Charity Reputational Issues

• Published date: 16 June 2023
• Subject Matter: orporate/Commercial Law, Charities & Non-Profits
• Law Firm: Withers LLP
• Author: Ms Jo Sanders

In 2020 the Charity Commission said: 'Trustees are under a duty to take steps to protect the charity from undue risk of harm including its assets and people, but that does not equate to protecting its reputation from, and avoiding, adverse criticism at all costs.' This gives rise to a challenge for charities - how to safeguard legitimately the valuable asset of a charity's reputation whilst not giving the appearance of wishing to avoid any adverse criticism. This can be quite a conundrum; it is not always easy to recognise what is reasonable - even if robust - legitimate criticism, and to distinguish it from false or misleading claims or statements which are unwarranted and therefore should be challenged.

In a recent case, a charity wrote to a former volunteer with whom it had been in dispute. The individual had threatened to make claims to the media and the charity sent a warning via lawyers that he should not disclose confidential information or publish untrue claims (both of which seem reasonable requests as they are acts prohibited by law). However, the perception of a large charity using a law firm to correspond with an older individual volunteer resulted in national media coverage in the specific circumstances. In this case it was the warning itself that created headlines. There is a current interest in any legal cases on reputation with an apparent imbalance of power or giving a perception of heavy-handed conduct. That is not to say the conduct was in any way heavy-handed in this instance (we do not know the background), but it offered an easy David v Goliath narrative to the press.

However, charities should not consider themselves unable to act to protect reputation, and indeed, trustees are required to look after the charity's good name. The challenge is to devise strategies which are able to counteract unjustified damaging claims whilst avoiding pitfalls. For example, it is often inadvisable to take issue with individual social media posts unless what is being said is by someone who has great credibility, or where the allegation is so serious that it cannot be seen to go unchallenged. For the rest, it is usually best to leave well alone. However, it is a different question when it comes to an audience of significance to the charity, such as donors, volunteers or supporters. If there is a potential dispute or issue looming, then it is best to plan how to tell the charity's side of the story to those who need to hear it most. This might mean...