Management focus

Being a good charity manager includes being a good people manager, as the articles below show.

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Appreciating and addressing the scale of charity fraud

For a number of years legal, risk management and insurance professionals have been warning that charities are vulnerable to fraud, as if the constant stream of publicity about charities being caught by fraud wasn't enough of a message! Thankfully, the message seems to be getting through. Let's consider the situation.

The Fraud Advisory Panel and the Charity Commission have just published a guide, “Tackling Fraud in the Charity Sector’’, which outlines how charities can deal with fraud. This guide is essentially a summary of points considered at a well received conference of the same name last year.

While the guide may be a useful move in the battle to tackle fraud, its publication is perhaps more notable for what has been said at the time of its release. Both the Fraud Advisory Panel and the Charity Commission admitted at the guide’s release that fraud was inevitable in the voluntary sector.

Damning indictment

Such a comment is a damning indictment of charities’ vulnerability to fraud. And although the Commission has talked in detail in previous years about the estimated extent of fraud in charities, an admission that such illegality is inevitable is worrying.

As a prime example, the former chair of the Asda Foundation has been jailed for three years after admitting stealing £180,000 from the charity to pay for his partner’s dance company.

Paul Kelly, 55, who was also Asda’s vice president of corporate affairs, was sentenced at Leeds Crown Court after admitting seven counts of fraud by false representation. He had diverted funds that were supposed to go to victims of the 2014 Somerset floods to Murley Dance; which was run by his partner, David Murley.

Kelly, who had also served as a government adviser on food policy, alcohol and obesity and had been an ambassador for Prince Charles’s Business in the Community charity, was suspended and eventually dismissed by Asda after an internal investigation.

Asda must surely now be reviewing elements of its anti-fraud procedures to prevent this happening again. But you have to wonder if the latest guide would have been useful in preventing this episode.

Fraud resilience

The 20-page guide contains tips for charities on how to prevent, detect and respond to fraud, and outlines the need to build “fraud resilient’’ charities.

Two years ago, the Charity Commission put annual losses to charities due to fraud at £13.5m. It warned that this was only the fraud that had been identified and reported – meaning much more may have gone unnoticed. Other estimates have put charity fraud at a minimum of £148m a year – a huge figure for anyone to try and tackle.

The situation as the guide is issued, therefore, is that the national organisation for charities is stating that fraud is inevitable among its members and does not know how much of it is going on.

This is not a criticism of the Commission; it is more of a summary of the problem. The Commission itself has previously talked of charities’ complacency putting them at risk of fraud. And now it wants to attack the problem.

The issue now is whether a 20-page guide is sufficient to tackle and eradicate multi-million pound fraud in charities.

Unique organisations

Charities are unique organisations which rely on large amounts of trust and goodwill. Unfortunately, this can be their undoing when it comes to fraud.

They can be run by a small army of volunteers, which means minimal costs and an informal approach to organisation. This, unfortunately, can lead to a great potential for fraud as no one is either knowledgeable enough or in a suitable position to identify any suspicious activity or introduce systems to prevent it.

Alternatively, a charity can employ professional staff to ensure things are run “properly’’. The drawback here can be that a large amount of trust is placed in a very small group of people who may have the ability and overview of the charity to carry out fraud and prevent any scrutiny of their wrongdoing.

Crime proceeds

But staff and volunteers do not pose the only risk. Charities are exempt from paying tax on many sources of income, charities’ tax affairs are not made publicly available and contributions can be made in cash. All these factors make them attractive to someone on the outside looking to either hide their proceeds of crime or embezzle funds from an organisation.  

This is not mere suspicion. The Organisation for Economic Co-operation and Development (OECD) has made it clear that charities are regularly used for dubious loans and investments which involve large amounts of cash being moved abroad.

Faced with such a situation, it is unlikely that a 20-page guide will have all the answers. Some useful advice, most definitely, but not a comprehensive strategy for preventing and identifying fraud.

Thorough policy

Every charity has to have a thorough, well thought-out anti-fraud policy. It needs to establish firm fraud prevention guidelines to identify what it believes would constitute fraud. It must examine closely the potential for fraud among its staff and the way it works.

Every charity also needs to consider how it should react to fraud allegations, who should be responsible for preventing, detecting and reporting it, and how best to develop a whistleblowing culture.

In short, each charity needs to examine every aspect of its existence to assess the risks and determine where precautions need to be introduced. Financial controls need to be introduced, trustees have to be aware of their legal obligations and clear, detailed records have to be kept.

Trust cannot be seen as the be all and end all when it comes to running an honest enterprise – it actually has to be designed out.

Many charities may feel daunted by this. This is understandable as many volunteers and paid staff will never have thought they would have to battle fraud. If this is the case, specialist fraud lawyers are among those with the relevant expertise who could help devise an anti-fraud policy after carrying out an in-depth review of a charity’s workings.

Such an idea may appear radical or even “over the top’’ to many charities. They may feel no need to revise the way they have worked for decades and may be confident that there is no fraud going on under their roof. This could, possibly, be the case for some charities.

Clearest terms

But when we have the Charity Commission, Fraud Advisory Panel and the OECD all talking in the clearest possible terms about the definite existence of large scale fraud in the charity sector, it would be unwise for charities not to make a comprehensive effort to either identify it or prevent it happening to them.

Tackling Fraud in the Charity Sector is a useful publication that helps put fraud on the agenda. But charities have to treat it as a starting point rather than the end of the battle against fraud.

Rahman Ravelli's Aziz Rahman - with the Charity Commission, Fraud Advisory Panel and OECD warning of large scale fraud in the charity sector, it would unwise for charities not to make a comprehensive effort to guard against it.
" ...estimates have put charity fraud at a minimum of £148m a year - a huge figure for anyone to try and tackle. "

Being an outstanding charity leader

IAN LAWSON of the CENTRE FOR CHARITY EFFECTIVENESS, CASS BUSINESS SCHOOL says charity leaders are facing unprecedented challenges in many areas including funding, fundraising, reduced public trust and the increased need for good governance.

In June 2016 the Charity Commission revealed that public trust in charities had reached an all-time low, with the charity sector thought to be less trusted than the ordinary man in the street.

One third of people surveyed said their trust in charities has decreased over the last two years. A third of these attributed this to general media stories, one third to specific coverage about how charities spend donations and a fifth said that they were unhappy about the “pressurising tactics used by charities to elicit donations”. Only 6% said their trust in charities had increased over the past two years.

Given these pressures, arguably charity leaders need to step up their performance and be the best they can be to operate in this environment, but what does this require?

What behaviour and qualities do charity leaders need to demonstrate to successfully lead their organisation through these difficult times? How can leaders elevate their performance from "good" to "outstanding"?

In my view, one of the most interesting studies into leadership behaviour in recent times was carried out by the Work Foundation.. Its qualitative research unearthed insight into what really constitutes high performance leadership.

The research highlighted that there are clear differences between good and outstanding leaders. The main difference was that outstanding leaders take a systemic, people-centred approach to leadership. But what does this mean?

THEY THINK AND ACT SYSTEMICALLY. Firstly, outstanding leaders are thoughtful and reflective. They have broad horizons and a deeply connective philosophy that gives them the ability to see how the people and systems in an organisation fit together.

