After a bout of bad governance in charities and not-for-profit organisations in Ireland, trust in the sector is at an incredible low. For charities to continue their work, they need to build back the public's confidence. Diarmaid Ó Corrbuí explains how accountability and transparency can achieve that goal.
Only 50% of the public trusts Irish charities, according to recent research by nfpSynergy. This is below the level of trust in our schools (74%), the Garda (62%), the EU (55%) and the civil service (53%). Some consolation might be taken from the fact that trust in charities was above that of the banks (41%), but our banking institutions are on the long journey of trust-recovery after the banking failures 10 years ago.
Back in April 2012, charities were getting a trust score of 74% but they fell to a low of 43% in November 2016 after the fallout from the Console scandal, and upward progress has been ever since. Charities need to continually work on generating and building back public confidence. Major failures in corporate governance by charities, such as Console and not-for-profits like the Football Association of Ireland, are extremely damaging for the sector as a whole, particularly given the criticality of public trust for charitable organisations and their sustainability.
Restoring the public trust
To restore and build public trust, charities need to be strongly committed to the principle of accountability and transparency – one of the six core principles in the new Charities Governance Code. Grappling with change and implementation of a new governance code is not always easy, especially with limited resources. The Charities Regulator itself has said that 2019 will be a year of learning before registered charities are expected to fully comply with the Code in 2020, or report on it in 2021. Taking the steps to apply the six principles of the Code will make its implementation – and, in turn, building the public trust – that much smoother.
Luckily, there is a good range of guidance available from the Charities Regulator that can assist, as well as a number of resources from other organisations (e.g. Carmichael, The Wheel, Chartered Accountants Ireland, etc.) that can help charities develop and embed good governance practices.
Charities could also consider entering the Good Governance Awards. Investing time and effort in such an initiative can really build the public’s confidence while showing the charity’s commitment to improving its organisation’s accountability and transparency.
The charity and not-for-profit sector has long been an important backbone of our society and communities across Ireland. The selfless desire to help others is core to what they do as trustees, volunteers and staff working in the sector. Through good governance and transparency, those within the sector will earn back the trust they deserve.
Diarmaid Ó Corrbuí is the CEO of Carmichael.
Carmichael established the Good Governance Awards for Charities and Not-for-profits in 2016. The 2019 awards are now open for entries, closing date 13 September. For more information, see the awards website at www.goodgovernanceawards.ie.
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