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Adam Rothwell — Fri, 11 Jan 2008 17:16:11 +0000

About us: the details

WE WANT TO HELP charities become more effective. Yet we can’t do this alone. Instead, we want to encourage everyone to think more critically about the causes and charities they support. If we collectively took a more discerning view of where our charitable gifts went, effective charities would benefit. There would also be a big incentive for ineffective charities to reform.

Transparency lets donors make these informed decisions, and that’s why we promote it. Our charity profiles are ranked by transparency, and our headline performance indicator – the ‘Quality of Reporting’ score – is a measure of transparency too.

So by encouraging charities to be more transparent, we hope we’re going to help them become more effective too.

> Meet the team
> Our plans for the future

Transparency and how we calculate it (the basics)

We believe that the voluntary sector would benefit if donations went to the charities that deserved them most. At the moment, this doesn’t always happen. We want to change that.

In the ideal marketplace, efficient charities would thrive and inefficient ones would reform. Yet there is not enough information in the ‘charity marketplace’ for donors to choose the best charity to support. Often the only information available about charities is the information they provide themselves - and this can mean that the power of marketing budgets and slick presentation often overwhelms rational choice when donors make decisions.

Markets cannot function properly unless people making decisions about where to put their money have enough information. We see our role as stimulating the flow of information in the charity market. By persuading charities to become transparent, and by rewarding those which are already transparent, we encourage them to put more information into the public domain, which lets donors make better-informed decisions.

We also think transparency is a positive end in itself. By flagging transparent charities, we let donors decide easily which organizations respect them enough to provide them with the information they need to make informed decisions.

The criteria we use to generate our Quality of Reporting scores are applied to the one document which all charities must produce by law: the annual report (incorporating accounts). A handful of criteria also address the web site and Annual Review, if it exists.

The criteria are informed to varying extents by the following:

The Charity Commission's "Hallmarks of an Effective Charity"
The Charity Commission's Accounting and Reporting by Charities: Statement of Recommended Practice (Revised 2005) (a.k.a. SORP 2005)
The Charity Commission's “Transparency and Accountability” - Regulatory Study 8
The question, “Does this charity appear to prioritise its beneficiaries?”
The question, “Does this charity give me enough information that I can compare it easily with another charity?”
Data that we can judge within a maximum of three hours per charity

> More about how we calculate transparency

We have discussed them face-to-face with a wide range of voluntary sector workers and commentators (resulting in interesting debates).

We also invited the sector to comment upon the criteria in an online questionnaire which was featured in Third Sector magazine in March 2006. Over 200 people from across the sector responded. The overall response was very positive and gave us a lot to think about. Our final of criteria set is a subset of this set.

> Our plans for the future

Intelligent Giving - Details - Comments

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About us: the details

Transparency and how we calculate it (the basics)