Do you trust your bank? So why should people trust a Charity?

Trust has to be earned, and re-earned

So the other night I found myself watching Mary Poppins, I know, I don’t know why or how, only that it was about 2.00am and I had a kebab!

Anyway, I was watching the bit in the bank when the little lad won’t hand over his penny and this leads to a run on the bank. How ironic I thought, how modern is this film?

You see trust is the cornerstone of all organizations, it doesn’t matter how big or small, how good your PR machine is. If people don’t trust you, you’ve had it!

So what does that mean for us?

Third Sector recently reported that incoming RSPB chair Kevin Carey has questioned the efficacy of current charity law, asking instead for a new definition of social gain.
In a concern which seems to particularly hinge on whether trustees should be eligible to be paid, he asks:

Who says charities should have extra controls in case we hoodwink the public when we have a long record of trustworthiness that far exceeds other sectors?
Last year Mark Thompson made a speech on trust and public implications, namely the BBC. He said “Trust in a given institution may be based on a great tradition and great inherited values, but it depends on what you do today. It has to be earned and earned again.”

In other words, our sector’s ‘long record’ would be as to nothing if there were a clear and public example of a breach of trust that emerged tomorrow.

Last year an NCVO news article reflected on Thompson’s speech. They drew out the fact that high levels of trust associated with public sector and civil society institutions have negative, as well as positive implications: put simply, we expect more of them, and they are easily broken.

Sorry is the hardest word to say – “I’m giving a tenner to charity” is easier
If you break trust, you have to be really sorry. Or at the least, you have to be seen to be really sorry. Cue MP’S and there cheques “I’m giving the money back” Did that make you trust them again?

Interestingly, in the raft of television boo-boos of 2008 (where prize money was effectively taken under false pretences), from Ant and Dec to Blue Peter, there was one response: “We messed up. We’re sorry. To show just how sorry we are we’ll give the money to charity”. This is charity as the hair shirt, somehow trumping a simple return of funds.

A donation to charity allows you to implicitly admit guilt without explicitly saying so.

There are three implications from this: first, there is a key understanding that the hurt caused by a breaking of trust is emotional, not transactional – if it were the latter, simply repaying would be the obvious solution [this emotional reaction to trust failure is shown in a comment on Carey’s suggestion by someone who describes himself as “a charity beneficiary who feels well and truly hoodwinked and used”]. This response isn’t rational – but it is pervasive.

Second, charity giving is in this sense a kind of penance; a way of saying “look what I’m giving up” it’s your 3 Hail Mary’s

And third, if charity is capable of offering absolution, it must itself be beyond reproach and entirely trustworthy.

Trust v. legislation

All in all, it’s not been a good year for trust, what with duck houses, claining for DVDs of oneself speaking on ensuring value for taxpayers money and the like. So why try and make a claim now for a move back toward a reliance on it in our sector?

Because it’s very time consuming and costly to operate without trust.

This is the basic premise behind Francis Fukuyama’s classic Trust. This shows the competitive advantage of a high-trust society: you can get things done easily through personal connections, with reputation ensuring an agreement won’t be broken. This situation is compared to a highly legalistic and even litigious society, where costly mechanisms ensuring fair play are imposed onto a system rather than being inherently understood within it.

Of course, this has implications within organisations as well as for the sector as a whole: if trust - essential to the smooth efficient running of informal, personal networks - is broken, it’s necessarily to implement slower, more costly formal guidelines and hierarchical working practices. [Karen Stephenson has produced excellent work on this area, analysing the interplays between hierarchies and networks – ie relationships and structures built on authority and trust respectively – at an organisational and inter-organisational level. The problem is, of course, that the two systems – trust-based and legislation-based agreements - are at play at once. And funny things start happening when we 'pollute' an honour-based system with transactional-type checks. Hence our anger when bankers refuse to pay back bonuses which they are entirely right to keep, contractually speaking, or MPs defend claiming second home allowances that fit perfectly the letter of the law. (I am not in the wrong, but I will pay the money back anyway !)

Implications of a [civil] society without trust

If we presume like all other organization the public will now have less trust in our sector, then we need to talk more about the need to become “transparent and adopt new mechanisms for accountability”. This is currently being played out. For example:

Transparency

In the wake of politician’s expenses being released NCVO’s CEO Stuart Etherington was quick to publish his expenses. This degree of openness is crucial to building trust.

Mechanisms for accountability

The Charity Commission has increased the visibility of its investigations into charities.
It is also developing mechanisms for assessing the public benefit of a charity – in other words, an organisation’s very status as a charity.

So there seems to be evidence that this kind of legislation and demand for increased openness will only increase.

Kevin Carey describes the current state of law as “unnecessary, heavy-handed and [a hindrance]”. He’s right, but only to an extent. The problem with trust is that it’s essential, but hard to keep going, and easily lost. Or, as Benjamin Barner put it in an article on the credit crunch,

“Trust is at once both precious and precarious, foundational but fragile.”

When we stop trusting people to use public or donated funds or time efficiently and effectively, we have to create measures to counteract this inherent lack of trust. And such measures are necessarily costly, irritating and time consuming. Charity law is an unnecessary burden until something goes wrong and trust is broken. Then it becomes very necessary indeed.

Baroness Warnock, speaking in the first Hinton lecture on altruism and philanthropy in 1998, arguably foresaw the Banking Crisis as an issue of trust. It could equally be a warning for our sector.

institutions […] collapse if those who belong to them themselves lose the idea of honesty [and] trustworthiness.

We - as individuals, organisations, and as a sector as a whole - need to continually work to create, build and keep trust. At the same time, we have to understand that regulation is a necessary check that must exist to ensure that institutions – and the sector – can continue to operate if that trust is ever lost.

Trust in charities is a key driver for the sector, It only takes a small boy to start a run on one the countries largest institutions, so we need to keep our guard up, don’t be complacent, we have to work at earning trust.

Andy Guile

Thanks to NCVO Foresight for bases of this article