Commerce, Ethics and Age UK

Ethics - sFollowing the press controversy on Age UK’s tie-up with utility providers, a recent report from the Charity Commission has asked questions about the ethics and appropriateness of charities entering into commercial deals with businesses. It’s an important question, and one that’s increasingly relevant and topical with the charities I advise.

Most reasonably well known organisations in the sector get approached all the time to endorse, co-brand or otherwise promote products and services to their communities and beneficiaries, and often we tie ourselves in knots in drawn-out, circular conversations trying to decide whether or not to say yes and take the commercial shilling.

In just the last few days, a number of of my clients have asked my opinion, and particularly asked what criteria they should use to make better, faster decisions in this space. So here are my three critical tests for endorsements:

  1. If there were no money on the table, would you wholeheartedly advise your communities or beneficiaries to take up the offer you’re being asked to promote, because a) it will improve their situation and b) it’s better than any of the alternatives you’ve looked at? If you can’t say yes to both, don’t do it.
  2. Can you articulate with clarity and integrity who, within your community, would specifically benefit from taking up the offer, and why? If not, get that absolutely straight before you sign up, and never agree to promote one option to all, if it’s not always right for all – make sure you’re in control of the message, and who will receive it.
  3. Can you review, reasonably regularly, whether it’s still the best option available for your community after you sign, and can you break off the deal or switch to someone else if it no longer is? If not, change the agreement to give you that ability, or walk away.

Only if an opportunity passes all three tests should you think about the financials. Never start from the position of covering your costs. New customers for ongoing services represent a huge “lifetime value” for your future partner, so make sure you understand that value and get an equitable share.

If that feels uncomfortable for any of your team, give them a bucket, ask them to fundraise the difference, put that cash into the bucket, then to give it to your potential partner instead of to your charity – hopefully that will sharpen the mind.

There’s a lot of pressure in the current climate to “diversify” into any potential income stream, whether that’s to increase support for the people we serve, or in some cases, just to survive. There’s also a big tendency in the sector to circle around any risky decisions for so long that we miss the boat. To cut through all that, you need simple criteria that you trust, and that can use immediately when an opportunity knocks on the door.

And yes, I’d recommend my three criteria to you, whether I was being paid to or not.

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