Here’s an article Rosie wrote for September 2013 edition of Charity Finance on why large charities should do more to embrace and showcase their broader social responsibilities.

Encouraging good behaviour

Corporate social responsibility, or corporate citizenship as it is sometimes known, is not a new idea.  Organisations have been grappling with living within environmental limits, and of promoting a strong, healthy and just society for some time.  However, the combined impact of finite resources, economic constraints and an aging population give social responsibility a new urgency.

Nearly 1000 charities have an income of more than £10 million; with the top 100 ranging from some £50m to nearly £740m in the case of the largest charity, the British Council.  Add to that the 1200 or so charitable housing associations that collectively provide 2.5 million homes for more than five million people and you have got some extremely influential organisations with the potential for significant impact.

The charity sector, and the public good that they deliver, has been well documented.  You only have to read a sample of trustee annual reports to get a sense of the breadth and depth of work that charities undertake and the public benefit they provide.

But, as well as delivering public benefit through their work, should charities also be seen to be good organisations?  Should their behaviour be an exemplar of social responsibility?

Social responsibility for charities is a logical extension of the view that charities have a responsibility to behave in a way that commands public trust in the sector as a whole, as well as in their own activities.  Arguably, charities’ increasingly have a responsibility to society at large. Whilst fulfilling their charitable objectives goes a long way, this may not be, of itself, a sufficient response for today’s world.

In recent years, for a variety of reasons, more and more corporates have embraced corporate social responsibility, and it is now a given in much of their work.   Whether as a way of demonstrating responsible capitalism, or to gain market advantage, corporates are increasingly paying attention to delivering and explaining their wider social responsibility.

It is ironic that the corporate sector now appears to be leading the way in this area.  Given the particular role and the trust that charities can command, it is time for them to reclaim or at least lead this agenda. Large charities, especially, are impactful and influential organisations; they are the custodians of considerable assets and they have enormous scope to act as civic and community minded organisations, careful consumers and responsible employers.

I’ve sketched out below the types of area I have in mind.  Of course, many large charities are already doing impressive work in each of these areas. Some are also very good at describing this work in their annual reports, online and in social media. But few charities appear to draw the various strands of their social responsibility activities together, or to have an overarching and proactive strategy.

The activities undertaken by the companies listed in Business in the Community’s Corporate Responsibility index, a list which BITC publishes each year, are impressive and they make for some interesting comparisons.  The BITC index examines a company’s activities under four categories: community; environment; marketplace and workplace.

I’ve looked at how these categories might apply to charities, and I’ve added another category covering ethics.

The first category, community, is broadly equivalent to charities’ demonstration of their public benefit, which they are required to explain in their annual reports.  However, this category could also include charities’ wider engagement in the communities in which they operate.

While the law requires charities to act within their objects, in many cases these objects are widely drawn and they give charities a lot of scope to engage in a wide range of activities.

One example is YHA whose objects include helping people to have a greater knowledge, love and care of the countryside and appreciation of the cultural values of towns and cities.

The YHA directly engages with the 150 communities in England and Wales where it has hostels.  Examples of this engagement range from letting out meeting rooms to local community nursery groups, through to procuring local produce.

The second area, environment, would cover charities’ environmental and sustainability policies, both in how they behave as an organisation, for example as described in Cancer Research UK’s sustainability policy, and in how they influence others.  See, for example WWF’s work with Marks & Spencer to support ‘Plan A’, the company’s plan to become the ‘world’s most sustainable major retailer’.

The third area, marketplace, is a crucial area.  It could be used to explore the extent to which large charities support and ‘nurture’ smaller charities that are fulfilling similar charitable aims, and to what extent to they compete. I have not found any obvious examples for this article, perhaps this is because it is an area where least activity is happening, or perhaps there are good examples which simply need highlighting and promoting.

Under marketplace, we might see also a debate about the ethics behind some fundraising campaigns, both images and techniques.

The workplace category would describe the activities that a charity undertakes to be a responsible employer.  Arguably given the numbers employed, it is an area of huge potential for charities.

For example, a number of charities have made a commitment to ensure that all of their staff are paid the Living Wage rate for the UK, or the level of pay needed to provide an adequate standard of living.  Joseph Rowntree Foundation is one example of such a charity that has publicly adopted this policy; the Bromley By Bow Centre is another example, and other charities, along with corporates and various public sector bodies, can be found on the Living Wage Foundation’s website.  What is interesting is that there are fewer charities than you might expect to see on such a list, especially given the number of charities who directly provide care and support services.

More contentiously, the current discussion about intern volunteers is complex but a real debate for charities, and where good practice could be showcased.

Some charities, as part of the total reward package that they offer their staff, have a structured approach that encourages and enables staff to take up trustee roles and other volunteering opportunities. Interestingly, few charities appear to be vocal about this aspect of their employment terms and benefits.

Payroll giving is promoted by other charities.  For example, Save the Children won the 2012 Best Civil Society employer award for staff payroll giving in 2012.   It would be interesting to know whether Save the Children is a pioneer amongst charities in this area, or if this is increasingly the norm amongst charities.

Seeking inclusion on lists such as the Sunday Times 100 best not-for-profit organisations, and Stonewall’s Workplace Equality Index  are used by some charities to demonstrate creditionals as responsible employers.

More generally, good management practices, and also health and well-being, might fall under the workplace category.

The last category is ethics.  Charities activities should be ethical. For example, this might include the use of ethical supply chains.  The development of charities ethical and social investment policies in recent years also provide some excellent examples of ethics in action.  This may also be an area where there is definitely scope for corporates to follows charities’ lead.

In an age of austerity, there is even more pressure on charities’ resources to be used in the best way possible, to the best effect.  It may not be long before funders; corporates and even government increase their expectations on charities’ broader social responsibility, as part of their terms of engagement.  It would also be interesting to evaluate whether charities that have a good record of social responsibility are also more successful than others in their fundraising efforts. For these reasons, if no others, social responsibility may no longer be just a nice to have.

Encouraging charities to be more transparent about their social responsibility, for example by using their annual reports to publicly describe their wider social responsibility could be one way of developing charities work in this area; promoting social responsibility awards or formal ‘kite marks’ might be others.  All would help reinforce trust in charities’ work and value.  Unlike the corporate sector, embracing social responsibility should result in charities being better run, which would be a massive public benefit.

Further research and discussion with charities, and with those who have an interest in their activities, would be helpful to identify how best to encourage and showcase this aspect of charities work.

Given charities’ resources, innovation and imagination the results could be important, long lasting and impressive.

This article first appeared in the September 2013 edition of Charity Finance

 

September 9th, 2013

Posted In: CSR, Public Trust and Confidence

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