They also have a vision that extends from the past, through the present and into the future. They don’t just focus on the here and now – the immediate tasks in hand, but instead, they are always looking to the future and at further opportunities to improve things.

When they are planning, they focus on their people and how they can be given greater responsibility and opportunities to develop their competence and confidence because they view them as an essential part of the organisation’s future.

PEOPLE ARE THE ONLY ROUTE TO OUTSTANDING PERFORMANCE. Outstanding leaders not only like and care about their people, but believe at a deep level that the capability and engagement of people is how the organisation will achieve exceptional performance.

For good leaders, people are an essential group who will influence performance, but to an outstanding leader, they are the only route. They therefore devote much of their time and energy developing people and creating a supportive culture where people can innovate freely and develop – even if this means making mistakes.

Their philosophy is that it is better to try and fail than fail to try. Just as the famous female US Admiral Grace Murray Hopper said: “It is better to beg forgiveness, than ask permission.”

TRUSTING OTHERS TO COME UP WITH SOLUTIONS. Outstanding leaders are highly motivated to achieve excellence and are focused on organisational outcomes, vision and purpose. However, they know they can’t achieve their goals on their own so they focus on building capability and confidence of others and coach them and encourage them to step up.

IAN LAWSON of the CENTRE FOR CHARITY EFFECTIVENESS continues: Whilst outstanding leaders ask their people to share their problems, they don’t propose any solutions because they believe that most of the time, people know the answers themselves. They recognise and trust that people just need a bit of encouragement to work through a problem.

They also focus on positive things. Too often in meetings people reflect on what has gone badly recently but outstanding leaders do the opposite. They look at what went well and how success can be replicated and improved.

Lastly, outstanding leaders are authentic to their leadership role. Like all of us, they may wake up in a bad mood or feel under the weather on occasion, but rather than call in sick they think about their role as a leader and what impact and message this will have on their teams first.

By adopting these attributes charity leaders will improve their own performance and the performance of others, which in turn will impact the sector and go some way towards winning back public confidence.

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Pauline Broomhead
The Centre for Charity Effectiveness' Ian Lawson - outstanding charity leaders have broad horizons and a deeply connective philosophy giving them the ability to see how the people and systems in an organisation fit together.
national army museum

Improving how charity leaders communicate with their people

The way in which charity leaders communicate with their people can have a significant impact throughout an charity. Get it right and they can be rewarded with a more engaged workforce and higher retention levels; get it wrong and they may find trust diminishes, employee (and volunteer) morale drops and people start to leave (or withdraw).

Influencing staff engagement

The priority given to communications varies widely across charities and persuading senior leaders of its importance can sometimes be difficult. Using research and feedback from staff surveys can be a useful way to do this. Recent research using data from surveys of staff has identified that the top three factors influencing staff engagement in organisations generally were leadership, the organisation’s values and communications.

Such findings are particularly relevant to charities as the relatively low financial rewards they offer staff are not able to mitigate their failings in these three areas. So these factors do really influence whether or not a charity employee would recommend their charity to others as a good place to work, and highlight that investing in messaging and communications can produce results for charities.

To improve communications, charity leaders need to get close to their people – they need to be accessible and give people the opportunity to talk to them. Internal communications experts often recommend breakfast clubs as a good way to do this. These meetings, hosted by senior leaders, have no set agenda other than to listen to employees’ experiences and ideas.

This can be a really useful mechanism for charities as it is surprising how many charities become involved in disputes with their workforces - in some highly publicised cases, leading to strikes.

Another suggestion coming from the communications experts is that senior managers should work alongside staff "in the field" for a day, every few months. This can make a really powerful impression. Often it’s the little things that make a difference to the perception of leadership, such as the senior management team mingling with staff informally.

Authenticity and tone of voice

With all communications – written and face to face – the tone is very important and drafting a “tone of voice” document can really help leaders focus on getting their messages across succinctly and clearly, avoiding “corporate speak” or using jargon. The messaging must however be authentic, as people will know if they are scripted. Charities are not corporates and the people who work for them do not have a corporate mindset.

A good way to pre-empt messages being poorly received is to set up a network of champions in different parts of the charity to test how they might come across before they are issued. Bear in mind that effective communication isn’t one-way and shouldn’t always be driven from the top – listening is as much part of effective communications as delivering the message.

Leaders should have a choice on how to communicate and it’s useful for them to be able to consider a "menu" of different communication routes so that they can select those which suit their personality and which they are most comfortable with.

Having a CEO blog for employees can involve leaders responding authentically and appropriately to any questions raised by employees, and can be particularly useful when face to face communication isn’t possible. It may also be useful to give access to such a channel to volunteers, or even have a separate blog for volunteers.

Make use of technology

Exploring how technology can be used to improve leadership communications is a useful exercise. Having monthly staff briefings from the CEO may be great for keeping head office staff up to speed, but for those employees based in other locations, webinars may needed. Online or web conferencing (e.g.WebEx) phone-in conversations with the CEO (groups of 20-25 work well) could also be encouraged.

Similarly, online or web conference Q&A sessions on specific topics (or open) between CEOs or their senior colleagues (e.g. using Adobe Connect) are also good for efficient and effective engagement through leadership, particularly during times of change.

Using something like Yammer – a private social networking tool for organisations – is a great way to increase communications. Charity leaders should make sure they have a presence on this and it can be a useful way to organise informal gatherings or announcements involving them.

Giving feedback and support

Sometimes staff and volunteers don’t feel they can or want to engage informally or otherwise with senior management. Strong CEOs can be intimidating and it’s important to be aware of this. Where there is a trusting relationship between internal comms and senior management, for senior management evaluating honest feedback on how they might engage people more effectively (and how they might adapt their personal style) is time well spent.

Leaders need feedback about their communication skills whichever method they prefer to use, as it may be an area of their job they don’t naturally excel at. Some may benefit from media training to improve their skills. Don’t be afraid to consider this. All senior leaders, no matter how confident they are, can gain vital skills and tips from media training; journalists are after all probably the toughest audience they ever have to deal with.

Finally, a communication section should be included in the management development training, and creating toolkits for leaders on how to plan communications and the most effective communication channels for certain messages is also a good idea. Don’t leave good communication to chance. It should be managed properly.

When charities give priority to effective communications, it is likely that their staff will remain more engaged and thus more inclined to stay. If senior management is aware of its positive impact, they should be committed to build on their confidence and skills. The outcomes will benefit all in the charity.

Agenda's Clare Harris - sometimes charity staff and volunteers don't feel they can or want to engage informally or otherwise with senior management.
"Often it's the little things that make a difference to the perception of leadership, such as the senior management team mingling with staff informally."
Lee Bolton advert

Building your board of trustees

Over a third of charities experience difficulties in recruiting trustees. In fact, two thirds struggle to find trustees with the appropriate skills and often rely on word of mouth or recommendations to find new board members.

For a charity, careful consideration needs to go into how it approaches recruiting new trustees. Ask yourself; what are you looking for? What and how can you teach them? How will you go about attracting them to your charity? And crucially, how can you retain them?

Some charities may turn to their supporters and networks, even friends and colleagues of existing trustees when seeking new board members.

