Trust and accountability in UK charities: Exploring the virtuous circle

Abstract

Public trust and confidence in charities is essential for the achievement of their missions. However, recent evidence suggests that trust in UK charities has been damaged, potentially affecting charities' and the charity sector's sustainability and effectiveness. This paper constructs accountability as an important means of developing, maintaining and restoring trust in charities. Through a series of interviews with charity managers, it investigates the public and private mechanisms used in discharging accountability to, and building trust with, charities' main stakeholder groups. The paper identifies the use of a wide range of mechanisms, often highly tailored to particular stakeholders' perceived information needs, which are seen as critical in this process. It is argued that the use and interplay of these can create a 'virtuous circle' of accountability and trust, where each reinforces the other. It is argued that where this is achieved, trust in individual charities, and the sector as a whole, can be enhanced.

How can the public trust charities? The role of performance accountability reporting

“…Given the centrality of public trust to charities’ operations and mission achievement, it is of concern to the sector that a recent study commissioned by the UK Charity Commission warns public trust in charities has diminished, with a perceived lack of accountability identified as a key reason (Populus, ). This finding is of interest to charities and accounting researchers alike, since it supports prior research that suggests charities owe a duty of accountability to the public (Morgan and Fletcher, ; Hyndman and McConville, ) and identifies appropriate accountability as a key determinant of public trust in charities (Furneaux and Wymer, ).…”

“…Charities rely on public trust to sustain their activities (Sargeant and Lee, ; Hyndman and McConville, ). Indeed, a charity's social licence to operate as a tax‐exempt ‘public benefit’ organisation (Morgan and Fletcher, , p. 805) is underpinned by public trust in its ability to fulfil its mission and produce outcomes that benefit both targeted beneficiaries and society more generally.…”

“…Although regulation of the charity sector serves some role in providing accountability to support public trust (Horizon Research, ; Populus, ; Cordery and Deguchi, ), it is thought that charities’ direct accountability to the public remains underdeveloped and they struggle to know how to achieve it (Hyndman and McConville, ). Also, while prior studies have examined accountability to some charity stakeholders – regulators and funders, and to a lesser extent, donors, volunteers and beneficiaries – charities’ accountability to the public remains under‐explored.…”

Accountability in Ontario's Health Care System: The Role of Governance and Information in Managing Stakeholder Demands

“…Trust is therefore built and maintained by demonstrating accountability (Dainelli et al, 2013;Fowler & Cordery, 2015;Hyndman & McConville, 2018;Jepson, 2005;O'Dwyer & Unerman, 2007Yang & Northcott, 2019). As a result, when trust is low or broken, organisations are forced to demonstrate greater accountability in order to rebuild its trust (Dainelli et al, 2013;Hyndman & McConville, 2018b;O'Dwyer & Unerman, 2007).…”

“…From the personal perspective, metrics are hard to understand and difficult to transmit and convey meaning persuasively. Storytelling 'pulls at the heart strings' of readers to encourage an emotional reaction and a connection to the organisation (Hyndman & McConville, 2018b). Therefore, for hospitals, LHINs and foundations, consistency and comparability of quantitative information communication with personallevel stakeholders were not deemed as important as was telling a compelling story.…”