Openness is the key to rebuilding trust or we will continue to see a decline in the proportion of people donating.
A widely covered report this week from the Charities Aid Foundation told us that only 57 per cent of people said that they gave directly to charity in 2018, compared with 61 per cent in 2016.
While total donations have remained stable due to remaining donors giving more, this notable drop in donor numbers is credited by CAF to a global decline in trust across all institutions.
So what can the third sector do about this?
First, we need to own the problem rather than seeing ourselves as innocent victims of a larger trend. Journalists and the public can now peer inside organisations as never before.
Rebuilding trust means admitting publicly that many charities experience problems similar to those found in public and private organisations.
Second, we need to grasp that this isn’t just about recent individual scandals such as Olive Cooke and Oxfam. These don’t help, but they happen in other sectors and they can be recovered.
Our problem is more of a slow drip-drip that, over time, has eroded the pedestal charities have perched atop in the public mind.
This slow erosion is actually harder to address than a single scandal because it is systemic. To recover trust, we have to create a different justification for public support than the moral case based simply on being a charity.
The particular tool of persuasion I prefer is impact: “We solve problems. We have deep specialism in particular issues and are best placed to address them. And we can prove it.”
This does nicely for me. Why? Because it means charities then have to invest in what makes an impact and on showing that to be the best use of available resources.
One radical way of being super-public about impact is to create rankings for charities and social businesses. Effectiveness needs to be judged by a trusted source and then put in the public domain, just like we do with schools, police services and hospitals.
Of course, this idea is constantly rejected by the sector’s great and good, often the same people who opposed ranking in public services.
No thanks to them, the days when you knew next to nothing about your local school or hospital are long gone.
But we still know vanishingly little about most charities beyond their PR, and then wonder why trust is eroding.
Will this ever change? One thing I am hoping for is that the next chief executive of the National Council for Voluntary Organisations calls for “glasnost” – or radical openness – in the sector and action to show the public what is really working in charities versus what is actually a waste of time and money.
Might this kind of radical openness further erode trust? In the short term, possibly, but without some kind of major moves, I really do fear that trust in charities is only going to continue to melt away.
Craig Dearden-Phillips is an independent adviser to chief executives and boards, and leads Social Club, a network of social purpose leaders