However, poor recruitment, induction, training and poor performance evaluation of trustees can lead to a lack of clarity about duties and responsibilities, and a failure to recognise where advice should be taken. It can also lead to vesting control in an inner circle instead of across the whole board. In essence, the board must be champion for its charity.

If you wish to build a happy board, there are five key questions to consider:

  1. Why are we recruiting new trustees?
  2. Are we ready to bring in new people?
  3. What are we looking for?
  4. How do we attract and select people?
  5. How do we keep trustees motivated once they have joined?

The recruitment process

Before you start recruiting, you need to prepare the ground and establish who is leading the recruitment process. By devising an action plan, it will help to ensure that you are acting in line with your governing documents. But you also need to ask whether the board and the organisation are prepared. Are you ready to welcome new people and their ideas?

As simple as it sounds, a pitfall for many charities is not agreeing what the vacancy is in writing. A pack of information for potential trustees must feature the role description including responsibilities. What also needs to be detailed is the time commitment expected of the new trustee.

Think about how to sell the role. Ask what motivated the current board members to join and to stay and analyse how this can replicated in your approach. Try to create a vacancy advert that reflects how you recruited these people. Think about where the people you would like to attract would be likely to see your advert – whether it's a local venue, specialist press, a volunteering website or elsewhere.

Recruiting new trustees is – or should be – a significant undertaking. But the long term rewards of a stronger board will make it a very worthwhile investment.

The induction

A thorough induction process is imperative. Induction programmes need not be lengthy or expensive, yet getting it right from the start will make your board more effective. It can act as the gateway for new trustees and also employees and volunteers. It will ensure the new trustee is up to speed with the new role, the charity, and of course, their legal responsibilities.

An induction can also provide evidence that the people in your charity have an awareness and understanding of key policies and procedures such as equal opportunities, health and safety, data protection and financial.

The induction pack is a crucial element throughout the hiring of a new trustee. It should include information on the role and responsibilities of a trustee, plus key internal documents such as a copy of your governing document, an overview of the charity, your strategic plan and objectives, organisational structure, a job description, and contact details of other trustees. Also amongst the contents of the induction pack should always be included the previous annual report and accounts along with the minutes from some of the most recent board meetings.

Post induction

Following the induction, a stringent mentoring programme will ensure trustees are bedded in suitably and will feel part of the charity's culture. By getting to know staff and other trustees, the new recruit will further their understanding of the charity which will also enhance their knowledge of the charity’s strengths and weaknesses.

A charity should have an annual training plan in place for new trustees. Providing up to date training is a key method of ensuring better financial and general governance by the trustees. A trustee training programme, which can vary from external courses to webinars to internal presentations, will ensure the trustee in question will understand and appreciate their core duties.

The board should also be constantly reviewed and this refreshment of the individuals at the helm will ensure the right balance on an ongoing basis for the charity. Too many charities leave succession planning until the last minute– the topic should be an ongoing discussion between the board. The needs of the board change over time and thus this creates a culture of "moving on" but, as a result, this ensures people who really do need to move on make way.

Why difficulties?

Regardless of shape and size, all charities tend to have difficulties recruiting trustees. Whilst smaller charities rely more on established contacts and local supporters, the larger, more recognisable charities tend to use funds to progress a thorough recruitment drive alongside advertising and marketing campaigns. This is why the previous financial crisis hit charities' recruitment capabilities hard.

However, it is down to the charity to ensure the application process is as straightforward as possible. A barrier which often prevents people becoming a trustee is a lack of knowledge about trustee vacancies and what trusteeship involves.

It is a well known fact that charities need to operate more like businesses to survive. Recruiting professionals with commercial experience can also help to turn things around for all charities, small or large. It is essential to search outside the boundaries of your charity's networks in order to attract a more diverse range of candidates and recruit the best talent available from this pool. Widening the search is always good practice, even in circumstances where there are strong existing members who may wish to take on the trustee role.

Good mixture

It is down to the charity to ensure they don’t simply recruit an individual just because their qualities replicate those of current board members. A good mixture of qualities and skills is vital.

The requirements of the board are constantly evolving therefore recruiting trustees is a process which is also changing rapidly. Finding someone who has the right skills and experience, a connection with your cause and enough free time to make a genuine contribution can be a daunting task.

Getting your board to agree on a structured and thorough approach to recruitment is one of the most effective ways to ensure that the long term governance of your charity is secure, efficient, well rounded and ready to take on whatever challenges lie ahead.

Russell New's Mark Cummins - devising a trustee recruitment action plan will help ensure that you are acting in line with your governing documents.
"Induction programmes need not be lengthy or expensive, yet getting it right from the start will make your board more effective."
"...refreshment of the individuals at the helm will ensure the right balance on an ongoing basis for the charity."

Putting governance high on your charity's agenda

Encouraging charity trustees to pursue higher standards of good governance has become a perennial theme for the charity regulators. A spate of recent cases where there were shortcomings in governance standards suggests that some charities have not fully embraced the regulators’ message. But it would be a mistake to think that the charity sector as a whole does not strive for best practice.

The number of regulatory inquiries instigated by the Charity Commission for England and Wales and the Office of the Scottish Charity Regulator (OSCR) is tiny in comparison to the number of registered charities in the UK.

Many examples of governance failings of course do not lead to regulatory inquiries, although some can lead to internal complaint processes being instigated and others will require input from professional advisers. By the same token, a large number of charities seem never to come across governance problems in practice, although this is often by chance rather than by design.

Wherever a charity sits on the governance spectrum, there will be very few charity trustees who will not benefit from a study of lessons learned across the sector as a whole, and a well run board will continually seek out examples as part of ongoing trustee training and induction procedures.

Recent coverage of the failure of Kids Company shows just how serious the impact can be of shortcomings in financial and governance controls. That case is not unique. The regulatory lessons which we may eventually glean from the failure of Kids Company are unlikely to create many surprises. The charity sector has been here before and, if anything, the surprise should be that larger and better resourced charities still demonstrate such a significant failure to learn from other sector precedents.

Early examples

The early reports into the failure of One Plus: One Parent Families, in Scotland, and the Heyday Project run by Age Concern England are two comprehensive guides to some fundamental steps which every charity board should strive to embrace. Although they are now around eight years old, they should be considered important reading for charity trustees.

