Reporting ratios and transparency within the charity sector are never far away from the headlines.
Transparency is a positive, and in a charity context, should be about nurturing understanding and offering choice. Stakeholders exercising choice helps hold us to account. But there is a danger that current reporting on transparency is being driven by popular opinion, meaningless comparisons and the desire to exercise control; this at best is counterproductive and at worst likely to cause significant damage.
Firstly, it’s important to recognise that when we talk about ‘the sector’, it is in the context of very different kinds of organisations. One size cannot fit all and we need to be measured in our discussions rather than just leaping to provide more data. This cry for more can drown stakeholders in details that do not increase their understanding and may confuse and muddy the issue.
This approach can facilitate bad practice, too, enabling those who would wish to obfuscate; to wilfully be ambiguous and confuse. This approach could lead us to try and win the unwinnable and risks wasting precious resources as charities tie themselves up in knots in the name of ‘transparency’.
Negative interest in what we do and why we do it rarely comes from a desire to understand or support.
While people have the right to hold negative views, we should try to understand their motivations and point them towards causes they can get behind. But we have a right to disagree and resist the incessant pressure for greater mandatory disclosures. We have a responsibility to report well – not just to comply – and make sure that the users can access, put it into context and make an informed judgement on whether to support us. That is much more than dumping information on the public. It is working with them to make what we do more accessible and useful.
Raw data cannot and should not provide all the answers; whether it is about pay, income, efficiency etc. It is the narrative that sits alongside it that aids understanding. What we disclose should help stakeholders ask questions, to deepen their connections with us, appreciate our achievements and identify where we need to do more.
Why not start with trying to tell our stories accurately? What do our stakeholders need to know to get a real sense of who we are and how we operate? This would mean explaining in financial terms, but charity is not all about the bottom line or delivering services ‘efficiently’. It’s about striking balances between competing needs of present and future beneficiaries. It’s about social change – which cannot always be efficiently delivered.
It was the sector itself that drove the transparency agenda. When CFG started, there was no framework for reporting – charities did pretty much what they wanted.
We’re instrumental in pushing for a framework – a statement of recommended practice (SORP) – which would set out reporting requirements.