A lack of internal discipline can mean charities fall prey to their own ‘niceness’, says Sharon Martin.

Charities hold a very special place in the nation’s heart. They do good things, and people feel good when they support them. Compared to the private and public sectors, you might even go so far as to say the charity sector is warm and cuddly.

What I find interesting is how this perception can then permeate the organisational culture of a charity.

Is this a bad thing? Well, it can be damaging if charities allow themselves, in effect, to fall prey to their own ‘niceness’. This can manifest itself both internally and externally.

Lack of process compliance

Let’s consider the potential internal implications first, and start with compliance – or lack thereof.

I’m not talking about non-compliance with the law and regulatory requirements, although there are instances of this, but rather compliance with internal procedures and processes.

Examples include the completion of timesheets, raising orders on the purchasing system (before the invoice is received) or the prompt and correct recording of sickness absence, to name but a few. Generally, such tasks will involve a bit of form-filling but, properly designed, this should be ‘efficient bureaucracy’.

The data these processes generate, and the control they bring, are invaluable to inform and steer the organisation to achieve its charitable objectives. So why does getting staff to follow processes sometimes present such a challenge to charities?

When I first joined the sector, I was clearly informed that staff are not ‘told’ what to do, they are ‘asked’. While it is hard to ignore an instruction, a request provides the recipient with an element of choice and, sometimes, they choose not to comply. And when some staff are seen to ‘get away with it’ there is little incentive for others to follow the correct procedures.

Why might this be more of an issue in the charity sector?

Not holding staff to account

Well, enforcing compliance means holding staff to account, and that means there is a consequence for not following procedure.

It’s the consequence bit that I think charities can struggle with. It’s all terribly uncomfortable to have to confront someone, and it’s not viewed as very charitable to upset your staff.

But the ‘consequence’ doesn’t have to result in a punishment.

Often, demonstrating the value of the process, explaining how it contributes to the overall functioning of the organisation and providing support or training is all that is needed to engender a compliance culture.

Another internal impact of a weak organisational culture, which is not unique to the charity sector, is a failure to tackle poor performance. Again, it can be uncomfortable, and sometimes downright unpleasant, but the impact of not taking action can be even more serious.

Often the easy route, at least on the face of it, is taken and the ‘problem’ member of staff will It is damaging if our ‘warm and cuddly’ image permeates our organisational culture be passed around the charity – from team to team – until they find somewhere they eventually settle, hopefully without leaving a trail of broken work relationships en route. This does little to support the individual’s development and isn’t fair on anyone involved.

Too much democracy

Democratic decision-making sits comfortably with the charity ethos. While this certainly has its merits, it is not suited to all situations; there is a risk that, in a bid to please everyone, we end up pleasing no one.

An example is software development. I am sure many readers, like me, have witnessed projects – such as designing a new supporter database – where taking on board everyone’s wishes has led to the ‘bespoking’ of a standard product into a monolithic piece of software that is far removed from the original specification, and which can’t even run upgrades or ‘bug fixes’. The last thing it is used for is accessing supporter data.

A related internal risk is that, in being too charitable, we can fail to become a learning organisation. For instance, any major project is likely to be a complex and often expensive beast. What can be guaranteed – even in the most successful projects – is that something will have gone wrong somewhere along the line. That is a good result; occasionally, projects can go spectacularly wrong.

For a charity, funded by public money, this can be embarrassing. So rather than upsetting the project team or stakeholders by raking over past mistakes and opening old wounds, there can be a tendency to just brush the problem under the carpet.

The charity just moves on, because the less said, the better. Clearly, this just runs the risk of mistakes repeating themselves in the future.

Developing the right culture

I should emphasise that I am not advocating a change to a more aggressive, cut-throat style of management. That would not benefit anyone. However, what is needed is an open, transparent and accountable culture that is blame-free, where policies and processes are communicated clearly, as is the impact of non-compliance.

This must be followed through by managers ‘walking the talk’ and addressing issues as they arise; but in a fair way, applying the approach staff have previously been informed about. Then everyone knows where they stand: there is proper accountability, alongside which can sit more staff empowerment.

I mentioned earlier that the perception of what it means to be a charity can have implications externally. The most obvious examples of this are how we expect to be treated by the media and our contract partners.

Taking the media first, there has been a recent spate of what may be viewed as negative – or even damaging – reports about the sector in general, and about specific charities. The spectrum of reactions has been interesting to observe.

At one end of the spectrum – that I find a little self-defeating – is the defensive response (verging on shock) that someone has dared to question the actions of a charity. Having such a mindset is an unhealthy place to be. Just because we are a charity, do we not expect to be held to account?

Surely, if we believe in what we are doing, we should be ready to provide a calm, considered and rational response. Transparency is not something we should fear.

Charities should be held to account; we spend billions, including funds from the public purse. One of the interesting points in the recent BBC Panorama programme was the fact that the donors interviewed would still continue to support their chosen charity – and even seemed to increase their loyalty to the organisation – once it was more open and demonstrated it had responded to the questions raised.

Turning to contractual relationships, why should we expect favourable treatment just because we are a charity? In dealing with suppliers, for instance, I think it is perfectly reasonable to use our charity status to try to get the best.

There should be a consequence for staff who don’t follow procedures deal, but only after the supplier has been assessed at face value. Such deals will often be part of the quid-pro- quo: “Give us a discount and you can use our name in your promotional material”. This should be managed in an upfront way, and agreed at the outset.

What is less palatable is falling back on our charity status as a defence in supplier disputes. I have found myself in that situation, bemoaning a supplier who (rightly) issued a late-payment penalty: “Don’t they realise we are a charity” I moaned, indignantly, to a colleague.

However, should that really matter? Surely we should strive to treat our suppliers fairly; we should compete and engage on the basis of what we have to offer and not hide behind our charity status.

So, in summary, perhaps we could achieve a bigger charitable impact, more quickly, if there was better ‘rule-following’ in our charities and if we stopped using our charity registration number as a magic shield.

Sharon Martin has recently been appointed head of finance at Cats Protection.