The lessons which came out of those reports are in some cases so basic that the reports seem to be stating the obvious, but the obvious must be being missed in some cases if those lessons are still not being learnt or adhered to. It is certainly worth charity trustees reminding themselves of the lessons for the sector which came out of those two reports. What charity trustees should be taking away from those reports at the very least should be these key pointers:

  • Charity trustees should ensure that collectively they have the right mix of skills and experience for the type and scale of the charity for which they are ultimately responsible.
  • Charity trustees must understand the operating environment faced by their charity and the implication the operating environment has for how the charity is managed.
  • Overall direction and control of the charity must be maintained by the trustees. In particular, charity trustees must be able actively to hold the chief executive and senior management team to account, as well as providing strategic direction.
  • Charity trustees must be able to exercise independent judgment when weighing up or considering plans and proposals from their chief executive or senior management team, while at the same time not undermining management authority or demotivating staff.
  • The roles and responsibilities of the board, chair or convenor and the chief executive should all be explicitly defined, including the extent to which there is delegated authority granted to any one or more of them.
  • Charity trustees should take ownership of their own board and should implement a programme for board training, building and renewal, which should include regular reviews of performance and skills mix.
  • It is critical that charity trustees ensure that they obtain full and up to date financial information to allow them fully to understand the position which their charity is in, and to allow them to take informed decisions.
  • Trustees must develop an appropriate risk management strategy which identifies possible risks to the charity and they must establish systems or procedures to minimise those risks where this is reasonably practicable.
  • Where any charity is experiencing a time of growth and development, charity trustees must satisfy themselves that the capacity of the charity’s management and governance structures are appropriate for the planned development.
  • There should be a direct relationship between the charity trustees and the charity’s auditors in order that an objective and independent view can be obtained from the auditors on financial performance (amongst other matters), and to allow the trustees to gain assurance and advice on control systems and governance matters. Large or complex charities must consider establishing an audit committee to ensure that processes and procedures are monitored and are appropriate for the size and scale of the charity.
  • Charity trustees must ensure that their charity seeks external independent professional advice where it faces problems or where it does not have the required in-house expertise to deal with a particular matter.

More recent cases

More recent cases provide similarly useful lessons for the sector. A report by OSCR in 2013 into concerns around the Rangers Charity Foundation provides an overview of the natural difficulty which can arise when dealing with inherent conflicts of interest. In that case, only one of three charity trustees carrying the burden of control and management of the foundation was found to have acted in good faith and in a way which she honestly felt was in the best interests of the charity.

Despite any other failings, the fact that there was a genuine belief in promoting the charity’s best interests probably carried the foundation through its OSCR inquiry to a reasonably satisfactory conclusion (no charity trustees were disqualified and no other regulatory action was taken). But the negative PR from adverse media coverage was not the best that a charity might hope for. The Rangers case is a timely reminder, therefore, that an inquiry with no formal regulatory sanctions at the end can still tarnish a charity’s image in the public imagination.

The most recent high profile reporting in Scotland on the charity front was in relation to the KiltWalk. This fundraising charity organised a number of sponsored walks across Scotland (as the name suggests, participants wore kilts while taking part), with proceeds being distributed to a number of Scottish charities, some of which were predetermined by KiltWalk through partnership arrangements, while others could be selected by individual teams of sponsored walkers.

The success of KiltWalk meant that the number of sponsored walks grew considerably after just a few years of operation. This fact brought with it additional costs for the board: staff were needed to service the increased level of activity, and costs in relation to security arrangements and other essential factors increased.

The practical effect in at least one year’s accounts was that the charity distributed in grants only around 50% of the funds which it had generated as charitable income. Concerns from supporters and the wider public about grant-making levels had grown from a few social media grumbles until the point when the story broke in the national press.

The result of the OSCR inquiry was that no technical breaches of charity law or of fundraising practice were identified, but the damage from the negative press reporting was serious. An external body came in to assist the KiltWalk with its financial and governance processes and ultimately the entire board of charity trustees resigned office and was replaced with new trustees.

The only fault which the charity might have engaged in ultimately was not presenting in a clear enough way how it was going about its work – there was a perception amongst some observers that the charity’s affairs were not sufficiently transparent. That fact alone, however, may have been the major contributing factor to the negative PR which the KiltWalk endured.

Action points

It is crucial that charity trustees should continue to absorb lessons flowing from regulatory inquiries from across the sector. An awareness of formal legal duties is one thing, but boards should also have a clear understanding that adopting principles of good governance can help charities to manage their affairs with greater success and with less risk of formal investigations and complaints.

Charity trustees also need to consider at all times the potential impact of their actions. If a decision could result in negative PR, even when that decision is taken for the right reasons, charity trustees need to have considered that fact and be prepared for media fall-out, even if some of it might be unjustified or used creatively to make a newsworthy story. The underlying requirement is a secure grounding in financial and governance controls to help charities face PR and other more formal regulatory challenges. The lessons are already out there to be learnt.

Turcan Connell's Gavin McEwan - the surprise should be that larger and better resourced charities still demonstrate such a significant failure to learn from other sector precedents.
"...the reports seem to be stating the obvious, but the obvious must be being missed in some cases if those lessons are still not being learnt or adhered to."
"...boards should...have a clear understanding that adopting principles of good governance can help charities to manage their affairs with greater success and with less risk of formal investigations and complaints."
Lee Bolton advert

Dealing with the question of remuneration

Media attention surrounding charity pay has been recurrent. In February, research found that the number of charity executives paid over £200,000 had increased from 30 executives to 32 executives since 2013, and those paid over £300,000 increased from nine to 12.

In June the Sun newspaper criticised large UK charities - including NSPCC, Cancer Research and Marie Curie - over “sky-high salaries and the luxury lifestyles that go with them.”

With salaries and other issues in the voluntary sector on the media agenda, dealing with remuneration can be an ongoing issue for charities which want to do the right thing by their supporters, but at the same time pay staff fairly and appropriately for the roles they do.

Last year NCVO’s inquiry into charity executive pay offered trustees guidance on how to improve charities’ policies on pay. It recommended that all charities with independently audited accounts, those with a gross annual income of more than £1,000,000, should establish a remuneration policy. It also recommended that smaller charities should consider doing the same thing as best practice.

Greater disclosure

The new SORP (Statement of Recommended Practice), in place for year ends from 31 December 2015, requires greater disclosure in the area of pay. Setting up a remuneration policy might seem daunting. However, many charities will probably be following much of the NCVO’s advice already, so they can build on what they are already doing. The process should be evolutionary not revolutionary.

The NCVO recommendations and the charity SORP are a good starting point for any charity. The SORP provides the basic requirements around pay disclosures, while the NCVO goes much further and gives ideas for best practice.

At the heart of both approaches is transparency. Charities and trustees must be open and clear in their approach to remuneration. It is up to each charity to decide how far beyond the basic requirements of the SORP they wish to go. One of the most important things to avoid when drawing up a policy is getting bogged down in trying to find the “correct” figure for each senior member of staff. It is more important to have a solid rationale for the pay structure and to be able to explain to people how and why you set salaries at the level you do.

Charities also need to think about where they will publish details of their pay structures. Whether it’s on their website or in their annual report, the figures should be accompanied by a narrative that helps to explain their thinking. It is a great opportunity to describe the context that helped shape the charity’s decision making around pay. Stakeholders will increasingly want to hear the rationale behind the decisions and be reassured that there is a robust and open policy for setting pay.

Relating to values

Remuneration policies must closely relate to a charity’s objectives and values. For example, if a charity is trying to alleviate poverty, it goes against the grain to pay a member of staff a large salary. However, if the charity is a medical research charity which needs to generate world-leading work, it might need to spend more to attract the best staff.

Charities also need to understand the current market for recruiting people – who are they seeking to attract and select? If they need highly skilled employees to deliver their mission and goals then they will need to pay the going rate. Let’s not forget charities are competing for staff, particularly skilled ones. Just like private companies, they need the right people to lead them.

