to be clearer about organisational expenditure.

  • Are your staff clear about your organisational expenditure and ready to explain if challenged?

Heightened public awareness and scrutiny of the VCS means charities need to be more aware of media attention.

  • Does your organisation have a strategy in place to deal with this? Are all staff clear about organisational messages?

Want to know more?

The Trouble With Trust: Building Confidence in Institutions

Published by: BBC

Date: January 2008

Format: Web

What is it? A transcript of a speech by BBC Director General Mark Thompson about trust

How useful is this? A short and interesting speech about the relationship between the media and public institutions and the impact that has on trust, drawing on lessons from the BBC. Some of the ideas are particularly relevant to charities who, like the BBC, are relatively well trusted.

Trust: 2009 Edelman Trust Barometer

Published by: Edelman

Date: 2009

Format: PDF

What is it? This report presents useful data on public trust in a range of organisational types. It compares trust in NGOs with that in business, media and government, and contrasts the results from various global regions.

How useful is this? The report gives a useful overview of trust in the global context. It may be less useful in the domestic UK context although the discussion of trust in the media is also relevant.

Other comments: 

Public now more discriminating about financial management in charities

Published by: The Charity Commission

Date: 2010

Format: Web and PDF

What is it? A brief analysis summarising the main findings of the 2010 Ipsos Mori and Charity Commission research study into “Public trust and confidence in charities”.

How useful is this? This summary provides a good overall indication of the current state of trust in charities, countering previously pessimistic predictions with encouragingly positive figures. It briefly touches upon the changes over the past 2 years in the important factors the public feel influence their trust, changes which represent a move towards greater financial transparency and accountability. It also illustrates how important people regard personal experiences they themselves have had as well as those of close friends or family.

Other comments: You can find links to both a more in depth initial analysis of the results, as well as the full report at the bottom of the page.

High fundraising standards deemed top “driver” of public trust in charities

Published by: nfpSynergy

Date: 2009

Format: Web and PowerPoint (PPT)

What is it? A short article summarising the results of nfpSynergy’s recent Charity Awareness Monitor (CAM). These results center around a September 2009 survey asking people “What makes you likely to trust a particular charity”.

How useful is this? The most important attributes to public trust are listed in the article and include “High standards of fundraising” - representing a desire for ethical and transparent financial management, as well as “Personal contact” – emphasising the importance of personal experience and word of mouth.

Other comments: The PowerPoint document presenting the full results in an easily accessible bar chart format can be accessed through the article, or here. A relevant 2010 article by ThirdSector.co.uk that touches upon the nfpSynergy research, giving it a bit of background and context can be found here.

Charity expenses story ‘highlights risk to public trust’

Published by: CivilSociety

Date: 2010

Format: Web

What is it? A brief article explaining that expense scrutiny and scandal can be just as relevant to the reputation of the third sector as it was within Parliament.

How useful is this? This article looks at how abuse of expenses within VCOs can be seen as a betrayal of trust and one which may irreparably damage the reputation of organisations and the sector. It suggests a move towards greater transparency.

Other comments:

References

  1. Public trust and confidence in charities – Ipsos Mori/Charity Commission 2010 [back]
Last updated at 16:00 Thu 03/Feb/11.

Recent comments

AuthorComment

I recently went to an event organised by the Charity Commission, where they presented the findings of a 2008
Study into Public Trust and Confidence in Charities conducted by Ipsos Mori on behalf of the Commission. This follows a first study conducted by the Charity Commission in 2005, in response to the then Draft Charities Bill.

The main objectives of the research were to investigate public trust, confidence and attitudes towards charities; and explore the key drivers for overall trust.

First of all, the study identified a number of key drivers of public trust and confidence in charities:
- the belief that charities spend their money wisely and effectively is the principal driver of overall trust;
- the belief that charities ensure a reasonable proportion of donations make it to the end cause and ensure that fundraisers are ethical and honest are also important drivers at the top level;
- the belief that charities are regulated and controlled to ensure they work for the public benefit is another primary driver;
- other positive drivers include having personally experienced what a particular charity does, and belief in the charity’s cause.

Since 2005 there have been a number of significant changes that are worth highlighting:
- overall public trust and confidence in charities has increased slightly but significantly (from 6.3 to 6.6);
- the vast majority of the public view charities playing an ‘essential’ or ‘very important’ role in society, and agree that charities are trustworthy and act in the public interest;
- the proportion of people donating time and goods to a charity has increased significantly;
- much more people recognise themselves as beneficiaries of charities and reveal that they have benefited from a charity in some way.

It is also interesting that there is a fundamental difference between what the public overtly says is the most important quality, and what covertly actually drives overall trust and confidence in charities. In fact, when asked to prioritise which quality is most important to their trust and confidence in charities, the public prioritise making a positive difference to the cause they work for.

This study was carried out on behalf of the Charity Commission before the Icelandic crisis and economic turmoil, so it was very interesting to attend the event at a time when so many things are changing. There is more information in the full report, but I wonder what the results would be if carried out over the next couple of months.

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