Clothes collections: needing a makeover?

The fundraising technique of clothes collections may be a traditional mainstay for our sector, but has been recently having some perception issues. To donors, charity clothes collections represent a convenient way of giving away items that are no longer wanted; yet the increase in bogus collections means that members of the public can sometimes find it hard to tell a legitimate ask from an unscrupulous one.

To charity fundraisers the collection of clothes for reuse or resale can be a crucial income generator - yet it’s becoming an increasingly crowded marketplace, with donors often receiving many requests from charities to donate items in this way. Add into the mix recent sensational and negative media reports on charity clothes collections, and the public perception of this fundraising form becomes somewhat blurred.

It is heartening to see these issues being taken up at the highest level, with a Government roundtable debate on bogus collections meaning that a joined up discussion with all relevant stakeholders present and engaged took place at the end of last year. The Institute will soon be bringing its House-to-House Code of Fundraising Practice which clarifies the standards required for the charity sector and donors alike.

What is crucial in all of this is for the sector to work together in presenting a united front. We need to acknowledge that there are a range of models of clothes collections which it might suit a particular charity to employ and that there is no standard rule as to which arrangement is better. It depends on the individual circumstances and make up of the charity in question.

At the end of the day, what is at stake is the giving public’s levels of trust and confidence in charities. If there is uncertainty around techniques, what constitutes a legitimate fundraising collection, how charities use donations of clothes and the profits they keep from such gifts, people’s comprehension of the benefits of this form of giving will naturally decline.

Of course, individuals are more inclined to make judgments about a charity based on what they see of its activity first hand. Some people may have experienced the work of a good cause through being a service user or beneficiary. However, more often than not it’s fundraising that is the mode of engagement with individuals. And it stands to reason that the most ‘visible’ forms of fundraising, such as house-to-house, or face-to-face are shop windows for the rest of the sector’s income generating activity.

This all feeds neatly into the Institute’s accountability and transparency agenda; openness around all issues where fundraising is concerned – costs, salaries and required investment alike - is always encouraged. There are some basics of fundraising which should be covered off as standard by charities. One such example is the premise that money raised needs to be used by charities as intended by donors.

There are no two ways about it. The tense times we are still experiencing as a sector mean an increase in charities’ demand for funding. Crucially, it’s up to all of us to fulfill the missions of our organisations and, in all of the fundraising methods we use, engender trust in service users and donors alike.

Louise Richards, Director of Policy and Campaigns, Institute of Fundraising

Building a great reputation

How do you create a great reputation? Is it simply the case that great reputations follow from great work? Hardly, Bernie Madoff and Icelandic banks had great reputations until a few years ago. Such reputations are a product of effective communication, but they quickly fall apart under scrutiny. To build a reputation on a solid foundation takes more than effective communication. It takes a clear understanding that communicating the difference that your organisation makes generates long-term trust and confidence.

There are three stages to building and maintaining a great reputation. Firstly, you must engage your stakeholders and find out what they want to know about your organisation. Secondly, you must be proactive and transparent about demonstrating the difference your organisation makes. And thirdly, you need to posses an understanding of how people receive information about your organisation. Let’s explore each stage in more detail.

All your stakeholders will have questions about your organisation, but they won’t necessarily ask them. And questions that remain unanswered will be filled by assumptions, colouring the perception of your organisation, and therefore your reputation. A good example is direct mail. Many charities use this fundraising method to generate income, yet only 9% of the public believe that it works. The discrepancy is due our failure to communicate how effective this direct mail is at generating income. It seems that when most people receive direct mail they assume it’s a waste of money, and the logical conclusion is that ‘this charity wastes money, so I won’t give to them’.

We must address stakeholder concerns wherever possible. We tend to get pre-occupied tinkering with the tone and structure of key messages while neglecting to engage stakeholders on issues that, while seemingly minor, can fundamentally effect how they see our organisations. It’s simple: ask them what they want to know and answer them.

Equally important for building a great reputation is to communicate the difference you make, and do so with openness and honesty. New Philanthropy Capital recently released a study, Talking About Results, in which they compared how well charities communicate the difference they make. The paper found that charities still struggle to communicate the most important information.

Slogans, logos and branding can create a great reputation, but relying on these techniques alone leaves your reputation vulnerable. Talking about your impact is the difference between saying your organisation’s great and proving your organisation’s great. Subsequently, it’s the difference between building fragile good will and building trust and confidence. As charities, we possess the former, but we desperately need the latter.

Once you have addressed your stakeholders’ questions and concerns, and communicated the difference your organisation makes with openness and honesty, the final stage of creating a great reputation is to understand how information is delivered.

Information about your organisation will reach people in one or more of four ways: by direct experience of your organisation, through your communications, through the media, or by talking to friends and family. The media and the public (friends and family) are the most powerful drivers of opinion and reputation, and we have the power to harness them by taking a big picture look at the purpose of our communications. Actively targeting the local media and the public with messages about your effectiveness will build your reputation over time, while limiting your communications to service users and funders will also limit the number of potential advocates of your work.

Sadly, when charities begin tightening their purse strings the communications budget is often an early casualty. We need to resist this temptation. Now more than ever we need to shout about our success; we need to demonstrate the difference we make with openness and honesty.

How much should charities care about transparency?

