Communicating 'dual citizenship' - how do charities manage their reputation for 'good works' while undertaking commercial activities.

Abstract

Charities and not-for-profit organisations have traditionally eschewed commercial operations in favour of direct fund-raising from supporters. Building on Goodall’s (2000) exploration of sectoral values, it can be said that competitive pressures are driving charities to take on ‘dual citizenship’ through activity in both profit (commercial) and nonprofit (voluntary) sectors. In the United Kingdom, there are some 170,000 charitable organisations in England and Wales which generate £46 billion in annual revenue (UK Charity Commission 2008). There has, however, been little scholarly attention or professional focus on the impact that commercial trading by charities has on relations with key stakeholders, such as supporters, and upon the reputation of the community-focused organisations. This paper reports a case study of a UK charity and explores, using document analysis and phone interviews with supporter-stakeholders, their perceptions of the impact of commercial trading upon the organisation’s reputation as well as their relationship and level of engagement with the organisation. It found that donors are overwhelmingly in support of commercial activities, as long as these are aligned with the charity’s values. The study, however, also found that commercial activities should not deflect the charity from its perceived and announced mission. There were also lessons arising from the study on frequency and style of communication, and the relevance of models of communication, c.f. Grunig’s four descriptors, and measurements of relationships (Hon and Grunig 1999). The paper concludes with proposals for further research.