June 27, 2016, The Guardian

A recent Populus survey (the entire study is here) indicates that the public’s trust in charities in England and Wales has fallen to the lowest recorded level since government-sponsored monitoring began in 2005. This infographic depicts the trust rating declining to 57 percent from 67 percent in 2014. The giving public is more likely to trust small charities (57%) over large ones (34%). Charities that operate only in the UK (61%) are trusted more than those that work internationally (31%). Trust in the UK’s Charity Commission fell from 60% to 55%.

Here is a fitting comment to the Guardian article linked above:

I used to donate to Oxfam, Age UK and that Sky rainforest thing. Got fed up with being rung up and pestered to increase my donation by inarticulate clowns in call centers trying to make me feel guilty for not giving enough. I was even pestered for money when I was unemployed. I now give only to small local charities rather than large charities, which seem to exist only to sustain themselves.

Charity scandals were cited by 33 percent of the people surveyed as being the primary reason for trusting charities less, such as the suicide of Olive Cooke. According to the UK’s Fundraising Standards Board’s investigation, Mrs. Cooke was overwhelmed by more than 3,000 appeal letters a year. The FRSB’s chairman said, “Mrs. Cooke’s experience demonstrates the inevitable consequences of a fundraising regime where charities have been willing to exchange or sell the personal details of donors to each other, and to commercial third parties.”

The Charity Commission’s chairman, William Shawcross, said, “Poor fundraising practice, inappropriate data sharing, damaging commercial relationships [and] the high-profile collapse of Kids Company have all combined to knock the public’s confidence in charity. As long as there is a cloud over the sector, charities will struggle to be persuasive over high salaries for high-skilled staff, seemingly large fundraising costs and low charitable expenditure.”

The Populus study also found that 67 percent of the people surveyed object to high salaries and administrative costs and that 74 percent dislike aggressive fundraising tactics.

The UK is setting up a new fundraising regulating body to help restore public trust. The UK’s National Council for Voluntary Organizations is helping its members demonstrate to the giving public the impact their programs are making.

Earlier this year, Members of Parliament warned that charities would face new statutory regulations unless they can police themselves: “This is the last chance for the trustees of charities, who allowed this happen, to put their house in order. Ultimately, the responsibility rests with them. No system of regulation can substitute for effective governance by trustees.”

The Brexit referendum also places pressure on charities to restore trust. With looming political uncertainty, let alone potential national financial challenges, much greater demands will almost certainly be made in the voluntary sector to meet increasing societal needs. Charities will also need to be engaged in the UK’s negotiations with the European Union to protect the interests of their beneficiaries. Trust and confidence matter now more than ever.

At a time when falling public trust in charities is tied to aggressive fundraising practices, the voluntary sector will likely need to raise more funds than ever before because of the Brexit vote. One or more of the following scenarios will test the voluntary sector’s commitment to ethical fundraising practices and sound governance: EU funding of UK programs will likely diminish, if not in some cases end. The UK may face a recession resulting in cuts to public services. The UK’s grantmaking foundations may lose investment income. Inflation would hit disposable income and therefore charitable giving. Many corporations may move overseas to continue to benefit from the conveniences of the EU. The Brexit referendum also revealed disturbing divisions within society that need healing.

According to this UK study of charitable giving, the public trusts small charities almost twice as much as they do large ones. Aside from the logistical inability of large nonprofits to be genuinely responsive to and personal with all its donors, there may be another quality of the small nonprofit worth examining—its ability to fully live its mission. The risk each nonprofit faces as it grows larger, in addition to the temptation of outsourcing some of its fundraising to “the experts,” is becoming self-enclosed, frozen by its elites and perfectly planned programs, and clinging to its preservation. Perhaps the way ahead for us all is to remember the value of humility and to consistently return to the core of each of our missions.—James Schaffer