The ImpACT Coalition is all about encouraging charities to become more transparent to their stakeholders. But how seriously should charities take transparency? And if you do get serious about transparency—signing up to the ImpACT Coalition’s Transparency Manifesto, and taking practical steps to being more open about your work—will anyone notice?

In particular, will donors care? At New Philanthropy Capital (NPC), we’ve been working with donors for the past nine years—helping them to focus their giving on creating the greatest impact. But there’s no one-size fits all model for understanding why and how people give, and little research (so far) on how charities’ transparency influences their giving.

So what do we know?

Well, the Charity Commission’s survey of public trust in charities, launched this month, shows that charities are among the most trusted institutions in society, coming closely behind doctors and the police. It also tells us, worryingly, that the most important factor influencing people’s trust is the proportion of donations that ‘gets to the end cause’. Concerns about cost ratios were seen as more important than making an impact—a reversal from the last survey in 2008.

There is also a brilliant piece of research by Hope Consulting in the US, which looks at donors’ motivations for giving. It found that donors can be segmented according to different motivations. The report suggests a segmentation into six types of donor—Repayer, Casual Giver, Faith Based, See The Difference, Personal Ties, and High Impact. It also finds that ‘major donors’ share the same motivations as regular donors within these different segments.,

On a straightforward reading of these findings, charities would be forgiven for thinking three things:

1. that transparency isn’t an urgent priority because donors already trust them;
2. that any efforts to be more transparent should focus on showing how little money is spent on overheads; and
3. that any efforts to be more transparent about impact can focus purely on High Impact donors, rather than regular donors.

I’d warn against drawing these conclusions. Acevo’s survey last year showed that many donors’ perceptions of charities, and therefore of factors contributing to trust, are somewhat divorced from reality. Those that don’t work in the sector often have antiquated visions of charities staffed only by volunteers and funded only by donations, which should all be spent at the front-line and not on wasteful things like offices and chief executives.?

There is a big discrepancy between what donors say they want to know (how the money’s spent) as opposed to what they need to know (what that spending achieves). And charities often don’t make efforts to challenge this. It can be a lot easier to stick to working out your admin costs than it is to work out your impact. As NPC’s forthcoming paper on impact reporting shows, charities are not yet routinely communicating their outcomes or impact in their annual reports, annual reviews, impact reports or websites, tending to talk instead about outputs and internally-focused objectives.

So how much will donors care if charities get more transparent, particularly about what’s important—what they achieve? Some may not care too much, as long as a scandal doesn’t emerge that destroys their trust. But some will, particularly the High Impact segment of donors. And greater transparency may encourage donations from those that aren’t giving now because they don’t trust charities. In time, greater transparency will help all donors to become more informed donors (just like all consumers become more informed consumers), and their trust will become more directly linked to how well charities communicate the difference they make.

If I were a fundraiser, I wouldn’t be encouraging my board to invest in more of the same old fundraising techniques, with ever-decreasing returns. I’d be encouraging them to get ahead of the game and meet the informed donor’s needs. My message to fundraisers is this: Work hard to capture and communicate the difference you make. Use that to start an honest dialogue with donors based on trust and understanding. And don’t throw all your hopes into a major donor campaign—see what happens if you kick off an informed donor campaign instead.

Study of Navels? We might be onto something.

Last week I spent most of the week at the Leadership Trust with my Clore Social Leadership Programme, exploring my inner navel. Whilst my navel is still very similar to the last leadership course I went on to study it... there was a little something else that caught my eye.

The Leadership Trust has a 'step' model for helping you review your strengths and areas for development as a leader, nothing new there... but what is interesting is the link they have made between trust in leaders and their ability to honestly review their own performance and act on what they find. For mere mortals the process starts with doing something successfully or failing miserably but rather than just leaping back into the next task taking time out to ask yourself how did that go? how do I know? From this point of becoming self aware about what we are doing and the impact we are having we go on to decide what we need to change and exert some self control to make those changes.

Linking this step back to transparency I wonder how many of our organisations, despite confidentially reviewing our performance are failing to take this step of really changing our behaviour as a result of what we see and hear. is this why we sometimes lack the courage to publish that critical evaluation online?? Because we can't promise it won't happen again?? It isn't easy - no change programme is -but it is an essential step before we can achieve the real value of facing up to what is good and what isn't, developing greater 'self-confidence'.

Those organisations I have seen recently that are striving to become more publicly transparent seem to making a step beyond simple organisation improvement as a result of feedback but are developing a sense of confidence about their ability to accept feedback and improve as a result. Take someone on a diet, it isn't realising your over weight or even starting the diet that makes you feel good - it is seeing the pounds come off and knowing you can.

Several CEO's have told me recently that they worry that becoming more transparent will create a culture of risk aversion in their organisations... but if you think about it, that isn't what happens when we become more confident - we actually try new things and take more risks. Innovation thrives in a confident environment.

As the confidence of the organisation grows another magical process begins to happen, 'self-realisation'. The point on the journey where you become comfortable with who you are, the ability to open yourself up, actively seeking advice, feedback, we ask for support where we are weak, gaining the respect of others. ......And these are the people we trust, these are the people we want to collaborate with, the people we want to succeed. Imaging your organisation here.



NB:
The best part of dieting (anyone that says otherwise is not transparent) is actually when some else notices - this too is self-realisation through the respect of others and also feels great!