Andrew Hind looks at the growing gap between what charities do and what the public think they do.
In last month’s Charity Finance we ran an interview with Bob Humphreys, the Oxfam FD, under the headline Levelling with the public. This headline is turning out to be alarmingly prescient.
The events of the last four weeks suggest that a growing communication gap – between what charities do, and what the public think they do – is shaping up to become the biggest issue the sector has to confront.
Forget the problems of the tough economic environment and the restrictive influence of the new Lobbying Act; the only game in town for our sector’s leaders right now should be retaining public trust in the charity brand.
That’s why the Humphreys interview should be required reading for everyone worried about the future of civil society. He says the sector has much more work to do to explain itself.
Donors, he feels, do not understand why charities spend money on salaries and support costs, but a lot of the blame for those misapprehensions must be laid at the door of charities themselves: “We need to have an open dialogue with the public,” Humphreys says.
In mid-April we reported, in Civil Society News, strikingly similar views expressed by Ian Theodoreson, chair of the Charity Finance Group. He said charities are becoming “extraordinarily disconnected” from supporters who do not understand the work they do.
He pointed to the public being unaware that in larger organisations “the service is provided through people who need to be paid for doing a professional and challenging job”. As a result, he said, charities faced “shock headlines” suggesting that donations were being wasted on paying staff.
Theodoreson rightly cautioned that charities face losing the support of the public and, like Humphreys, called for better communication with the public about the realities of how charities work.
How shocking then that, almost simultaneously, the Charity Commission and OSCR – in making proposals to the Financial Reporting Council regarding changes to the Sorp – rejected the proposal that charities should state the name and salary of their highest-paid member of staff in their accounts.
For some years now, the whole of the public sector has become used to producing accounts which don’t only give salary details for the highest-paid staff member but state the names, job titles and full pay packages of the whole top-management team. It is a tangible demonstration of transparency.
Astonishing statement
And yet we read this astonishing statement in the minutes of the January meeting of the Sorp Committee: “Although funders desired to see the disclosure of pay and post held by a charity’s most senior member of staff, this proposal had been emphatically rejected [in the Sorp consultation] by charities and umbrella bodies.”
The Committee endorsed the rejection of this proposal.
This bears all the hallmarks of the Cup Trust debacle – a decision taken in good faith, but made by individuals who appear to be operating in a bubble and out-of-touch with the prevailing mood of the times.
If the Commission is serious about encouraging more transparency in the sector, it should overturn the advice of its Sorp Committee and confirm to the FRC that it got it wrong on salary disclosure.
If charities are not to lose public trust, their rhetoric about being committed to the highest standards of transparency must be more than mere hot air.
Levelling with the public about how much they pay the senior management team, and why, is a good place to start - as the NCVO has very sensibly recommended in its pay inquiry report this week.
Yet another hot potato for Paula Sussex when she starts as the new Charity Commission CEO next month.
Andrew Hind is editor of Charity Finance.
