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Public Trust in Charities – Oh Dear…

A recent report by nfpSynergy, a consultant in the Not for Profit sector, suggests that public trust in charities has fallen further (from 53% to 48%) and remains at its lowest level since 2007. Charities are now ranked 12th in the list of most trusted UK institutions, behind the BBC and Supermarkets, and are only 15 percentage points ahead of banks! Recent media coverage of failing charities, poor (and dubious) management and questionable fund raising techniques have weighed further on public sentiment. Charities are least trusted by the over 55’s – which is especially worrisome as these are the larger segment of donators!

This is a very serious concern for the sector. Personally I worry about where my charitable donations are spent when considering a donation. Does this level of scepticism stop me donating to charities? No. Does this level of scepticism affect the amount I donate to charities? Yes – most certainly. And I am slightly ashamed to admit it. Charities are an essential part of society and we all agree that they do wonderful things. We all understand the work they do is essential but how can Charities rebuild this lost trust?

The Charity Commission is currently dealing with the fund raising methods employed by charities and this will be a regulatory issue. But there are actions individual charities can undertake to ensure that they maximise the trust placed in a charity and as a consequence of this increase donations and grants.

The simple answer is transparency. The more transparent a charity is the more they will be viewed as being trustworthy. A simple way of doing this is to make annual accounts easily available (such as on their website). The charity could also create some Key Performance Indicators to update the public on certain aspects such as “Percentage of Funds spent directly on Charitable Activities” or “Percentage of Donations spent on administration charges and wages”. These Key Performance Indicators give a very real and informative indicator to any potential donor in a quick fashion. Indeed, your accountancy system can automatically calculate these KPI’s and publish them in real-time on your website.

In addition, charities need to show they are efficiently managing their organisation and are not wasting money. This is especially true for when you are applying for grants. Having policies, procedures and systems in place that streamline your organisation will show that you have considered this aspect and have taken measures to minimise running costs. A cloud accounting system for you charity will not only help you save money and make your Team more productive, but will also greatly increase credibility for when you apply for grants.

AccountsIQ is a Cloud Accounting system very much suited to the requirements of the charity sector. It can handle multi-fund consolidation, separation of funds requirements and SoFA reporting. It also has established integrations with websites (for donation receipts) and CRM systems such as SalesForce. To receive more information please contact sales@accountsiq.com.

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