Charities, Ethics And Compliance

Over the past few decades, the charity sector has experienced a greater level of competitiveness, more funding and the opportunity to be more daring than ever before. Recent news relating to Oxfam and Save the Children has brought about an opportunity for charities to truly re-examine themselves and their approach to ethics. CEOs, General Counsel or other leaders are likely to be looking at the fallout from these industry events and wondering how to respond. Should they be acting as agents for change and if so, how?

The best place to start is by looking at a compliance programme. Is one in place and what is the added value in having one? The best way to answer this is to address the commons reasons why a charitable business might be lacking in one:

It's not a good use of donated funds

This is an understandable line of thinking, but it misunderstands the relationship between a donor and a charity. Those who give money to a charitable cause should perhaps be treated more like a company would treat its shareholders. You want them to have confidence that you are a well-run organisation, with clear standards that are expected of your people and your supply chain and that if someone breaches those standards, they will be brought to account and may be removed from the organisation. People understand that it takes time, money and organisation to run a charity. Provided that the costs of doing so are not excessive, they are unlikely to be put off giving to your charity for this reason alone. The best way to demonstrate good governance is through a properly structured and measurable compliance programme. It demonstrates that you operate transparently and that the rules are working in your charity, because you can produce reports and metrics at the touch of a button. These metrics give stakeholders confidence that things are being run ethically, properly and in line with the mission statement.

We are staffed by good people who wouldn't behave unethically or unlawfully

You may be entitled to assume that everyone in your charity is on board with your mission statement, be that finding a cure...