I recently read a short article by Adam Rothwell of Intelligent Giving in the UK. He argues that UK charities are not very transparent. I am not sure that the situation is any different here in Canada.
In an article entitled ‘Charities aren’t very transparent - and that means they miss out’, Adam Rothwell, a director of Intelligent Giving wrote in the Third Sector Online (July 14, 2009) about the importance of transparency for charities.
According to Wikipedia the word transparency “implies openness, communication, and accountability. It is a metaphorical extension of the meaning a “transparent” object is one that can be seen through. Transparent procedures include open meetings, financial disclosure statements, the freedom of information legislation, budgetary review, audits, etc.”
“... being a truly open organisation involves more than simply responding to journalists’ phone calls. It means making a conscious decision to take donors’ and supporters’ concerns seriously. It means making information public by default, rather than assuming that it should be locked away. And it means - for some charities - making a fundamental cultural shift.”
He notes that based on a review of 500 UK charities annual reports “...only one-third of these leading charities admitted to encountering any operational problems in their latest financial year. This statistic ought to worry everyone with an interest in promoting good practice in the sector. Every organisation, no matter their size, will encounter setbacks at least once in a year. So the two-thirds of charities that failed to make any mention of this were, in my view, either deliberately whitewashing their achievements or it simply did not occur to them to tell the whole truth of their activities.”
He argues that by charities not being straight with its supporters they are missing out - the charity is not learning from its mistakes and not giving stakeholders a chance to influence the organization and suggest ways to improve.
You can read the article at: http://www.thirdsector.co.uk/Opinion/Article/919630/Charities-arent-transparent—-means-miss-out/
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Mark Blumberg is a partner at the law firm of Blumberg Segal LLP in Toronto and works almost exclusively in the areas of non-profit and charity law.