We hear an awful lot
about “transparency” in the charity sector whether we are discussing the future
or considering how to avoid scandals. Transparency is brought up whether you’re
talking about pay, governance, technology, recruitment, switch to digital,
fundraising and everything in between. It is in the news again after Which? supported future
AGM votes on transparency-enhancing governance measures and the Charity
Commission publicised advice on salary declarations. But frankly it is often little more than a
mantra.
There is a general
presumption that goes like this:
If charities are
more transparent, then the public will pay attention, they will see which
charities are good and which are bad, and accordingly support the best ones and
shut off the worst. This will allow the sector to flourish, and will ensure
charities cannot stumble into crises, indefensible spending, PR disasters or
toxic leadership decisions.
This logic may be neat
but doesn’t reflect the real world. I don't buy it. To obtain the benefits
above more than transparency is needed.
Transparency in our
sector means that the public, or very small section of concerned citizens any
rate, get to see “how the sausage is made”.
The problem is: most of
them don’t know how a good sausage should be made, so will often judge
perfectly good sausages harshly. The problem is compounded by the fact that
some widely known purveyors of delicious pork meat actively misdirect the
public as to appropriate banger composition.
Transparency for its
own sake, say, publishing minutes of all subcommittee meetings or tables of
salaries can be an empty exercise. And who on earth is interested in minutes? A
list of salaries in misleading unless it is taken in context. A good charity,
one that is delivering excellent service or research but is straining at the
edge of its resources, could easily be judged as a chaotic failure that needs
intervention or closure. A mature medium-size charity that is ticking along and
spending a sensible sum on a review of its board and paying for one-off
strategy training for senior team to stay relevant and socially useful, could
look wasteful, complacent, and self justifying.
The current craze for
publicising salaries tells you little about how the charity is run. Frankly a
charity with a CEO on near the average wage, say £30k, might get approving nods
in the Daily Mail but could be
useless at delivery to beneficiaries.
As the saying goes, a
little knowledge is a dangerous thing. If charities are much more transparent,
but the public and media don’t know what they’re looking for, the wrong
organisations could be hounded and the wrong ones wreathed in laurels. To
borrow a concept from the private sector (something charities are constantly
encouraged to do) the crusade for greater transparency is an attempt to create
a “market” with “perfect knowledge”. We all become cleaver-wielding butchers.
The logic above then
assumes the public will have the perfect rationality to act appropriately.
However, we know people don’t act in a
perfect rational manner, hence the whole field of behavioural economics. In any
case, the would-be charity judges would not have perfect knowledge because they
do not know what makes a good charity.
Indeed, most of us in
the sector don’t claim to know exactly what makes a good charity. This is
why we have the debate about how to quantify and compare impact.
There is excellent
research and considerable resource funnelled towards answering this question. Until
this has been broadly resolved, until our sector can present a more or less
united front agreeing how our good can be measured, then the transparency
crusade will be over-reaching.
Of course charities
should not regress in their openness or attempts to explain themselves to the
public: if any charity has an urge to cover something up, it probably should be
revealed. Transparency lets us catch the outright frauds, incompetents and
crooks – at least those unable to obscure their maleficence behind legal
justification or accounting contortion.
Current norms should
let the media do their job of highlighting the rot, but perhaps also invite
them to attack the healthy. At the moment, overexposure and transparency for
transparency’s sake, when there is no good benchmark for judgement, means the
sector risks opening itself to critique from those who may have little idea
about how a charity should be run. Indeed the nonsense on the salary front is
revealed when you get members of the public saying they are surprised that charity
CEOs are paid at all!
Analysis from the
website Giving Evidence shows that there
has been and continues to be a strong bias towards old established charities
gathering more confidence and funds than newcomers, even though the last 20
years have shown an explosion in all forms of datasharing. Perhaps this means
that the oldies are just the best, but I’d guess it implies the public just
doesn’t scrutinise the information in the manner market theory suggests.
If we want the
information revolution to really help sort the hog from the swine, our
transparency efforts must be twinned with bold, clear public information on
what to look for.
So perhaps the Charity
Commission should address the need for better communication of the job of
charities and the great work they do than their current guidance on charity
salaries. Frankly we have seen a little too much of the finger wagging of the
Commission and too little of the promotion of the great work we do. I get a
little tired of the negative publicity that is often engendered by the
Commission when we would all like them to understand you promote trust in
charity not just by finger wagging but by solid hard work in promoting our
worth to the media and general public. Let's have some transparency about just
how many lives are saved by our work in the refugee camps or amongst the
homeless and the destitute. A transparency agenda driven by the likes of the Daily Mail is not one to which I wish to
subscribe.
