ICTR Annual Conference 2014
EMBRACING THE NEW REALITIES FOR CHARITIES
Keynote address of Most Rev. Diarmuid Martin Archbishop of Dublin
The Ashling Hotel, Dublin, 6th November 2014
“The institution of the new Charities Regulatory Authority is an event of great importance for all of us and indeed has been very widely welcomed. I believe that this welcome by the charities sector signals a reaction not just of wanting to touch up the image of charities following recent negative criticisms and scandals. The welcome is not just a public relations gesture. I believe that the overwhelming body of charity organizations genuinely welcomes the emergence of a clear regulatory framework as an important instrument to foster transparency, to ensure public confidence and to foster best practice. The charities sector should not be stigmatised for the misdeeds of a few. When the image of the charities sector is undermined, society is weakened. Society needs the charities sector; it needs a strong civil society which represents what Pope John Paul called “the subjectivity of society”: responsible citizenship which plays an active and positive role in responding to human needs.
The very application of the norms of the regulator will be an important educational process. In the Catholic Church, for example, the norms set out by the National Board for the Safeguarding of Children served not just as a mechanism for monitoring and reviewing and where needed identifying non-compliance, but the very mechanisms of compliance had a vital didactic role.
It is important to note that charities are not entering this process under duress. For many years now we have seen the development of best practice and norms of governance and voluntary codes which have indicated a desire on the part of the sector to be, where possible, in a lead position regarding good internal governance and financial management. Having clear norms and common reporting standards which act as benchmarks will be of great help for the entire charity sector. The task is not just that of identifying those who are not complying, although this is of vital importance; the task is to lead the sector as a whole to best practice.
The regulator will above all set out and verify codes of practice regarding governance and financial management. But it is always vital to keep in mind the deeper picture. Better government and management are needed to ensure that the charities sector and civil society are facilitated to carry out their mission. We should remember the basic principle that rules are there to defend the more vulnerable and to restrain any tendency towards arrogance of these who are more powerful. And we must remember above all that while rules are necessary, they can remain a naked skeleton unless they are covered in the flesh and blood of solidarity.
The term charity is a particular significant one for me. Charity is an essential dimension of the Christian faith. Christianity is a religion which is called to witness to the love of God, caritas Dei, revealed in Jesus Christ.
Unfortunately, especially in the English language, the term charity has become somewhat devalued. How often do we hear it said that people need justice and not charity? Charity has been debased into an equivalent of hand-outs and do-goodism. For many, charity is linked to a do-goodism which looks after people’s short-term needs, without looking at the root causes of deprivation. It is looked on as someone else’s do-goodism rather than a response to the rights and interests of the recipient who should be in the driving seat. Charity, it is said, is not the answer to structural injustices which are at the roots of inequalities, deprivation and lack of opportunity in society.
As a religious leader I must obviously ask if this is a correct understanding of Christian charity. Without wanting to preach at you, allow me to reflect for a moment on the concept of Christian charity and ask in what way it might bring “added value” to social action in general. That might then help us answer more clearly questions about the specific characteristics of the charity sector and how can we best foster those specific characteristics.
The basic message of the Christian churches is, of course, about the love of God. Charity is not so much our activity, but a response to the God who loved us first. What are the characteristics of God’s love, as understood by the scriptures? There are two characteristics that I believe are particularly interesting in the modern world. One is gratuity. God loves people without any conditions. Take the story of the Prodigal Son, who comes back home to find that his father is there waiting for him with open arms. The son has his little negotiating speech ready, but he doesn’t have to use it. The son is just welcomed – that is gratuity. The other is super-abundance. The love of God surprises you – it is so generous that it turns you head over heels.
I choose these two values as examples because they do not easily match the thought patterns of a market-driven consumer society in which everything is precisely measured out. If the label says 16 oz, you won’t get an ounce more. If we truly lived in an environment like this, where you got only what you paid for and nothing beyond, none of us would be where we are today. We are all where we are today because someone loved us and someone gave us a break; someone put enough trust in us to give us a chance and perhaps even invested in us, just because they recognised us as who we were. The world needs the values that create generosity; that make you care about another person even if that person is weak; that motivate you to make an investment in people which are not linked to personal interest and gain. That is what is most basic in the charity sector and which must always be at the inspiration of our activities. Society needs the values that create generosity.
The work of charity is not just about the delivery of services. It is about enabling people to experience, or re-experience, the “richness of their humanity”.
