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Ethics and Sponsorship - Implementation

5. Implementation and practical issues

5.1 Introduction

If an ethical sponsorship policy is to exclude support from certain industries or business sectors, how is it to decide which should be in and which should be out?

Most charities look to exclude partnerships with companies whose activities:

  • conflict with the mission statement
  • could harm the charity - directly or indirectly
  • might damage the public's perception of a charity

For a more detailed discussion, the Institute of Fundraising has a 'Code of Fundraising Practice' which specifically relates to Charities Working with Business. This is freely downloadable and contains a very useful Risk Assessment section at page 18.

Whatever basic principles you choose, there are still a range of potential grey areas for any charity, and exploring the two inter-linked subjects of stakeholder surveying and company research can shed some light on the subject.

Sometimes it is difficult to know what things might be controversial or risky without some overview of the sort of PR problems that companies face. One solution may be to look through lists of the criteria that research organisations commonly track for their clients. Here at the Ethical Consumer Research Association we have 15 main 'categories' grouped into four main groups:

Environment (Environmental Reporting, Pollution, Nuclear Power, Other Environmental Issues)

People (Oppressive Regimes, Workers' Rights, Irresponsible Marketing, Armaments)

Animals (Animal Testing, Factory Farming, Other Animal Rights)

Extras (Political Activity, Boycott Call, Genetic Engineering, Alerts)

Each category itself has a number of other subcategories which are explained in more detail on our Corporate Critic website.

5.2 Stakeholder Surveys

The best way to find out where the boundaries of appropriate fundraising should lie is to ask the organisation's 'stakeholders'. For most charities key stakeholders would be staff, beneficiaries, and supporters. The Charity Commission in its document, CC59 - Reporting the Activities and Achievements of Charities in Trustees' Annual Reports, lists charity stakeholders as: users including beneficiaries, donors and funders, volunteers, staff at all levels in the charity, interest groups, the public, central, regional and local government (as a funder or as a policy maker), partners or suppliers, the media. (12)

A stakeholder survey could be:

  • making a few phone calls to key players in a smaller charity and making a written record of the responses, or
  • sending a detailed questionnaire to 5,000 randomly selected supporters in a larger charity, or
  • anything in between.

Stakeholder surveys can also bring additional benefits to an organisation. They can help build a stronger relationship with stakeholder groups by giving them a sense of ownership or involvement. They can also (if the results are right) bring legitimacy to bolder policies which may be opposed elsewhere in the organisation. The Co-operative Bank, in the development of its own ethical policies, commonly mails questionnaires to around one million people.

5.3 Company Research

Once a list of problem industries or sectors has been drawn up, the next stage is to identify a consistent method to discover whether a potential partner is appropriate.

The Institute of Fundraising's 'Code of Fundraising Practice' for Charities Working with Business contains a section on research at page 16. Among its fourteen points are questions about:

  • whether the company is part of a larger group?
  • what are its motives for giving?
  • whether it is financially sound?

It also suggests that the company itself might "exercise due diligence on behalf of the charity and be responsible for all of the costs". Given that companies are not always as critical of themselves as the civil society around them may be, this looks a slightly risky position on the surface.

Some charities, with limited resources, carry out this research themselves. Corporate Watch's has an excellent DIY Guide - How to research Companies and contains a number of links to further research sites.

Others may seek to use more commercial external information providers to help them in this process. Ethical Consumer's magazine and Corporate Critic database are commonly used tools and have a range of prices, starting from just £25.

The charity commission states that "Current Charity Commission guidance, including CC20 and Fund-raising through partnerships with companies, recommends that charities develop an internal policy to cover research, planning and strategy processes which includes establishing flexible written criteria for assessing the suitability of a proposed commercial partnership."

Some charities specifically refer to external sources as part of this external policy. Oxfam apparently uses ethical consumer materials as part of its due diligence process (14) and Mental Health Media states on its website that it assess "potential corporate sponsors and funders using the Corporate Critic Database. This offers us an independent and objective assessment of any potential funder or sponsor before a decision is made. In particular, it helps to identify companies which breach the criteria below..."