Charities are not taking steps to improve their transparency with information about admin costs, trustee expenses and chief executive salaries “in a pdf and difficult to find”, new research by nfpSynergy has found.
The research consultancy carried out 'transparency audits’ of 50 charities to see how transparent their websites were and how easy it was for the public to access information about governance, finance and the charity’s impact.
Researchers looked for 15 pieces of information at a variety of well-known and lesser-known charities’ websites. The charities worked across more than six sectors and were a range of sizes, including 13 with an income of under £10m and 15 with an income over £15m.
Finding controversial information such as admin costs, trustee expenses and chief executive salaries took more than three minutes to track down and were likely to be relegated to a pdf of the charity’s annual report.
Information, including whether the charity was a member of the Fundraising Standards Board, the number of people paid more than £60,000 and CEO salary, the level of fundraising costs, and the number of volunteers, was typically found in charities’ annual report, the study finds.
The report questions whether including information in a pdf is being transparent, when a donor would have to go through more than 50 pages of figures and notes to find it.
In the wake of the media furore over chief executive pay last summer, transparency and public trust became pressing issues for the sector.
NCVO published a report on chief executive pay and transparency, which recommended that the level of a CEO’s pay should be included within two clicks of the charity’s homepage. The latest in the series of Managing in the Downturn reports, published in April, by the Institute of Fundraising, the Charity Finance Group and PwC, found 50 per cent of charities surveyed said they had improved their transparency within the last 12 months.
But nfpSynergy’s report concludes: “Charities are better at talking transparency than actually being transparent. Put very simplistically, we found that the positive, qualitative information is on the website and the stuff that charities feel might worry people, usually numbers-based, is in the annual report pdf.”
The transparency trend
Joe Saxton, founder of nfpSynergy, said: “Since the media storm surrounding CEO salaries, the word ‘transparency’ has been very much in vogue, but this report shows that the claims aren’t really matching up to reality.
“It would be a brave charity that stuck its neck out as the first to shout about this information, but surely it’s time for the sector as a whole to try. People don’t really understand how charities work and this is a missed opportunity to innovate and help them become better informed.”
The report highlights some best practice examples of charities being more transparent, including from charities who were not part of the audit. Concern Worldwide has a section on its website called ‘transparency’, which discusses common trends that have arisen in the transparency debate, including a direct link to a page dedicated to justifying their CEO’s salary and links to the best practice codes it follows for fundraising and dealing with emergencies.
A spokesman for NCVO said the audit was a rough snapshot of the issues, but agreed with the issues the report raises.
"We agree, as our executive pay inquiry recommended, that putting information in the back of an annual report doesn’t do enough to show transparency," he said.
"Key information and explanation should be easy to find online. We know a lot of charities are thinking about how they can up their game in this area, including meeting the recommendations of our executive pay inquiry, and we expect to see continuing progress."
