A
couple of hundred years ago, the American statesman and all-round
renaissance man Benjamin Franklin said: “It takes many
good deeds to build a good reputation, and only one bad one
to lose it.” Whether this is the case today for UK charities
is debatable, having a great deal of good will among the populace,
but a charity’s reputation is its bread and butter and
damage to it is something that should be avoided at all costs.
And it isn’t just through the actions of a charity itself
where damage can occur; there is also the potential of guilt
by association, specifically association with business. There
are a whole variety of obvious benefits for charities to form
partnerships with private industry, whether for additional
funds, increased profile, or access to expertise which doesn’t
exist within the charity. Slap-dash partnering, however, without
having a system of protection in place could expose a charity
to some unpleasant surprises, potential mission drift and,
of course, reputational damage.
Considering the risks
Back in the middle of 2002, the Charity Commission published
a report (RS2 – Charities and Commercial Partners)
looking at the potential pitfalls of commercial partnerships
and how to mitigate against them. Still relevant nearly
five years later, the report summed up the threat saying:
“Commercial partnerships which do not represent a
good deal for a charity can damage the reputation of charities
in general by giving the impression that charities are willing
to become involved in commercial ventures even if there
is little financial, or other, benefit to be derived.”
The report goes on to say: “Some Commission cases
give examples of charities, particularly smaller organisations,
being approached by companies and entering into commercial
partnership agreements from which they receive very little
financial, or other, benefit. In some of these cases the
added financial value that the company derived from its
association with a charity was disproportionate to the sum
due to the charity. We have seen that this can damage the
name of an individual charity and also discredit the wider
name of charitable fund-raising.”
Megan Pacey, head of policy and campaigns at the Institute
of Fundraising furthers this point, saying that while there
are many potential positives that partnerships can provide,
in terms of funds, marketing, brand awareness and awareness
of corporate social responsibility for example, there is
also the downside of potential reputational damage. “Those
two need to be balanced off against each other and you need
to be quite clear about whether the risk outweighs the benefits
and vice versa.
“There are a lot of these kind of relationships which
start off looking like they are the solution and as time
goes on, unless they’re really well thought through
to start with, they can become something that isn’t
so attractive,” she says.
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Thinking things through
Before entering into partnership with anybody, there are
a number of considerations to be made which will limit the
potential for reputational damage at the outset and avoid
having to fire fight in future – prevention rather
than cure so to speak.
Neville Brownlee, head of charity effectiveness at the Charity
Commission, puts these into three broad categories: establishing
an overall ethical policy; knowing who you are getting involved
with; and ensuring firm agreements are in place before going
forward.
“The Commission recommends that charities think very
carefully about the sorts of partnership they would like
to enter into, and as importantly, those they would not
want to, so that when they are approached by a commercial
firm they’ve got a framework to help guide them,”
he says of the first stage. From this, and ideally in consultation
with members or stakeholders, the charity should develop
an ‘ethical policy’ to determine the types of
partnerships which are acceptable.
The second step, says Brownlee, is to do your homework.
“Ask questions of the potential commercial partner,
find out about them so you then have information that you
can compare against your ethical policy.”
This ties in well with the partnership codes of practice
produced by the Institute of Fundraising. Pacey sums these
up as advising, “to do the thinking before-hand, looking
at the potential to do very well [out of the partnership],
but also the potential for it to break down”.
This includes: asking if the company is financially sound,
which may involve taking out a credit report; asking if
they have a history of charitable support; asking if this
history has been successful, which includes checking with
previous charity partners; and asking what the company’s
motives are for wanting to partner. It is also finding out
if the company is a subsidiary of a larger organisation
which may engage in practices which are at odds with the
charity’s mission.
“I think it’s really important to understand
the values and ethics of the company and as to what kind
of an impact or reputational risk that may have on you,”
Pacey adds.
John Smyth, senior researcher at the Directory of Social
Change, puts it a different way: “I think a lot of
it is common sense,” he says. “If there is an
obvious conflict of interest then most people would be able
to see that potential conflict arising without it being
pointed out to them. So it’s then either declining
to be in partnership with that particular company, or you
take into account the plusses and minuses. Is a bit of flak
from certain sectors of the press questioning the ethicalness
of that partnership too much, or is it better to take the
money and be able to help people?”
The final point is to get a written agreement which lays
out exactly what is expected from both sides of the partnership.
This should include the ways in which logos and brands can
be used, under what circumstances either party could pull
out of the partnership, and definite timeframes for when
the partnership will begin and end.
As Simon Hill, fundraising officer at NCVO, points out:
“The partnerships that work best are the ones where
both sides are clear that they’ve entered into it
from the point of view of developing a shared understanding
of direction before going into a negotiation to develop
an agreement, and a clear written understanding of what
it is they’re going to do.”
“If you don’t know what you’re trying
to achieve, then you don’t have control over the means
of getting there,” he continues. “If you’re
entering into an agreement and are not explicit about what
you want out of the relationship, then the danger is that
you can get dragged off course in terms of the activities
that you’re intending to do.”
“If you have a strategy in place then you can better
control events, rather than reacting to them,” Brownlee
confirms. “And you’re able to have a more equal
partnership in any negotiation because you’ve thought
it through before hand.”
In an ideal world this amount of preparation could be considered
over-kill; but this is not an ideal world. It is well worth
taking at least the basic steps of establishing the boundaries
of what you are willing to partner with, and researching
the practices and policies of those with whom you are considering
partnering. If that effort means you are not risking damage
to your hard-won reputation, engaging in that ‘one
bad deed’, then surely it is worth it.
Recent partnerships:
ACH / Somerfield
“Partnerships don’t pop up every day of the
week,”says the Institute’s Pacey. “They
take hard work and there’s a lot of time and energy
involved in maintaining them as well as getting them into
place in the first place.”
Julian Hall, head of fundraising at the Association of Children’s
Hospices, agrees. He is at the end of an 18 month partnership
with Somerfield, the creation of which involved a long period
of eliminations followed by pretty intensive campaigning
of Somerfield employees (to make sure ACH won the employee
vote).
Of the result, he says: “The main benefit is the income,”[which
will equate to about £2.6 million gross by end of
year]. “Others are exposure – getting our name
out as a fairly unknown national charity brand. Also as
a young charity we’ve had quite a lot to learn in
PR terms – so they’ve also helped us there.”
As for corporate partnerships in general, he says: “In
terms of our ethical stance it’s quite a pragmatic
one. So if there was any potential for reputational damage
in terms of PR and having a knock-on effect towards our
ability to fundraise in other areas, then we would take
that on a case-by-case basis as to whether or not we would
work with a particular corporate.”
Macmillan Cancer Support / BAE Systems
BAE Systems is a company that you might expect to raise
some eyebrows when they partner with a charity, as it is
the type of organisation that would be screened from an
ethical fund, for example. Their charity of the year scheme,
which mainly comprises of employee fundraising, chose Macmillan
as its recipient this year.
Judy Beard, Macmillan’s director of fundraising, marketing
and communications, said: “Ninety-nine per cent of
our income comes from voluntary sources, which is why corporate
partnerships are so important to Macmillan. We carefully
consider each and every potential partnership before making
the decision whether to enter into it or not. We put the
needs of people affected by cancer at the heart of everything
we do – mindful of the fact that we can at present
reach only one-in-four of the people who need our support.
“As well as the direct financial benefit to the charity
of any partnership, we know that working with companies
allows us to tell thousands of staff and their families
and friends about Macmillan; and how we can help them if
they're affected by cancer”.
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