The Benefits of Transparency in Charity Governance

by | May 3, 2022 | Emma Willder

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How transparent is your charity in all communications and activities?

For charities, both big and small, to not only run effectively but honestly and with integrity, good governance is key.

However, we know that there are many elements to achieving good governance, and within the Charity Governance Code, we, of course, know that transparency is one of the main pillars.

We also understand the vitally important role and responsibilities your governing board hold.  Responsible for leading your charity in ways that ensure transparency and accountability at all levels.

But how can you ensure that you’re transparent in all you do? And what is the impact of becoming more transparent in your activities?

Transparency in governance

  • Is the charity open and honest about the work they do?
  • Do the public trust that the charity delivers on the service offering they are bound by.
  • Is there accountability at every level?
  • Is there two-way communication where success is celebrated, and lessons are continually learnt?

Benefits of transparency in charity governance

Builds trust

Charity is all about trust.

When people become involved with a charity, they aren’t just giving time, money or donations; they also give a little piece of themselves. As such, they feel entitled to know exactly how the charity is spending the money and if this is legitimately representing its beneficiaries.

Increases confidence

As confidence in the charity grows, the charity will earn legitimacy.

Communicating and widely publicising work, activities, and funds allows people to have confidence in the work that you do. Hence, more stakeholders come forward to support the charity and help you achieve more, building and establishing wider networks, social communities, and securing ongoing support and engagement.

Improves effectiveness

By talking more openly and having that high level of transparency in communications, you can also improve effectiveness. Goals and objectives are clear and focused, lines of accountability are clear and established, and all interactions and communications are guided by the values, ethics, and culture of the charity.

Increases fundraising initiatives

As trust and confidence grow, fundraising, support, and donations will also grow as people believe in you – a charity that has nothing to hide, with public trust in the governing board that all resources are used appropriately.

An increase in beneficiaries is a great step and a big benefit to small charities from a promotional and fundraising standpoint.

How can you be more transparent as a charity?

As the Charity Commission states, “if it’s not written down, then it didn’t happen.” This means that all notes and minutes of meetings must be documented and recorded in the most appropriate format. This helps to provide accountability, highlighting clear lines of responsibility, reporting, and escalation.

Ensure a regular and effective communication strategy – focus on purpose, values, work, activities, and achievements. Your communication needs to be transparent, well-publicised, effective, and timely. Look to publish high-quality information tailored to the different stakeholders. You need to be accountable to the people you serve. This can include producing annual reports and publicising fully audited accounts. You should never look like you’re trying to hide something by only publishing half of the story/information.

Regularly review risks – what processes do you have to manage these? How effective are these? Are there clear lines of communication between executives and trustees? Ensure all risks and complaints are dealt with constructively, impartially, and effectively.

Do you have sufficient resources? I.e., check you have the right people carrying out the right activities, with clear lines of responsibility and reporting. Have the right policies in place and communicate these widely. Ensure staff feel acknowledged and protected. Embed a speak-up culture where appropriate.  For smaller charities, where those running the business may wear many hats, you can support culture, activities, and the development of the correct policies further by outsourcing specific areas, such as finance, HR, fundraising, etc.

Make decision-making inclusive – include all stakeholders in charity decision-making, allowing you to make the most informed decisions about the future direction, aims, objectives, activities, and more. Ensure that all stakeholders are ready and armed with the right information whenever asked questions. If trustees have a complete and robust oversight of the charity’s operations and structure, considering the complexity, scale, nature of the services provided, and all associated risks, the more informed the decision-making process will be.

Directors, CEOs, and Managers of the charity (those who ensure the day-to-day running) should have confidence in identifying failures. To protect others from harm and work incredibly closely with all trustees. Regularly reporting to the board on significant incidences and providing assurances on the quality and safety of the charity’s activities.

Work with an external advisor – an advisor who gives the right advice and understands the complexity of charity governance. The entangled elements involved, what good governance truly means, and the benefits it can offer you.  

Openness, transparency, accountability

The benefits of transparency in charity governance focus on these three pillars. They are fundamental for a charity’s reputation and success as well as the success of the sector.

At Beyond Profit, we believe that those charities with good governance will make better decisions and be more effective in the decision-making process. This is why we work with small charities to provide you with the skills, knowledge, and expertise to meet all stakeholders’ needs and manage the Regulator’s expectations.

We want to help you and your trustees be the best. Delivering on your charity’s purpose for public benefit in the most effective way.

Our expert governance team can help you with communicating and consulting effectively with regular reporting, well-publicised processes, up-to-date policies, clear lines of accountability, and more.

Transparency in charity governance has never been so important; make certain that your charity has good governance in place today, call our team on 01204 582 104 or email your requirements to [email protected].

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