How charity leaders can drive trust

Trust for charities is a vital currency, helping them to build confidence with their supporters and communities, inviting more people to invest in their cause and fund essential services for those who need them.  

But what, exactly, drives that trust? The Charity Commission’s research revealed a number of factors behind the charity sector’s high levels of trust, many of which related to its leadership and transparency. More than half of respondents said being able to see how much money the charity has raised and how it has been spent was very important to drive trust, while 44% said the same about having clear leadership and knowledge of who was making decisions.  

Charities are held to higher standards of operation than other organisations. While this can (and should) result in greater trust between a charity and its audiences, it can also pose greater potential for reputational damage, greater financial loss, and disruption or even cancellation of critical services.  

Mitigating these risks starts at the top. “Good governance is essential for charities to succeed in promoting their mission and making the world a better place”, advises a new whitepaper from board portal software providers Convene, noting that the “public has become more direct in their expectations which demands more responsive nonprofit leadership”.  

The whitepaper, Improving Governance and Transparency: The Role of Board Portals in Nonprofit Organisations, reveals the unique governance challenges that charities are facing, from security concerns to operational risks. The whitepaper also shares tips to help charities protect against these risks with better governance and transparency protocols, assisted by software and other digital tools.  

Below, we explore some of the key governance challenges faced by the charity sector and Convene’s tips for overcoming them. 

DOWNLOAD THE WHITEPAPER 

The top governance challenges faced by charities 

Security 

Cyber security and compliance are essential considerations for charities, as both ethical and legal obligations. Charities, and their leaders, must ensure that the data of their donors and beneficiaries is protected, and that the charity has employed all the cyber security measures it can to keep it safe from cyber criminals.  

Charity leaders can directly influence how cyber security is prioritised throughout the organisation. A 2021 report from Charity Digital and Avast found that a quarter (24%) of organisations which had experienced a positive change in attitude or behaviour towards cyber security had done so because of greater awareness from their leadership.  

Cyber security awareness extends to all the software and hardware that charities are using, including board portals. Charities must be confident that the tools they are using will keep their data secure when processing it, so knowing what questions to ask at the procurement stage and what security protocols to look out for are vital.  

It is also important to think about how the tools will be used and who by to keep them secure. While board portals, for example, reduce the risk of data leaks by storing confidential files on a secure platform, they also enable charities to control who has access to what information, also limiting the potential access points for cyber criminals. 

“With tools like granular access controls, user profiles can be created to maintain a clear record of everyone who accesses the data,” explains Convene. “Administrators can then easily view and manage permissions and user licences. This helps to improve internal governance in the long run.” 

Transparency 

Transparency is important to charity audiences. It allows them to hold charities accountable and to see for themselves the impact that charities are driving for their cause. Donors, for example, see their donation as an investment – they are more loyal to causes than charities themselves and want to know that their donation is being used responsibly to help those in need. 

Transparency requires clear reporting and communication. Annual impact reports are important to demonstrate progress and to communicate the future direction of a charity alongside the actions already taken. These are important to all charity stakeholders and a key part of good governance to ensure that charity leaders are making informed decisions that benefit their mission. 

“Executives must deliver regular reports about how the charities are doing,” explains Convene. “Since public welfare is the ultimate goal of many nonprofits, overseeing programs is as critical as watching the finances. Nonprofits can sometimes become so focused on raising funding and project execution that they neglect post-project processes such as evaluations, documentation, and reporting.” 

Measuring progress is essential, but so too is presenting it. Charity trustees come from a variety of backgrounds with a wealth of different experience. Some may be more familiar with financial data than others, while digital-focused trustees are more understand of advancements in technology. Trustees need to be able to share their expertise and collaborate in order to shape the future of the charity effectively. 

With board portal software, charities can easily summarise meeting notes and present information clearly, even when attending meetings remotely. Presenters can control attendees’ screens to ensure everyone is on the same page and highlight the most salient information, improving the clarity of meetings and, as a result, the decision-making too.  

Resilience planning 

“Mitigating risks is one proactive task that all board members should be actively engaged with,” Convene asserts. Yet a 2023 report revealed that startlingly few charities have disaster recovery plan in place should issues arise.  

While charity leaders are responsible for managing risk, the fact is that issues often still arise. Charities may employ all the requisite cyber security protocols, for example, but cyber criminals change tactics, security updates may be missed, or malicious links clicked accidentally. Managing risk is not only about prevention, but also the response to these challenges when they arise.  

“Charities need to be thinking in both the short and long-term,” explains Convene. “Building resilience and ensuring that charities can maintain their impact long-term is important to consider. A part of good governance is making sure that it can continue, that these issues are fixed and not simply placated for the short-term, that there is long-term success.” 

Board portals make it easier for charity leaders to work together, to discuss these risks openly, and develop (and alter as needed) a clear plan should they occur. Audit trails and document libraries providing a centralised, accessible place to store these plans makes it easier for all involved to keep track of actions and ensure quick, effective decision-making, even in a crisis.  

To find out more about the risks charity leaders face in 2024, and how software can support them, download Convene’s whitepaper below.