Four warnings for charities from the Oxfam crisis

The recent leadership and communications crisis at Oxfam initially saw the charity accused of covering up sexual misconduct in its Haitian operations, complaints which expanded to take in other Oxfam bases and more aid organisations. Sexual harassment, bullying and exploiting women is not, it seems, the preserve of business leaders and film moguls.

Whether or not it was a deliberate cover-up, there has been much public and media dissatisfaction with Oxfam’s management and operational practices. The charity’s dilemma has its roots in a misguided view of reputation management priorities and a lack of transparency.

I believe there are four lessons other charities could learn from the debacle.

Don’t ever believe “It couldn’t happen to us.”

Issues you thought you had put to bed years ago can raise their heads at any time. The public mood has changed regarding historic errors. Former employees are more likely to come forward and are less worried about the fallout from gagging orders too if sufficient time has passed.

Once momentum builds with a story, it is easy for new organisations to find themselves under scrutiny. Just look at Save the Children which was soon dragged into the same spiral of shame following the Oxfam scandal. Now the charity’s employees are calling for the international chairman to resign.

Do you have skeletons in your closet? Dust them off and ensure you have nothing to hide. If you need to alter behaviour, say sorry, rectify a wrong, do so before someone digs the story up for you.

Short term pain can be long term gain

Oxfam’s initial response in 2010 was to keep lid on the story. While that’s a tempting strategy, that might not be right approach. Organisations which are honest and transparent may take an immediate hit to their reputation (and finances) but recover faster and better. Take a look at KFC, whose swift and decisive action on the chicken shortage, has been largely praised. Better take your medicine now rather than get embroiled in a much more damaging issue later.

Don’t neglect your own CSR

We don’t trust charities as much as we used to. The Edelman Trust Barometer 2018 (page 5) indicates that, globally, the general population’s trust in NGOs remains at 53%, just one point about trust in business, while among the ‘informed public’ trust levels for both forms of organisation are 64%.

The comparison is obvious. Charities are sometimes criticised for having the same fundamental weaknesses as large corporations – fat cat bosses, a disconnect between leaders and workers, unethical fundraising and marketing practices.

So, if people trust charities to roughly the same level as they trust businesses, charities need to adopt similar reputational communications approaches as those businesses. Charities used to think they were the answer to businesses’ CSR problems: “Support us and you’ll look good” they said. Now, with even smaller charities raising funds beyond the wildest imaginings of many of their donors, charities have a duty not simply to use those funds wisely, but to ensure they engage with corporate social responsibility initiatives of their own.

Report what you do and how you do it

One of the main demands of people donating to charity is that they want their money to be spent on good causes not administration. The ratio of operational to admin costs is a KPI for most charities, including Oxfam.

Yet, and this is a difficult but vital message to communicate, cutting admin to the bone is not necessarily the right thing.  Administration is not just marketing and fundraising: it is also accountability and research to show that the charity’s activities improve the lives of recipients. Not just that the charity’s solutions work, but that they work better than the alternatives. Without the right level of spend on scientific trials and analysis, charities cannot demonstrate their impact and know that they are not wasting their time and their donors’ money.

In his book Black Box Thinking, author Matthew Syed quotes the French economist Esther Duflo who is at the forefront of using control trials to make small improvements in international development. She says, “It is very easy to sit back and come up with grand theories about how to change the world… The only way to be sure is to go out and test your ideas and programmes, and to realise that often you will be wrong. But that is not a bad thing. It leads to progress.” (Syed M., Black Box Thinking, John Murray 2016, page 190)

As well as testing operational effectiveness, administration also involves getting expert advice – legal, financial, training, communications – at all times, not just when things go horribly wrong (which tends to when advice becomes the most expensive).

There is no such thing as a perfect charity, just like there’s no perfect business, government or family. Yet learning the lessons from the Oxfam PR disaster can provide a reputation-enhancing platform on which charities can build a better, more trusted future.

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