What do Médecins Sans Frontières, The Children’s Trust, St John Ambulance, Terrence Higgins Trust and Smile Train all have in common?
They are five of the 26 charities that placed adverts in the final edition of the News of the World. At the time, the News of the World was at the centre of the telephone hacking scandal and its owners, News International, keen to put the scandal behind them, closed the paper. But, they allowed charities free advertising in the final edition and donated the income of that edition to three charities.
“Outrageous!” we all shouted, “Imagine the reputational damage to those charities!” The BBC reported that a number of charities had rejected the News of the World’s offer, including The Salvation Army and RSPCA.
To be clear, I’m not defending phone hacking by the News of the World. But the question needs to be asked: are we so fearful of damaging the reputations of a charity that we avoid risk and the right moves altogether?
At the time the IoF urged caution among its members and published this statement:
“The decision as to whether a charity ought to accept a donation or not should be grounded in its mission and policy objectives. A clear policy on the acceptance or refusal of donations is important for all charitable organisations. Such a policy needs to be acceptable to all those associated with the charity and agreed formally by a charity’s trustees.”
The Charity Commission also made a statement:
“Ultimately it is the responsibility of a charity’s trustees to ensure that any fundraising, including the acceptance of donations, is in the best interests of the charity…We encourage trustees to assess the advantages and disadvantages of new opportunities to fundraise, including any potential risks to the charity and its beneficiaries.”
With hindsight, could we argue that ultimately it was in the best interests of the charities to accept the donations and free advertising offered by the NoW?
Three charities did accept the proceeds of the final edition. Can you name them? You will remember we all thought it would destroy their reputations to accept the money.
Barnardo’s, Forces Children’s Trust and Queen Elizabeth Hospital Birmingham Charity each netted a whopping £933,000 according to the Guardian.
For Forces Children’s Trust that gift would have been the equivalent of about 12 years of running costs – a game changing amount of money for the charity and its beneficiaries.
Damage to reputation is back in the fundraising trade news. Third Sector magazine ran an article on the 14th May 2015 about the damage a BBC Panorama episode on Comic Relief’s investments had on its reputation and income.
Panorama exposed how Comic Relief’s investments in various stock and share managed funds included shares in arms, alcohol, and tobacco firms.
Even though we all in the sector thought this was a huge scandal, the Third Sector article showed that the general public and Comic Relief’s supporters didn’t really care too much. In fact, the biggest impact of the Panorama episode was that Comic Relief pulled out of its investments and ultimately lost over £2m income as a result. Only one month after the Panorama exposé, Sport Relief brought in a record breaking sum of money.
Returning to the Charity Commission statement “We encourage trustees to assess the advantages and disadvantages of new opportunities to fundraise, including any potential risks to the charity and its beneficiaries.” Did the trustees make the correct decision regarding the reputational risk to the Comic Relief brand?
Clearly, it takes a lot to damage the reputation of a charity. Here are two examples of one charity investing in arms, alcohol and tobacco and another advertising in a tabloid that hacked the phone of Milly Dowler – yet next to nothing happened in terms of their income or brand reputation.
The crazy thing about this whole discussion is that the one charity that probably suffered the most reputational damage over the past few years is the RSPCA (ironically one of the charities that rejected the NoW’s offer). And, they suffered because they stuck to their ethical morals.
I’m not suggesting charities should go out and invest in BAE Systems, Philip Morris or Diagio; I’ve used these examples to demonstrate how much it takes to damage a charity’s brand. It takes a lot!
So, if you are worried about damaging your brand, what do you do?
Test your plans with your supporters.
Ask them: “What would you think if we tried this?”
Invest a little money at first and see what return it brings.
Most importantly, trust what the insight research is telling you; more often it’s far more accurate than a hunch.
What do you think? Does our fear of reputational damage hamper us from taking decisions that could be financially beneficial for our charities and impactful for our beneficiaries?
Jonathan Cook | firstname.lastname@example.org | +44 (0)7921 250 211