The hierarchy of charities must be broken down if they are to learn from the London School of Economics' independent report into its donations from Gaddafi, says Adrian Beney.

Yesterday’s publication of the Woolf report on the Gaddafi Foundation gifts to the London School of Economics makes discomfiting reading for anyone who cares about private support for Higher Education. There is plenty of analysis of what the LSE should and should not have done in the report itself, so instead I want to look at the lessons which can be learned for any charity involved in major gift fundraising.

The Gaddafi Foundation gift to the LSE was born out of a relationship. As with any relationship between two or more human beings, there were both spoken and unspoken agendae in play. In this case it appears there was a great deal that was unsaid by Saif Gaddafi.

Our job as fundraisers is to leave as little as possible unsaid. And as far as we can we need to make sure that it is not only the fundraisers that enjoy this level of clarity, but the organisation itself. So how can this be achieved?

A clear procedure

The need for a clear procedure to be followed on the offer of, or in asking for, potentially controversial or difficult gifts is obvious, but it is very easy to be wise with hindsight. I have written “procedure” rather than “policy” because it is probably more sensible to decide how the organisation will behave and what it will do to reach a decision, rather than to try to predict what kinds of decision should be reached. This procedure should have two stages:

1. First it must be established whether the acceptance of a gift compromises the very raison d’être of the charity. This is not a public relations issue, it is an ethical one. If the matter is not clear-cut then it needs to be escalated up to the highest level of governance in the organisation.
2. If the gift passes the ethical test, then there may still be PR issues to deal with. What will stakeholders feel, will it put off other donors etc? Although there may need to be governance input, this PR test is much more operational than the ethical one.

So much for a procedure. It’s only any good if it’s implemented well, and here there are some broader but more subtle issues at play for those who fundraise, or who manage and have responsibility for the fundraising function.

Hearing all the voices

In the aviation industry there is an obsessive concern with analysing accidents so they can be avoided in the future. Analysis by NASA in the 1970s showed that hierarchy in the cockpit could be a problem. The crew (quite properly) respected the Captain, but his experience was regarded as authoritative and it was hard to question his decisions. Lives were being lost in emergencies as a result.

The response was the introduction of training in “crew resource management” (CRM). It aims to create a climate in which the wisdom of all those present in the cockpit can be heard. As Wikipedia has it “CRM aims to foster a climate or culture where the freedom respectfully to question authority is encouraged. …. It recognises that a discrepancy between what is happening and what should be happening is often the first indicator that an error is occurring. This is a delicate subject for many organizations, especially ones with traditional hierarchies.”

The survival of so many passengers on United Airlines Flight 232 which crashed in 1989 after losing all its control systems has since become a prime example of successful CRM.

Why is this relevant to the ethics of major gift fundraising and the Woolf Report? It’s relevant because in the LSE’s case the gift had been solicited by a senior academic, and the communication about it with the governing body was handled by this academic and the School’s two most senior executive officers. This is neither unusual nor improper. But it puts the fundraisers in the same position as the crew on an aeroplane. It seems that it was hard to make their voice heard and hard to question some information they had been given.

So it is important that fundraisers find more of a voice. Here are some thoughts on how that could be embedded in the way the organisation works.

• There is a need for co-operation and consultation between the entrepreneurial “do-ers” of the charity’s work, and the staff of fundraising offices. In large organisations like universities, there is sometimes a tension between the work the fundraisers are doing on the core objectives for the organisation and the entrepreneurial academic who wants to get on with an "ask" right away. The lesson here is that the academic (or other deliverer of the charity’s activities) and the fundraiser need to be talking at a much earlier stage in the process.

• It's very hard to "undo" a gift which has already been solicited, and in which the fundraising office had no earlier involvement. This is all the more so when the head of the institution and a sensitive and high-profile donor is involved. There should probably be a ceiling above which no ask should be made by anyone without clearing it with the development office. Back in 1990 I asked a Peg Duronio, an experienced fundraiser at the University of Pittsburgh and author on fundraising, how they dealt with fundraising by academics that was not cleared in this way. Her answer was shockingly blunt – they wouldn’t remain on the payroll very long if they kept on doing that.

• Senior Managers in the UK higher education generally have limited experience of fundraising. This is true for many arts organisations, and even for some major charities which rely on fundraising for a significant proportion of the income. Is it time for directors of development to be, de facto, members of senior management teams?

Adrian Beney is a director of More Partnerships and has been in fundraising for more than 25 years