Remuneration ratios might form part of the discussion. They can be a useful tool, but charities should be careful not to let them become too rigid. One sensible practice is to compare senior executives’ pay to the median in their charity. Another useful consideration is the Association of Chief Executives of Voluntary Organisations’ five principles of good pay: transparency, proportionality, performance, recruitment and retention and process.

Small charities may need to get advice. There may be a trustee with HR experience or they may need to seek external professional advice. They could also consider reviewing the approaches taken by similar charities in their field and use them as a benchmark for their own policies.

Charities also need to think about how they should discuss remuneration at board level. Sensible questions need to be asked such as should a sub-committee be established to set the terms and conditions, or should the policy come from the whole board? Which decisions will be taken by trustees and which ones will be left to the executive team? For example, trustees might make decisions relating to senior managers, while those executives will determine the terms and conditions for everyone else.

Thinking carefully

The key message for charities is that they should be thinking carefully about their remuneration policy. You need to able to explain the remuneration policy to those working inside your charity, as well as to stakeholders and those outside the charity. It is what the private and public sectors have been doing for some time.

Finally, and perhaps most importantly, charities and trustees should be confident that they can explain the rationale behind their pay decisions.

Sayer Vincent's Judith Miller - you need to be able to explain the remuneration policy to those working inside your charity, as well as the stakeholders and those outside the charity.

Evaluating your board's effectiveness

According to research, boards that take time to regularly assess their performance are more effective than those that don’t. Evaluating board performance can deliver a multitude of benefits such as developing a sustainable culture of review, learning and development; sparking conversations about board practice; helping identify skills gaps and recruitment needs; uncovering other important issues and setting expectations that trustees will develop in the role.

However, a study by Mike Hudson at Compass Partnership, in association with Cass Business School, has found at least 50% of boards (of charities with incomes less than £25m) do not currently review their performance.

Trustee resistance to review

Resistance to trustee performance review can arise from the fact that trustees see themselves as volunteers and don’t want to subject themselves to performance review.

Time is another issue. For a chair of a board with 15 trustees, the time commitment to regularly review all board members can be substantial. Chairs can often feel uncomfortable reviewing people they know outside the board and who are their peers.

Boards often fear that undertaking reviews of their governance practice will take time away from the limited time they have together as a board.

There can also be concern about what a board evaluation might uncover and which once revealed, can’t be ignored. Assessments can be “an acid test” for a significant number of governance related requirements such as role profiles, the expectations of the trustee role, selection, induction and training.

In spite of these issues, individual trustee and collective board performance reviews are thought to be a core contributor to better governance and high performing boards. Reviews enable a board to identify its strengths and areas where improvements might be made, hold trustees accountable for their performance and help board members develop a shared understanding of good governance performance.

What is effective evaluation?

Effective board evaluation is about a systematic assessment of how well the board (rather than the charity) is performing in relation to its legal responsibilities and to contributing to the success of the charity.

It looks at the performance of the whole board and the contribution of individual members. In all of this, the ambition should be to ensure that the review process is of benefit to the charity’s beneficiaries.

The Charity Commission’s The Hallmarks of an Effective Charity suggests that a "strong board" is one that can demonstrate that it has in place "a framework for evaluating board and trustee performance". The best performing boards invest resources in their development (time if not financial), regularly reviewing "how things are going" and taking action as necessary.

Where to start

Boards can only achieve optimum effectiveness if systems for regular review are in place that measure whole board effectiveness, the effectiveness of individual trustees, and key aspects of governance practice – and crucially, if the development plans resulting from these processes are implemented.

The task should be approached positively and with the attitude that the effort is justified to ensure charities are getting the very best from their board for the benefit of the charity and those it serves.

It’s important to make individual and collective performance reviews not merely a stand-alone activity, but part of an integrated approach to the development of the board which includes ongoing reflection of governance infrastructure, trustee education, recruitment and succession planning.

It helps if charities include as a "requirement" in the role profile and Code of Conduct that trustees will attend regular individual performance reviews so that there is an expectation from the outset that this activity will be part of the role.

How and when?

Board performance review can be something that is conducted occasionally, annually or as an ongoing activity. Some boards conduct a full review every three years, with lighter touch reviews of a particular aspect annually.

Board evaluations can be undertaken as a self-assessment exercise, but trustees need to be beware of a “check the box experience” where boards say: “Yes, we did a self-assessment; we do one every year (or every other year). Yet, no one can recall where the findings went or what happened as a result."

External reviews can be conducted by someone from outside the board, such as a consultant or even someone from another board who might observe the board in practice and offer feedback.

Good starting points

Here are three steps that can serve as good starting points for charities reviewing governance practice:

1. Keep it simple to start to build a shared recognition of the importance of regular and ongoing review and development, and a culture of review and learning. A good starting point would be to introduce short end of meeting reviews with the chair leading a discussion using questions such as “what have we achieved as a board as a result of this meeting?”, “what have we learnt about the charity that we didn’t know before?”, “how did we perform as a team?” etc.

2. Consider instituting a governance committee to oversee the introduction of a board review if one isn’t already in place. The chair will need to understand and champion the benefits of the activity, helping trustees to recognise the value and longer term benefits for the charity. They can help the board see it positively as part of an integrated approach to the development of their governance practice.

3. Ensure there is a timetable for when any reports relating to the activity will come to the board and this should be part of the calendar of board activities

Individual performance reviews

The Compass/Cass study on governance in larger charities identified "reviewing individual performance" as one of the top 20 drivers of good governance performance.

Individual performance reviews should be seen positively – and introduced positively by the chair – enabling the board to improve, rather than as a negative or judgmental activity and as something that encourages a constructive conversation between peers.

Here are ways to getting started with individual performance reviews:

Keep it simple, but build in good practice from the beginning. Having some formality to the process ensures that there is consistency of approach.

Discuss the principles at board level to get engagement. It is helpful if the chair initiates a discussion about the benefits of individual performance reviews.

Agree who will undertake the reviews. The assumption is that the chair will undertake the reviews, but it is perfectly acceptable for the chair to delegate the task to the vice chair or another trustee.

Agree timing. Set an annually recurring time for the review; choose a point in your annual cycle which allows your board to evidence good governance in the Trustees’ Report section of your annual accounts.

Agree what is to happen to the "findings" of review meetings. It is most effective if the chair collates key aspects of the results of the reviews (without identifying individual trustees), which are then fed into an overall development plan. The chair should stimulate discussion about the process and the outcomes, including any changes and improvements needed.

Trustees can discuss what might be learnt from this and what development activities they suggest for the whole board. This facilitates an integrated approach to discussion and planning the board’s development.

Agree a clear framework for the review process. Agree some questions to help trustees (and the chair) prepare for and structure the review meeting, plus a note summarising details of the board member’s trusteeship (e.g. how long on the board, which committees they are a member of etc.).

Seek feedback which can be a simple process of asking committee chairs for their feedback on members of their group, including attendance, participation and contribution.

Keep a record. It is helpful to keep a note of what has been said or requested in the trustee review. It helps both reviewer and trustee check progress (and whether agreements have been kept) on both sides. This record should be used in the subsequent year in assessing progress made.

Keep the activity alive and relevant. Periodically review the process by asking the board for their feedback, then adjusting the framework appropriately.

