This week’s news that the Charity Commission has suspended the website Charitygiving.co.uk has caused more than ripples of alarm through our industry.
It has created “serious concerns about the trustees’ management of the fundraising portal and the charity’s financial situation”. It has prompted media attention and responses from similar services, like JustGiving, to reassure their users, demonstrating rigour in their practices of ring-fencing cash and controlling how it is released.
Much has been written about the money charities may miss out on because of the potential financial situation the site is in, which is of course extremely bad news. People gave money in good faith to those charities and the charities deserve to receive it.
But, relatively little has been said about the donor side of things, other than the site being suspended to try to protect the money they had raised.
The question is: ‘Do donors understand how their money gets to their chosen causes?’ and I suspect I know the answer is ‘not really’ in the main, because it’s quite an opaque business.
When you work in this sector you know who charges what and why, when the payment runs will be, the pros and cons of the payment processors’ fees, and so on. But when a person sponsors a friend £20 through a Facebook fundraising page, or puts loose change in a collection box, there is no clear understanding of how that money will flow through the system.
Banks and financial institutions have come under massive pressure in the past few years on matters of transparency. People have become aware that the small print, or lack of it, actually really matters.
I would suggest it is now time for the charity sector, perhaps even the Charity Commission, to take the initiative and explain to the general public how charities actually receive donations. Granted, this is not an easy task and many might say it has the potential to confuse donors and even put them off giving.
But, if you want to give people confidence, lets learn from the financial services industry. Our donors need to know the full facts and it is up to us to make it clear and easy to understand.
Dan Martin is director of strategy at Chameleon