Public trust in charities
The level of trust placed in the charity sector remains high, despite there being an overall decline in the level of trust being placed generally in public bodies, according to a report recently published by the Charity Commission for England and Wales (CCEW). The charity sector is placed second in the list of the most trusted parts of society, with only doctors being ranked higher.
The report does show though that support for the sector may have plateaued and that it remains significantly below historic highs in how important charities are perceived to be, with only 56% of those polled believing that charities are ‘essential’ or ‘very important’. Many remain sceptical about the value charities can bring and have doubts about propriety and governance.
To address these concerns, four key public expectations have been identified that charities need to meet:
• That a high proportion of charities’ money is used for charitable activity;
• That charities are making the impact they promise to make;
• That the way they go about making that impact is consistent with the spirit of charity; and
• That all charities uphold the reputation of charity in adhering to these expectations.
Charities need to be aware that transparency remains vitally important if these expectations are to be met, with implications for their financial reporting. Concerns continue to exist that too great a proportion of charitable funds are being spent on administration and overheads, not on meeting their charitable objectives, with high executive salaries being highlighted as an area of particular concern. Charities need to be able to clearly demonstrate how funds are being spent and that expenditures are being controlled and can be justified.
Separately, the Office of the Scottish Charity Regulator (OSCR) has published its 2022 Charity Survey, which mirrors some of the findings of the CCEW. They too highlight the high levels of trust being placed in the sector, but that mismanagement and the perception of inappropriately large salaries are the most common concerns over trustworthiness. The report also highlights some of the key motivations given by donors for supporting a particular charity, with trust, the perception that the charity is doing something important and personal connections / experience of the charity being cited as the most important.
Awareness of issues such as those highlighted by the charity regulators help trustees to set their longer term strategy, by reminding them of the need to be aware of what the public expects of them, and the need to be proactively transparent when it comes to explaining how they fulfil their charitable objectives.