New charity code aims to boost industry impact

Voluntary guidelines aim to steer nonprofits towards greater efficiency and better results for end users

A new code of practice has been launched to help nonprofits worldwide boost their efficiency and impact, and to encourage greater emphasis on the voice of beneficiaries.

Private Standard 48626, which spells out the word ‘human’ on a telephone keypad, is a voluntary set of guidelines for nonprofits of all sizes and in all locations, designed to improve the transparency and collective impact of the charitable sector. 

The code was initiated by Farahnaz Karim, CEO and founder of social enterprise Insaan Group, and Leonard Stall, editor-in-chief of Philanthropy Age magazine. 

It was drawn up following a sector-wide consultation, as well as with input from an expert steering group. The drafting was overseen by the British Standards Institute (BSI).

The main thrust of the code is to offer recommendations for the management of nonprofits. Its clauses cover financial reporting and transparency, impact measurement, governance and good practice, among other topics. There is also a focus on ensuring feedback from beneficiaries is listened to and acted upon, to better improve the services provided.  

“The code is ultimately a tool for higher nonprofit performance and for greater collective impact,” said Karim, whose organisation invests in social enterprises in the Indian Ocean region.  

The code is an addition to existing regulatory codes, she added, describing it as a first-of-its-kind attempt to “to link overall strategy to impact, and to introduce practical ways to measure impact on end-users.”

The code’s publication follows several high-profile scandals that have rocked trust between donors and nonprofits. Karim said she hoped the guidelines would help steer organisations, particularly in less regulated countries, and “nurture a sound philanthropic space”.

The next step will be to create software to turn the code’s principles into an actionable tool that will be called Philanthropic Performance Statement (PPS). This will be followed by certification by the ISO (International Organization for Standardization) as a full standard.

Financing for the initiative came from Switzerland's Human Dignity Foundation; Canada’s Polykar Industries Inc; and UAE-based Brian and Sami Wilkie of Gulf for Good.