Building Trust – The Critical Task

The growth rate of Australia’s Not for Profit sector is under challenge and those involved have a responsibility to not just trade on public trust and confidence, but to build it, writes Community Council for Australia CEO, David Crosbie.

Polling conducted by Essential Media shows that between March 2013 and July 2014 – the time in which Rudd deposed Gillard, the Abbott Government was elected and presented their first budget – public trust in the ABC, High Court, Reserve Bank, Federal Parliament and State Parliaments all dropped by over 20 per cent.

This is an alarming decline in general trust in our public institutions.  During this same period trust in charities dropped by over 10 per cent.

While there is some comfort in the finding that trust in charities declined less than in many other institutions, the reality is that trust is the most important commodity for the charities and Not for Profit sector.

We can never under-estimate the impact of public trust on the kind of Australia we live in. It’s at the heart of markets, consumer and business confidence.  It’s at the heart of collective action. Without public trust, our ability to work together to address shared issues is almost impossible. Tolerance is diminished.  Certainty is transient.

For charities, public trust underpins viability.  The willingness of people to get involved, to donate time and money, is grounded in public trust.  This is why strengthening public trust in the sector is the most important role of our regulator, the Australian Charities and Not-for-profit Commission.

There are indications in Australia that donations are harder to attract and volunteering has declined. These are major concerns for our sector.

Over the last 20 years, the charities and Not for Profit sector has been able to grow year on year largely through doing more of the same.  Growth in the sector over the last decade has been greater than seven per cent per annum – outstripping most industry groups.  This growth rate is now under challenge with stalling government revenues, greater competition for donations, sponsorships and corporate partnerships, and increased involvement of for profit organisations in areas previously dominated by charities.

If ever there was a time when charities needed to demonstrate and communicate the value they offer their community, to show how they achieve their purpose, it is now.

For Not for Profits, sustainability is becoming an increasing difficult challenge.  In these circumstances, there is always a temptation to put more and more effort into finding the money that will enable a business as usual approach, to compete harder, to seek short term solutions that may or may not enhance the core purpose and values of the organisation.

What is most encouraging for the sector is that many organisations are now looking beyond the quick fix, honestly and openly reviewing their current operations and their future directions, looking to more innovative ways of achieving their purpose and serving their communities.

The recent successful merger of Good Beginnings and Save the Children (highlighted by Pro Bono Australia News) is one example of two organisations going beyond a business as usual to deliver better outcomes to the communities they serve. These promising examples are growing across the sector.

The growing interest in addressing societal issues through drawing on new skills and sources of capital from the business sector is also encouraging.  This includes developing new income streams and investment options that do a great deal more than fund existing services.  Impact investing is slowly moving beyond the bespoke deal or straight replacement funding to becoming more about bigger picture solution based approaches that offer benefits to all involved.

These new approaches show the sector is focused on its purpose more than its bottom line, that it is committed to strengthening communities and demonstrating real value.

Perhaps the most important thing we can do in our sector is learn from these positive examples so we can adapt and adopt practices that will enhance the value we provide to our communities.

CCA believes our sector has a responsibility to not just trade on public trust and confidence, but to build it.  There is substantial know how in our sector about how to do this, we just need to apply it more widely.

If we are to create the kind of Australia we want to live in, charities will need to continue to step up to the task of building public trust and confidence by demonstrating the value of engagement and collective action.  Flourishing communities do not happen by accident.

CCA is conducting a national series of CEO and Board Leaders forums on collaboration and mergers in November as part of its commitment to sector leaders learning from each other to enhance their sustainability and effectiveness.

About the Author: David Crosbie is the Chief Executive Officer of the Community Council for Australia (CCA), and a member of the Advisory Board to the Australian Charities and Not-for-profits Commission (ACNC).