Effective and transparent self regulation

June 2008

When Steven T. Miller, commissioner of the US Internal Revenue Service’s tax-exempt and government-entities division, said the agency would monitor the ‘efficiency and effectiveness’ of charities more aggressively, hackles rose.

One Non Profit Challenges blogger asks ‘Is this really what it’s going to take to get our industry to wake up and smell the sentiment of society, and within our own government? The last thing we should want is to have the government aggressively monitor a nonprofit's efficiency and effectiveness'.

Here in the UK, we have a less ‘in your face’ approach to regulation, but with the aggregate income of the top 3,000 charities growing from £28.5 bn to £33 bn in the last year, the public must trust charities to do what they say they are going to do. We need the soft touch approach, but we also need an effective regulator that has the teeth to keep out third sector equivalents of Enron and Maxwell.

Although measurement for measurement’s sake runs the risk of trivialising achievements (e.g. counting the trees planted rather than measuring their contribution towards a more sustainable environment - see Can everything that counts be counted), this cannot be an excuse for not finding meaningful ways to report on outcomes and impacts. The precise economic impact of, say, rehabilitating a stroke patient (who might otherwise need long- term care) could be measured through costing the savings to the public purse and charities should provide more of such measurement. It will not of, course, be the whole story, but there are many other tools for measuring other kinds of achievements, such as client self-perception of benefit and improvement in skills, increased educational achievement etc.

Phil Hope, OTS Minister, tells us ‘measuring what you do should be an integral part of your practice. How can you run an organisation without knowing what impact you are having?’(see First person, Phil Hope).

Far from being ‘aggressive’, the Charity Commission’ standards set out in CC60 - The Hallmarks of an Effective Charity are not legal requirements. But in a climate where homogenous information from grant seekers is expected, these standards are the criteria by which charities are scrutinised and measured. The development of online benchmarking, evaluation and monitoring tools responds to burgeoning information demand and reporting is becoming increasingly detailed. Four years on CC60 remains a highly practical tool for charities to ensure such services show them in the best possible light.

On another topic, I am delighted to report that we have received all sorts of feedback on Caritas which is helping me shape future content. So please keep it coming!

Author: Clarissa Dann

Clarissa Dann was the editor of Caritas as well as an HR and management online service,he People Bulletin until July 2011.

She is now the editor of the specialist trade finance magazine, Trade and Forfaiting Review which can be viewed at www.tfreview.com but does write on charity finance and investment from time to time.

Clarissa has a background in legal and professional publishing, as well as business journalism and holds an MBA from Cass Business School. She has been one of the judges for the non-profit category of the Chartered Institute of Marketing's Excellence in Marketing Awards for the second year running.

She has also acted as clerk to the trustees of a small almshouses charity and as a member nominated trustee to a pension scheme of a multinational publishing company.

Click here for other articles written by Clarissa Dann

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Editorial

Effective and transparent self regulation

Author: Clarissa Dann