Charity reputational issues
15 June 2023 | Applicable law: England and Wales | 4 minute read
In 2020 the Charity Commission said: 'Trustees are under a duty to take steps to protect the charity from undue risk of harm including its assets and people, but that does not equate to protecting its reputation from, and avoiding, adverse criticism at all costs.' This gives rise to a challenge for charities – how to safeguard legitimately the valuable asset of a charity's reputation whilst not giving the appearance of wishing to avoid any adverse criticism. This can be quite a conundrum; it is not always easy to recognise what is reasonable - even if robust - legitimate criticism, and to distinguish it from false or misleading claims or statements which are unwarranted and therefore should be challenged.
In a recent case, a charity wrote to a former volunteer with whom it had been in dispute. The individual had threatened to make claims to the media and the charity sent a warning via lawyers that he should not disclose confidential information or publish untrue claims (both of which seem reasonable requests as they are acts prohibited by law). However, the perception of a large charity using a law firm to correspond with an older individual volunteer resulted in national media coverage in the specific circumstances. In this case it was the warning itself that created headlines. There is a current interest in any legal cases on reputation with an apparent imbalance of power or giving a perception of heavy-handed conduct. That is not to say the conduct was in any way heavy-handed in this instance (we do not know the background), but it offered an easy David v Goliath narrative to the press.
However, charities should not consider themselves unable to act to protect reputation, and indeed, trustees are required to look after the charity's good name. The challenge is to devise strategies which are able to counteract unjustified damaging claims whilst avoiding pitfalls. For example, it is often inadvisable to take issue with individual social media posts unless what is being said is by someone who has great credibility, or where the allegation is so serious that it cannot be seen to go unchallenged. For the rest, it is usually best to leave well alone. However, it is a different question when it comes to an audience of significance to the charity, such as donors, volunteers or supporters. If there is a potential dispute or issue looming, then it is best to plan how to tell the charity's side of the story to those who need to hear it most. This might mean proactively identifying possible future criticism so that it can be put into its proper context and presented accurately and in a more balanced way.
It also matters who the source of any false statements might be. Plainly, if it is a national newspaper or broadcaster with substantial resources and their own legal advisers, then a formal response is likely to be justifiable. Charities will usually be given an opportunity to respond to allegations prior to publication, certainly by reputable journalists, and taking advice and preparing these responses can be invaluable. Similarly, if the reputational threat emanates from a senior executive this is less likely to be perceived as oppressive.
It is obviously important to establish the true factual position as fully as possible to help evaluate where criticism is warranted or maybe so. This can be very difficult if it requires gathering information from employees or witnesses. Internally commissioned investigations play an increasing role to help charities fact-find, ideally before having to give any statements to affected parties or the wider public or media. This should be borne in mind in the context of any potentially serious allegations and ideally form part of whistle-blowing policies. Investigations that are commissioned by lawyers can sometimes benefit from the protection of legal privilege and this is worth assessing at the outset.
Key points to bear in mind:
- Any letter (or indeed internal communication) may be disclosed to the media or on social media, so letters should always reflect your charity's values and be drafted in suitable and appropriate terms. They should be in reasonable and appropriate terms while avoiding unduly aggressive and intimidating threats.
- Be mindful of perceived inequalities of power (particularly if dealing with unrepresented third parties) and take all steps to counter that.
- If it is necessary to warn of the possibility of taking any legal action, consider explaining within any letter itself why such action would be warranted, what the legal basis is and how it fits with your obligations as a charity (eg. is it to protect employees or to safeguard charitable assets including its reputation?). That way, if a letter is shared more widely it explains the rationale behind the charity's actions.
- Non-disclosure agreements must always include suitable exemptions for public interest disclosures.
- Libel, privacy/confidentiality, data protection and anti-harassment laws can all be valuable legal tools when used appropriately and with judgement and coupled with a communications strategy to explain why action is warranted.