Pope Francis is a master at the use of the symbolic gesture. For me, one of the most striking gestures of Pope Francis was an encounter with a young man whose face was completely covered in sores. The Pope did not do what most of us would probably have done: greeted kindly him from a safe distance or simply asked him – or perhaps asked his doctors – what disease he had and what the medical prognosis was. No, Pope Francis stopped and kissed the man. The basic ethic of all charitable institutions must be a basic ethic of humanity, which is the most challenging ethics of all and one in which all of us, me included, continuously fail. That fundamental ethics of humanity is however the one without which all our other ethical projects will fall flat.
What does this say to us who belong to such a varied contemporary charity sector? Is it realistic to think that can love be organised and become an ordered service to the community in our world today? Is love not at most a possible added-on element to the work and management of charitable organizations. Not all sectors of the charity sector would feel that they should be governed by such a radical ethics of disinterest.
In today’s society many charities are de facto non-profit businesses which deliver a social good. There is no doubt that market mechanism can be an effective means of delivering social benefit efficiently. But is that enough?
Many charitable bodies find being a not-for-profit limited company is the most appropriate legal framework within which to fulfil civil legal requirements. You know well that when it comes to looking for a new Director of a charity, the process of selection is very much the same process of open competition as for any job, looking at the business competence of the person, and not only at his or her religious motivation and personal commitment and idealism. Read the job offers in The Economist any week and you will see that the non-governmental sector offers some of the highest salaries. CEO’s and Directors of charities, however, carry huge responsibilities in the areas of financial management, human and employment relations commensurate with leaders in large businesses. Can charities become more like business and still maintain their identity? How do charities avoid cross-contamination?
At the same time, companies today engage with charitable and developmental organisations in a variety of positive ways. The concept of corporate social responsibility is an old one which has developed over the years. Most companies today consider it important to be considered good corporate citizens, not concerned with unqualified growth and maximum profit alone.
In some countries, such as the United States, the tax regime fosters large donations from the corporate sector to enhance projects of social responsibility. In Dublin the oldest public swimming pool and the oldest children’s crèche were both founded by the firm Arthur Guinness. Guinness also provided housing for its employees’ and still today invests in bright young employees who might not have had educational opportunity on their own. Business can make an immense contribution to social progress.
The challenge today is to translate that somewhat paternalistic sense of social responsibility into one adapted to the modern world. Corporate social responsibility is not just generosity; it can be very much a win-win situation for company and for society. Corporate social responsibility can be a form of sponsorship and advertising but it can also be something which brings justified gain for a business.
Indeed one could say that every business enterprise must assume some dimensions of a social enterprise. Where is the responsibility of entrepreneurship in this process? There is a very interesting reflection of Pope John Paul on the role of the entrepreneur in today’s world. He recognises the basic nature of the modern business enterprise and the centrality of profit to such enterprise. He notes that when a firm makes a profit, it means that productive factors have been properly employed. Inefficient use of resources is a form of moral irresponsibility. Inefficient use of public funds and resources is very often just another form of corruption. And as always the first victims of corruption are the poor.
In this complex and changed landscape, where do we find the specific characteristics of the charity sector fit in? Government, business and civil society each have their own place and today interact more and more. What do we mean by civil society and what is the special contribution of civil society and voluntarism, as opposed to business and government? The term NGO is one that I have never been totally happy about. It tends to place government as the prime mover in all social activity. Rather than foster a real concept of subsidiarity, the term NGO somehow implies a tendency to look on everyone else as totally subsidiary and even subservient to government itself. While NGO’s will see themselves as being a more efficient deliverer of social programmes, governments may look on them rather as a cheaper way to deliver government funded programmes. NGO’s can unwittingly become simply the privatised arm of government; with governments outsourcing certain services through them. This is not always without cost to the integrity of the specific vision and mandate of an NGO.
The distinctions can be even more blurred when for example NGO’s and charities draw most of their funding from government. Charities which are flavour of the month will most likely attract more money from the business sector than some which may really need funding. The perennially valid warning about no free lunches should keep charities attentive to safeguarding their real mission when interacting with business. When governments are the sole supporters of any charity, then governments will inevitably want to manage them and the real sense of civil society will be undermined. Civil society is not just an extension of government. It is another component of a participative society.
For me it is important that the charity sector should place itself not just as a better and more efficient vehicle for the delivery of public funding objectives, but rather as organizations or a family of organizations inspired by different – indeed a unique – vision of what is to be delivered and how.