Also evaluating chairs

An ACEVO Governance Survey found that whilst 65% of charities said they carried out formal CEO appraisals on an annual basis over half do not undertake the same for chairs. Best practice suggests that every board member should be reviewed and the same approach described above for trustees can be used for chairs.

Cass' Fiona Ash - individual trustee and collective board performance reviews are thought to be a core contributor of better governance and high performing boards.
"Effective board evaluation is about a systematic assessment of how well the performing in relation to its legal responsibilities and to contributing to the success of the charity."
"Boards can only achieve optimum effectiveness if systems for regular review are in place that measure whole board effectiveness."

Charity impact measurement and performance management

The charity sector excels at consensus building – after all, those who are drawn to working in charities are generally caring and considerate people who are interested in building coalitions around the causes they are believe in. For the past several years, there has been a strong consensus built around a new maxim for charity management: impact measurement is very important.

Unfortunately, another consensus has emerged, which has been immeasurably harmful to the development of impact practice. This consensus is the idea that impact measurement is very, very difficult. While there is some truth to this, it is mostly a subtle form of scare-mongering from those who see only the challenges and not the opportunities for using measurement – and it has worked.

The ensuing insecurity has sparked a massive amount of how-to guides, best practice papers, conventions and speeches, with most of us guilty of contributing to this cache of sometimes conflicting insights. The good news is that common sense and practicality are finally beginning to triumph over theory and over-engineering, with strong methodologies and frameworks emerging to provide guidance and shared standards.

Grassroots level progress

Yet at the grassroots level, it seems like little progress has been made. It is still difficult for management to get access to the data and information that they need to make better decisions. It is still a struggle to provide high quality reports without commissioning an army of external evaluators. And most importantly, it is still a hard for many staff and volunteers to see what value the impact revolution has brought to their work on the ground.

Charities seem to be missing an opportunity to not only improve the way that they measure impact, but also to demonstrate their value to funders and the public, and also to improve their own work.

How can we build the skills and capabilities that are needed to truly master measurement as a tool for improvement rather than a source of constant vexation?

REMEMBER WHY IMPACT MEASUREMENT IS SO IMPORTANT. While impact measurement has no doubt been influenced by funders and commissioners looking for an extra layer of assurance – as well as a way to choose between different programmes – it is not without its value and importance for charities.

Measurement is meant to be a tool to improve resilience, performance, and impact. It is meant to provide insight to make better decisions about how one manages a charity. All too often this message gets lost in the pressure to satisfy funders and get the money in.

UNDERSTAND YOUR OPERATING MODEL BEFORE YOU TRY TO UNDERSTAND THE IMPACT OF THAT MODEL. Most charity executives would say that they have a strong understanding of the way their charity works. However, very few would be able to produce hard evidence of the efficiency of their operations. This is clearly a case of "don’t run before you can walk".

If you are unable to generate good numbers about financial efficiency, or human resources efficiency, then chances are it will be a massive struggle to understand the impact that money and those people are driving towards.

Resilience of the operating model

While funders will always be intensely interested in outcomes and impact – after all, it is the very purpose of the charity and the funders – they will also be interested in the resiliency of the overall operating model. And for managers, this aspect of operations is absolutely key.

If one is puzzled as to why impact measurement is not sticking, it is often because a culture of measurement is simply not present in the charity. Starting where measures are easier to calculate, understand and benchmark, such as finance or HR, and providing high quality measurement and analysis in these areas, can be the first part of a cultural shift towards appreciating and understanding measurement as a powerful tool.

Therefore, when thinking about improving how they demonstrate their value to funders – and improving their value to beneficiaries – charities should not concentrate only on impact. There are many ways that a charity delivers value and efficiency, and a truly successful charity will seek to improve on all areas.

SHIFT THE CONVERSATION FROM IMPACT MEASUREMENT TO PERFORMANCE MANAGEMENT. Leading on from this concept of understanding the whole operating model, it is clear that Impact measurement has an unfortunate tendency to appear passive and after the fact. Additionally, it can be seen as separate from other areas of performance management – such as people management and financial accounting.

Finally, it can also be seen as separate from the active, dynamic processes that it needs to contribute to – such as good management, sound decision making, and targeted resource allocation. Combined, these three reputational issues for impact measurement have made it seem like an extraneous extra.

Holistic performance management

Charities need to broaden their idea of what performance is and how it is monitored, by integrating impact into a holistic idea of performance management. Most managers will get a quarterly financial report, but very few will get a holistic report that includes finance, people, operations and impact. By integrating impact into conversations about how we discuss and manage performance, it will become less the mythological tool for funders and more an actual tool to proactively provide critical messages to funders about the value of the work that a charity does.

BE HONEST ABOUT SKILLS GAPS WITHIN THE CHARITY - AND ALIGN THEM TO KEY PROCESSES. Since impact measurement is a relatively new skill, many who have sought to improve their performance around impact measurement have discovered that they lack the talent within their own organisation to be able to gather high quality data and analyse it to derive helpful insights. However, these are often skills that can be built quite easily.

Developing a good understanding of what skills are needed to produce high quality measurement – data collection, data input, data extraction, data analysis – will help a charity to map where they need certain skills or capabilities in their staff and volunteers.

Unfortunately, many of the impact measurement methodologies have focused on high level frameworks that give overall guidance to how impact measurement is part of the organisation. While these are important parts, they do not provide a lot of guidance about the more detailed processes needed to process a referral form or analyse a data set.

Understanding one's own processes

The onus is therefore on the charity to understand its own processes and which skills it needs along the way. While this can be a time consuming process, it is at the most granular level of process where impact measurement actually happens.

LEARN TO LIVE WITH SOME UNCERTAINTY. One of the most common objections to impact measurement is that it reduces complex situations to seemingly simple metrics. Many charities work in fields where the approach has long been qualitative and instinctive rather than quantitative and systematic. Impact metrics, therefore, can seem reductionist.

However, it is also a false paradigm to imagine that a qualitative accounting of a situation is 100% accurate. Most charities work in complex situations, with many different factors and contextual issues. The perfect measurement will never exist, but that does not mean a charity cannot find measurements that are helpful and beneficial to its work, as well as delivering a powerful demonstration of its value in our society.

Aleron's Nicolas Ponset - charities seem to be missing an opportunity to not only improve the way they measure impact, but also to demonstrate their value to funders and the public, and also to improve their own work.
"...very few would be able to produce hard evidence of the efficiency of their operations."
"There are many ways that a charity delivers value and efficiency, and a truly successful charity will seek to improve on all areas."

Achieving more by using your local people resource

Volunteering is a popular topic at present - within government with the pledge to offer up to three days’ paid volunteering in public sector organisations and companies employing over 250 staff; with charities which have a view on this and which might need to be doing more with less staff; and with those who volunteer who will also have a view on why they volunteer and what they do – and how this plays out in a time of reducing public services.

A straw poll of some staff working with me shows there are a range of reasons why people volunteer, what they do and what puts them off volunteering. I realise we work for a charity, so we might be predisposed to volunteering but from my time in the voluntary and community sector I think our replies reflect a range of reasons why people get involved, stay involved or leave.

