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The Ethical Charity?

Updated: Aug 19, 2019

You’ve probably noticed a steady increase in stories about the ethics and values lurking behind various glitzy corporate marketing campaigns. Programmes like Stacey Dooley filming effluent from a jeans factory gushing into a Vietnamese river mean that society is gradually taking notice of the impact of corporations on their workforce, the communities in which they trade and planet earth.

It’s true that it can be easy to be cynical about companies that flaunt their CSR credentials – just this week the CEO of Unilever has warned against “woke-washing”, telling companies that they need to actually walk the walk on ethics, but why is it that so many charities act as though good work serving their beneficiaries somehow excuses them from wider ethical considerations?

Recently I’ve discovered the B Corp movement of over 2,800 companies, which operates a rigorous kite-marking regime evaluating the behaviour, structure and governance, of organisations that wish to be accredited as existing to both generate profits and deliver the common good. I’m sure it has imperfections, but the existence of B Corps reflects the belief that values and behaviours are increasingly important to customers deciding where to spend their money. In fact, Waitrose has introduced an on-line B Corp aisle to help ethically-motivated shoppers.

It’s interesting that there seems to be no such equivalent for charities. There is the Fundraising Regulator and many charities promote Fairtrade goods or are registered with the Living Wage Foundation, but none of these provide any holistic comfort to people wanting to know whether the charities that they support are as ethical as may be imagined.

If corporations believe that consumers care about these things, then surely charities must accept that the same people are potential donors, volunteers and staff and will apply the same standards to them.

The concept of the Triple Bottom Line (TBL) brings together measures relating to performance in economic/financial, social and environmental categories. It was used as the foundation for the Global Reporting Initiative (GRI), which although intended for the corporate world could easily be applied to the Third Sector:

Stewardship of resources is vital, but shouldn’t we think a bit deeper than the purchase price? We know the problems of companies avoiding taxation on their UK activities, so why are charities so resigned to using Amazon and Google? The challenges of delivering services with excellent value for money are numerous, but the yelps of complaint from some charities when the national minimum wage increases seems perverse given the requirement to deliver public benefit. Those bulk-purchased bright tee-shirts are great for fundraising, but under what sort of conditions can they be produced and shipped to the UK for under £2?

The whole sector is under the spotlight regarding issues of diversity, both amongst workforces and trustee boards and many will be glad to have fallen below the threshold on gender pay reporting.

Environmental sustainability is where there are often crossovers between the three strands of the TBL, particularly in terms of purchasing decisions. How do we weigh the trade-offs between in policies on the use of public transport v cars, or town centre offices versus out-of-town. Many assume that there is a cost premium to green energy, but this is increasingly not the case.

The size and impact of the charity sector is arguably one of the UK’s biggest success stories, but its relative wealth and professionalism can lead to a sense of inertia and complacency. Shifting attitudes to ethics and the way in which charities deliver their public benefit need not only to be acknowledged but embraced if we are to retain the trust and respect that are necessary in order for all of that great work to continue and flourish.



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