Mike Kelly discusses why the third sector must do more to demonstrate its value, following the Charity Commission’s announcement that public trust and confidence in charities is at its lowest level since monitoring began.

The loss of public confidence in charities is described as ‘a wake-up call’ to all charities by the Charity Commission. However, it also represents an opportunity for everyone in the third sector to up their game.

The sector has at its disposal an up-to-date, comprehensive, stakeholder analysis, which has been independently collated and moderated. Along with this, it has already been analysed to draw out the key trends and highlight recommended areas for action. In other sectors you would pay good money for such consultancy and insights.

Of course, it could be read by trustees in a defensive style. Some might consider that despite the various scandals which have rocked the sector, they will be fine as their charity ‘hasn’t done anything wrong’.

The private sector is much more attuned to the ‘guilt by association’ impact and it is worth reflecting on how that sector has changed its approach to stakeholder engagement as a result of public scrutiny.

I think the first response to the report is for the board of trustees to read it and have an honest discussion with the senior management team, asking: 'how does this relate to our charity?'.

The first key drivers of trust are about efficiency and ensuring that the charity is well managed and that a reasonable proportion of donations make it to the end cause. Publishing this in itself is good but explaining what you are doing about improving it is better. Having a long term target is even better still.

We are all encouraged to review all sorts of costs in our own lives, everything from our utility bills to our home insurance, but how often do trustees think about this aspect of their stewardship.

How often does the CEO write in the annual review about what they have done to ensure that assets are well managed? The tone from the top is very important and whilst the new Fundraising Regulator is a good move it is the expression of values by everyone that will do more to restore trust and confidence around ethical fundraising than anything else.

The report highlights some good examples of approaches adopted by smaller charities – another area where we can all learn.

The second key area (and arguably even more important) is demonstrating that you are making a difference. This is also an area where the local versus global can be effectively addressed.

I have said before that one of the first things that attracted me personally to the Dame Kelly Holmes Trust was its clear reporting of social impacts. This is not an easy area and it still needs more development but that is no excuse not to start doing so now.

We all talk about the role of the third sector and how much money it saves the government; all the public are asking for is an explanation of how we can stand behind that statement.

Demonstrating the value delivered in simple terms is very powerful and it is not just the general public who are looking for this knowledge; all funders of charities should demand it.

Regional differences are more clearly explained; just think about unemployment rates in different parts of the country and you would already have a clear idea about why costs (and hence impact) varies.

John Steinbeck said anything that just costs money is cheap. The public value the role that charities play because they are values driven, and the most important thing we can all do is communicate that clearly with passion and with impact.

Mike Kelly recently joined Dame Kelly Holmes Trust as chair of trustees. He is former Director of CSR at KPMG and has been a trustee at a diverse range of charities. For more information visit www.damekellyholmestrust.org.

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