For example, reasons for volunteering include: a call to action, someone asking for their help, something that used their professional skills, free experience that was fun or experience for their CV or via faith activity. The type of volunteering that people get involved with ranged from fundraising to local youth work to litter clearance on the beach or more involved volunteering such as taking on the role of a charity trustee.

What put people off volunteering included: being asked repeatedly to do more, poor organisation, dull meetings or little volunteer support. On the positive side, the things that kept (or keep) them volunteering included: doing some good, making friends and meeting new people, having fun and getting something out of it, and supporting local community activities.

The benefits of volunteering

Most of us are aware that volunteering can increase people’s confidence, boost wellbeing and help strengthen the fabric of society. It is also vital for many charities, as without volunteers they would not be able to provide activities, events, support or services.

Recent statistics show that over 27% of people volunteer regularly through a group, club or organisation once a month; and 74% of people volunteered at least once in the last 12 months. That’s a huge number of people supporting our communities and supporting charities. I welcome all voluntary activity. Having been involved as a volunteer since the age of 14 I know the benefits it brings.

I want to highlight the role of residents and those who volunteer at a grassroots level - to encourage us all to give a greater voice to those who give their time to help neighbours, friends and community groups in their local area.

Residents working locally can help improve green spaces, run youth or sports clubs, improve access to local services and amenities through community transport, organise events, support people to access training to find jobs, arrange activities around healthy eating or renovate disused buildings. This makes a positive difference to social capital, builds networks of relationships among residents and helps communities to function more effectively – a key ambition for many charities working at a local level.

So how can charities harness the potential of residents to the benefit of all?

Give residents a greater voice

A recent survey we did found that three quarters (76%) of those surveyed agree that residents are best placed to know what is needed in their community; three in five (61%) agree that they would like to be given the opportunity to help decide how funding is spent whilst half (50%) say that they would be more likely to help make their community a better place to live if given more control over decisions about what changes should be made. Almost two thirds (63%) were willing to help their neighbours and community if given the opportunity.

Giving a greater voice to residents and local volunteers – as well as beneficiaries – will help charities identify where change is needed at the same time as allowing those who live, work and socialise in our communities to play a more active role in helping to create this change. It is residents who are best placed to know what is needed in their community and they are often most capable of creating and sustaining positive change locally, supported by the organisations that they trust and respect.

Some charities might face challenges in helping residents become involved with voluntary activity. This may especially be the case where, historically, people have felt unable to make their voice heard about changes that are most needed locally. It may also especially be the case within communities most affected by public spending cuts and welfare reform where community engagement can be a greater challenge, and this can be a barrier for charities working with these communities.

However in my experience you can work with residents and people locally in these communities using a community development approach to identify what matters most to them and how they might help.

Organisations – funders, charities, local government and businesses – have valuable insight, experience and resources, but please recognise the potential of residents to create lasting, long-term solutions in their communities with their friends and neighbours. By working together we achieve more.

Embrace the risk

Handing over more power and control to resident led groups of volunteers can be seen as an opportunity to engage, to enable and to support residents and local volunteers to make decisions that have an impact on them, their family, friends and neighbours. It is a risk worth taking; residents won’t necessarily do the same things as professionals; they might be more outspoken or more hesitant. They might want different rewards or get involved for different reasons.

Residents, volunteers and the range of organisations which support them learn from successes and from mistakes. As I outlined at the start of this article, there are many reasons why people volunteer and get involved with charities and we need to embrace these differences and work out how we can use the skills and interests to the benefit of all those we support.

Handing over more power and control to resident led groups of volunteers helps create more resilient communities which are less vulnerable to wider change and more effective in identifying and addressing need and making the most of opportunities that are presented to them. It helps charities focus their technical skills and expertise where it is most needed, working in partnership within the community to give residents more opportunities to take on responsibility in a way they are comfortable with, whilst not over-burdening them.

Encouraging and supporting resident led development is an important long term approach worth pursuing, even if tangible progress or success is slower to deliver whilst they gain ownership, increase engagement and bring a level of respect for what is being done within their local area. Ultimately, it will lead to stronger communities.

By focusing on engaging residents and local volunteers and working more collaboratively with communities, charities can play a more effective role in creating positive, lasting change in communities where it is most needed. I encourage more charities to take this step.

Local Trust's Debbie Ladds - encouraging and supporting resident led development is an important long term approach worth pursuing, even if tangible progress or success is slower to develop.
"It is residents who are best placed to know what is needed in their community and they are often most capable of creating and sustaining positive change locally..."

Putting the emphasis on digital awareness in recruitment

It’s no secret that the digital landscape has revolutionised marketing as a discipline. The transformation has been likened to the beginning of the industrial revolution: Everyone knew the use of machines would impact the way we worked, but no one was exactly clear how wide-ranging or fundamental the changes would be. While the digital revolution has impacted every corner of the businesses landscape, the charity sector has arguably the biggest opportunity to gain from this shift in communications and consumption.

Effectively utilising social platforms is an extremely efficient way to maximise return on investment in terms of brand recognition and, ultimately, fund generation. Charities have – for the first time ever - the potential to reach millions of potential stakeholders without the overheads associated with traditional advertising spend.

You only have to look at the outcomes of campaigns such as #icebucketchallenge, #thumbsupforstephen and #nomakeupselfie to be inspired by the power and reach of online channels – but access to the tools is not enough. Charity leaders need to seek out millennial talent to unlock the possibilities that social media can bring.

Pipelining future leaders

In order to compete for share of voice, charities need to not only attract suitable candidates, but also retain and develop digital expertise to pipeline future leaders. Where skills historically associated with fundraising - such as experience in traditional media relations and the ability to build relationships with donors - are no less important than they have previously been, contemporary charity management requires an overarching understanding of today’s digital landscape.

The leadership talent crisis within the charity sector is a hot topic of discussion. According to Tony Elischer, leader of Think Consulting Solutions, a leading International consultancy dedicated to not for profit fundraising, it’s never been harder to find, and more importantly keep, great people. “As long as turnover remains high, we’ll never get the traction, respect and results that we need. The only solution to this problem is to grow, nurture and invest in leadership.”

Talent pipelining begins at entry level, and new recruits should begin by demonstrating a strong understanding of the digital marketing mix, working towards solid and measurable goals, whether that is driving traffic to a particular location (on or off-line), boosting sales, or increasing donations. Candidates should understand all channels and how they complement each other in order to develop an integrated approach to channel management.

Brand story tellers

Content creation ability should also be top of the wish list for charity employers looking for candidates who can act as a brand’s "story teller". Creativity is key - you do not have to have a huge budget to create powerful content.

Cancer Research UK recently reported that some of the most effective posts from the last year were photographs of staff members holding hand-written "thank you" banners to recognise donations. Similarly, Historic Royal Palaces introduced its poppy campaign by posting photographs from the factory where the flowers were being manufactured, inviting consumers in to experience the installation from the very beginning.

Digital natives – defined as those born or brought up during the age of digital technology and so familiar with computers and the internet from an early age – innately use their knowledge and their network to identify and prioritise the best platforms. This includes the ability to develop a channel strategy that moves away from brand "spam" and encourages more engagement; one which places high levels of importance on encouraging two-way dialogue with stakeholders by responding in a timely and personable manner.

