The Charity Commission for England and Wales has recently published some new research into how much the public trust charities.
Given the current climate in the sector, the results are perhaps not that surprising.
The research found that public confidence in charities is currently 5.5 out of 10. This compares to 5.7 out of 10 when the research was last carried out in 2016 and 6.7 out of 10 four years ago. It should be noted that the research was carried out immediately after the Oxfam news hit the press. This still compares favourably with groups such as MPs and journalists who score below 4!
It is also interesting to note that trust is highest among young people and declines as you move up the age range.
When asked why trust has declined, respondents quoted the recent media reports and also too much spending on advertising, wages and admin as being the two main reasons.
Its not all bad news!
While the headline figures are not great, there are still some very encouraging findings in the research.
58% think that charities perform an essential or very important role in society.
It will come as no surprise that the two most important factors affecting trust are ensuring that donations reach the end cause and that the charity makes a positive difference although there is some scepticism about the ability of charities to ensure the funds do get to the right place.
Transparency is a very important factor in trust and this is where we as advisors can and must be proactive with our clients. The temptation is often to find ways around disclosing information but the research clearly shows that the public feels that it is their money which is going into the charity and so they have a right to know what it is being used for. We need to encourage our charity clients to disclose rather than hide information.
In a controlled case study, the research found that trust was highest in charities which were upfront and clear about where their money went and those charities were more likely to receive donations.
And that is the key thing for charities to consider! How to ensure that donors keep on donating.
A charity cannot survive and provide public benefit without income and income will not flow unless the donor believes in what the charity does and that they are doing it efficiently and effectively.
How can we help?
As advisors to our charity clients, we need to understand the findings of this research and help them to build trust. Advise them on the content and disclosure of accounts but also talk to them about their other marketing. Encourage them to talk about how they use their donations. A breakdown of how each £1 is used can be a very effective tool. And where the charity is not performing effectively, help them to improve.
The sector has some work to do to rebuild trust, and we have a key role to play.