We need a new ethics of civil society. Any system of norms must be based on a system of ethics. Today the questions “what is ethics” and “whose ethics” have become a little like Pilate’s question “what is truth”: a rhetorical question with a subjective answer. Ethics must have an independent foundation. Ethics is not ideology or just a pragmatic programme of ideas. Ethics is not about finding answers which help you to feel good.
The very nature of ethics is that personal responsibility must at its centre. We are responsible for the foreseeable consequences of our acts. Independent personal responsibility is always at the heart of ethical behaviour. Ethics is not an ideology which we trot out, or a handbook of does and don’ts that we turn to for ready answers. Ethics is always about the way we responsibly and authentically structure our own personal behaviour. It is about the responsible application of fundamental ethical principles to the decisions we make. In the long term a just society is attained not just by rules and norms, but by people who live justly and with integrity.
In corporate governance also the concept of personal responsibility is central. When things go wrong it can be very easy to say that I did not know and that the blame is with someone else or really with no one, just systems failure. When things go wrong and it comes to the crunch, resignations often take place at the lower levels. This is a problem also in the Church where the particular autonomous position say of a bishop leaves him as the sole legal representative for actions and where there is a tendency to think that therefore there is no corporate responsibility. I was stunned on the occasion of the scandals of child sexual abuse to encounter what I came to call the “baking the cake culture”. “I only put in the sugar” and “he only put in the flour”, but neither of us have any responsibility for the cake because were not there when it was put into the oven. We are all responsible for the foreseeable consequences for our actions and for our omissions. Real corporate responsibility can only be constructed on the foundation of an acute sense of personal responsibility. To paraphrase what I said earlier: rules and norms are necessary but they can remain a naked skeleton unless they are covered in the flesh and blood of personal integrity.
Personal responsibility involves looking into your own heart and conscience, but also looking at and not being afraid to look at and to see where things are not working well.
Ethics must be value generated, but the enforcement of ethical standards can often be attained not through preaching and moralising but by establishing a down to earth legal and governance framework which makes unethical behaviour less likely and less attractive. In the mid-nineties the World Bank wished to draw attention to the enormous social and economic cost of corruption in Latin American countries. The conventional wisdom of the time, however, was that international organisations had no right to intervene in the internal affairs of independent sovereign states. Noisy anti-corruption campaigns were never going to be tolerated. The World Bank approached the question proposing packages of technical reform of the tax systems. The existing systems were so complex and involved so many passages – and therefore many hands to be greased – that the simplification of the tax system made the system much more efficient and greatly reduced the possibility of corruption. Ethics do not always require preaching and moralising to be applied.
Just as those governments at that time felt that they were above external evaluation, the fact that charities and civil society or indeed religious bodies are separate from government, does not mean that they are exempt from control and reporting of their expenditure. This is the real progress that has come with the establishment of the charities regulator. Such regulation will naturally have to reflect the specific status of civil society organizations. The fact of any legitimate differentiation between the legal obligations of civil society and business does not mean that civil society organizations do not have legal obligations. They also have moral obligations which are just as binding as legal ones.
Ethics requires governance and regulation and enforcement because we live in a world of human beings and where corruption can always appear on the order of the day. It should also be noted, as I alluded to earlier, that one of the most common forms of corruption is inefficiency and sloppy management, which robs people, especially the poorest and the most vulnerable of the quality services which are their democratic due and for which they pay anyway.
Transparency involves allowing all stakeholders in society to know their rights and to be able to claim their rights and entitlements. A survey done at the turn of the century, again by the World Bank, called Voices of the Poor was the widest ever consultation of the poor and how they viewed their needs. Interestingly the poor identified as the single most significant factor that would help them rise from poverty “voice”. They found that often the very institutions which were institutionally constituted to defend their rights – police and local authorities and social services – were often the ones who deprived them of their rights and that they were left with no recourse.
Rather than enter into the technical challenges about accountability and setting benchmarks about the manner in which charities spend their money on such questions as administration, I have tried to look at the deeper sense of what the charity sector and civil society really mean.
The concept of voluntarism and gratuitousness are vital for any living society. They are not just abstract concepts. They represent the commitment and the generosity of so many individuals in our society who take up the responsibility of being concerned about the marginalised and those who would otherwise fall through the networks of care and solidarity. Society has an obligation to recognise the service of the men and women who take on responsibility for the public good, from those who voluntarily take on responsibility in boards of governance right down to the day to day hands-on work of caring. They play an irreplaceable role in making our society more human. They help us understand what being human means. ENDS