Cancer Research UK’s feed, like that of many charities, is manned between the hours of 09:00 – 23:00 to ensure continued engagement. Likewise, the success of Historic Royal Palaces’ campaign to promote the poppy installation at the Tower of London was driven by sharing consistent photographic, video and visitor feedback across its channels.

Building future-proof teams

It is vital that we don’t underestimate the importance of social channels when building future-proof teams. The iconic #NoMakeUpSelfie hashtag, which took Cancer Research UK completely by surprise raising £8 million in support for the charity in just six days, is a case in point. However, social channels are - by definition - uncontrollable and unpredictable. Therefore, communications professionals must continue to respect the audience and continue to learn to be agile and responsive.

The Salvation Army capitalised on the trending #TheDress hashtag by aligning its "Why it’s so hard to see black and blue" campaign to the phenomenon. The charity capitalised on the debate as to whether an image of a dress was gold and cream or black and blue by drawing attention to domestic violence. This ground-breaking example of social marketing is indicative of both the level of creativity and pace of response that the most innovative talent can demonstrate.

The advent and growth of social and digital channels continues to transform how charity brands interact with consumers. We are in an era where these platforms are not simply a "nice to have" but rather form a crucial part of the overall communications mix. Consequently professionals in this space must constantly evolve and develop in order to keep up with the pace of change.

Inspiring engagement and action

Tomorrow’s leaders must inspire vision, conversation, engagement and action, both internally and externally. They need to drive the use of new channels and a new approach to communicating. Ultimately, they must be evangelists of new marketing communications practices.

Today’s pioneers have the potential to fill the leadership talent gap. However, it is essential that we recognise the skills of the next generation of talent - and allow room for them to experiment and flourish - if we are to retain and develop future-proof expertise. The success of charities depends on innovation in digital communications – fail to realise star talent and it could be lost to your competitors.

Capita's Holly Chase - it is essential that we recognise the skills of the next generation of talent, and allow room for them to experiment and flourish.
"...contemporary charity management requires an overarching understanding of today's digital landscape."
"Creativity is key - you do not have to have a huge budget to create powerful content."

Encouraging necessary innovation in charities

Competition for hearts and minds in the charity sector has never been stiffer. While the number of charities has remained relatively constant, there are many more ways in which those charities can reach donors and supporters. Charities have never had it tougher, both in terms of their fundraising and their day to day operations. So the need for charities of all sizes and types to be innovative and bold to stand out amongst supporters and donors has never been greater.

But what is the best of way of achieving this and how can a charity come up with the ideas that will make it stand out, attract fundraising and develop new ways of delivering services?

A major asset for most charities is the people who work with, and for it. This is a knowledgeable and committed group, which can include staff, supporters, trustees and other partners. Capturing the thoughts, ideas and innovations of these people not only provides a stream of ideas, but encourages collaboration and increases engagement amongst an extremely important community for any charity. This can make a significant difference as charities seek to remain strong in a competitive third sector.

Need for ideas and innovation

A failure to innovate, especially in fundraising, means that revenues are going to be impacted. Without revenue, it makes it harder for charities to make the kind of changes they are aiming for, so innovation in the charity sector is critical in allowing charities to achieve their mission.

This means that big ideas are very much in vogue right now. People talk about game changers, being disruptive, ripping up the rule book and other hyperbolic terms when looking for the light bulb moments that will have a genuine impact, whether they work in a business, public sector organisation or charity.

The importance attached to ideas and innovation can be seen by the rise of the innovation officer or creation of innovation teams within charities. These individuals and small teams look to generate the ideas that will help that charity stay ahead of industry trends, and adapt quickly and effectively to change. Charities have different ways of approaching the task of generating ideas and new services, with each charity having different levels of resource, skills and experience.

But one thing is clear: an innovation team or officer is not essential for a charity to be innovative.

Innovation is about people

The truth is that truly disruptive, game changing ideas are few and far between. And while such ideas sometimes occur in a flash of inspiration, more often they need time to develop and grow, with informed stakeholders being able to collaborate on those ideas. Great breakthroughs are usually the result of a collection of small ideas that have come together and developed or merged to become major innovations.

But what’s the best way to go about collaborating on new ideas, in a resource and time pressured charity? The answer lies in empowering staff and volunteers, and in providing them with a platform with which they can submit and discuss ideas. The legacy structure common in many organisations – boss at the top, issuing instructions to the staff – is archaic in 2015. Modern fundraising is much more open, involves collaboration at all levels and operates a much flatter structure.

Anyone who works in a charity is capable of having an idea that contributes to the on-going operations of that organisation and it stands to reason that those people would hold valuable and insightful ideas. Yet charity staff are rarely asked their opinion on things outside their own particular remit.

Creating a culture of innovation in your charity is therefore of paramount importance, and this must begin with the leadership team. As innovation is a top down process, leaders must be willing to work with new ideas and take risks in order to demonstrate to others the benefits of doing the same. Innovation involves taking a collaborative approach toward interaction within and outside the charity, in order to create an open culture of debate for new ideas, so a few considerations from leaders must be taken into account.

This will encourage others to trust that their charity is an environment where they can submit ideas and innovations, and those ideas will be discussed, valued and encouraged. It doesn’t always have to be significant, ground-breaking ideas. Asking for contributions on smaller things such as naming of meeting rooms for example, can be just as inclusive as asking for ideas on strategies, new fundraising tactics or new donor groups to target. There is no reason why staff can’t be consulted about both. The same with donors and volunteers. And don't forget the trustees!

Benefits of collaborative innovation

There are many benefits to be had from looking to capture ideas from staff and other charity stakeholders. A major part of this is in the actual ideas generated, innovations that may improve fundraising or ways in which a charity delivers its services. But involving staff and stakeholders in the future direction of the charity, letting them know their opinions are valued, making them feel they are equal and giving them a platform to be involved in the organisation, also makes compelling encouragement for staff and stakeholders to engage.

It motivates and inspires the workforce, and allows charities to identify and retain the best talent. Employees, and in particular those born after 1990, no longer want to adhere to the traditional workplace structure and, according to the Intelligence Group, millennials prefer a collaborative work culture rather than a competitive one. This research also revealed that whilst many millennials would like to be their own boss, if they did have a boss, they would want that boss to serve more as a coach or mentor.

Meeting younger employees' expectations

This generation will represent 40% of the total working population by 2020. Charities must start attempting to meet these expectations now – or they risk losing talent. By involving employees in the future direction of a charity, they are far more likely to remain engaged, motivated and loyal.

The people who help a charity are, almost without exception, that charity’s greatest asset. The paid staff, trustees and donors, as well as the volunteers who give up their time to support the cause, all empower a charity and make an enormous contribution to its success.

Providing the tools and culture with which they can submit and develop ideas, and ensuring that those ideas are acknowledged, discussed and valued by those who run the charity on a day to day basis can play an enormous role in a charity’s ability to deliver on its mission. Ideas and innovation are truly that important.

Wazoku's Jon Landau - involving staff and stakeholders in the future direction of the charity makes compelling encouragement for them to engage.
"The importance attached to ideas and innovation can be seen by the rise of the innovation officer or creation of innovation teams within charities."
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