The value of investments and any income from them can fall and you may get back less than you invested.

A Matter of Reputation


Neil McLeod highlights the importance of effective crisis management for charities.

When scandals of 2018 are looked back on, none will make the Third Sector as uneasy as the Oxfam crisis.

To recap, the UK charity found itself in the eye-of-the- storm amid revelations concerning the behaviour of its staff in Haiti.

The crisis which followed saw widespread condemnation of its alleged attempts to cover-up, donations dropping, its CEO appearing before MPs and repeated calls for him to resign.

Its handling of the crisis was lambasted as slow and bordering on defiant.

Unfortunately, the criticism levelled at Oxfam in its handling of the situation had echoes of similar views of Third Sector crisis handling in the last decade.

Accusations of arrogance and a reluctance to accept realities and change, are among claims.

A poll which asked CEOs key concerns in 2017, not one chief executive, despite the turmoil which has besieged charities in recent years, listed what the public thought of them as being on their list.

Given the recent developments and reputation issues to hit the Third Sector, the head-in-the-sand response is cause for concern.

Writing in the Guardian, Toby Porter, Chief executive of Acorns Children’s Hospice Trust, posed a central point to ask why, three years after a bout of intense media scrutiny in 2013 over CEO charity pay, the same questions were being asked of charities.

In his piece, Mr Porter argues: “Perhaps the sector’s ongoing PR difficulties are exacerbated by a broad political conspiracy that sets out to undermine public confidence in charities – those that highlight the social impact of austerity in the UK, for example, or champion the government’s commitment to spend 0.7% of our GDP on international development. But I believe there is also a fundamental lack of self-awareness at play in the boardrooms and CEO offices of “big charity” in the UK, which will end up causing serious and perhaps lasting damage to the sector.

Could it be that charity CEOs are correct not to be concerned with their reputations, or what the public (one of the main sources of funding for most charities) think?

Since 2005, the Charities Commission has been measuring annually the level of public trust in charities.

In 2016, the Public Trust and Confidence in Charities report showed that trust in charities was at its lowest since the study began.

The media has long had a solid relationship with the Third Sector but in recent years, there has been more intense media scrutiny. It is firmly public interest.

A Charity Commission report showed that the biggest two reasons for the dip in confidence in charities was media stories about a charity (33%) and media stories about how donations are spent (32%).

The report says: “News coverage of poor practice by some charities has led members of the public to question their own assumptions about how charity donations are spent across the whole sector. Talk of high salaries, lavish expenses and poor cash management led the public to worry about the competence levels in charities and made them question how much of each donation actually makes it to the intended recipient.”

To focus more sharply on this, before Oxfam, there were two major news events which have helped spark this.

The first is the deployment of “chuggers” trying to raise funds on the streets.

The second, again fund-raising focussed, was the death of Olive Cooke.

Front page news, Mrs Cooke’s death shocked the public. While much of the initial reporting was hard-hitting, the report by the Fundraising Standards Board following the subsequent investigation brought yet more damaging revelations of fundraising practice gone wrong.

It altered public perception of charities among the wider public – the very definition of a crisis.

The detail on the focus was on the tick-box opt out process. However, the scope of the entire media interest was now on how charities conducted their work, and to what lengths they would go to find funds to continue their work.

Media perception of charities seems to suggest that they are run increasingly like businesses. The Charity Commission report of last year showed the public are concerned over transparency.

Journalists have continued to criticize an apparent lack of willingness to address the Third Sector’s reluctance to address big issues.

This approach when it comes to protecting their reputations is behind the curve of the commercial sector. It is nonsensical.

So, the Third Sector’s first step to helping protect a charity reputation is the one of realisation – the acknowledgement that one day, it could happen to them and when it does, they must realise that despite all its good work, it is not bullet proof when it comes to public perception.

Crises which can be fully planned for should be. The key consideration is to remember the cover-up is often worse than the original crime.

There is now increased scrutiny on how charities use and handle data, so a data breach crisis plan should also be drawn up and implemented. This is a new area of crisis many other sectors are also coming to terms with.

How Trustees are deployed in crises is a key consideration. Many of them may have the type of crisis or private sector experience which can serve such situations well. Charities should embrace their expertise and ask their advice where necessary.

The media will view your chief executive like any other CEO – they are the leader of the organisation and should be prepared to be scrutinised.

For this reason, they should be fully media trained and prepared for the toughest questions.

Avoid the crisis plan being destroyed by a chief executive who is not ready to deal with the media. A full plan will include crisis media training sessions for the chief executive who has the tools to restore public trust.

Charity chiefs should be lured into the pitfall of ignoring public concern – it could be taken as arrogance.

Unless a charity has recruited someone with crisis experience, a crisis event may be unchartered territory for the organisation. Crisis management experts are of course used to dealing with difficult situations, and good ones are not afraid to tell clients how it is once they see the depth of problems in an organisation. They should be able to bring with them not only expertise, but contacts and links to other third parties who can help.

Importantly, more now than ever, charities should be prepared to act decisively in a crisis – the days of the media giving them leeway because of its previous track record are over.

To find out more, visit The PHA Group’s Crisis and Reputation Management Service at https://thephagroup. com/service/crisis-reputation-management/

The information contained in this article is believed to be reliable and accurate, but without further investigation cannot be warranted as to accuracy or completeness.
The opinions expressed in this document are not necessarily the views held throughout Brewin Dolphin Ltd.