how to complaints handling

Two recent Royal Commissions — one into institutional responses to child sexual abuse and the other into financial services misconduct — point to significant lapses in corporate governance, often because of a failure to address complaints.

In examining how institutions responded to complaints about child sexual abuse, charities were found seriously wanting as society’s expectations were frequently not met.

The financial services industry has also been put under a microscope and found to be grossly deficient. Establishing the Australian Financial Complaints Authority to deal with complaints was a good move.

In April 2018, 10 national peak charity bodies launched a policy to significantly improve how charities handle complaints and broadcast model documents on complaint handling through their databases. The model was a collaborative effort by the Australian Council for International Development (ACFID), Community Council for Australia, Fundraising Institute Australia (FIA), Governance Institute of Australia, Justice Connect, National Roundtable of Nonprofit Organisations, Our Community, Philanthropy Australia, the Public Fundraising Regulatory Authority (PFRA) and Volunteering Australia.

Five questions to consider

  1. Is it easy to make a complaint to your organisation?
  2. Is the information about who to contact easy to find?
  3. Do you have feedback or complaint forms in print and electronic formats?
  4. Is it possible to resolve a complaint informally by talking to the individual and providing an explanation or apology?
  5. Are there regular reviews of the issues raised by complaints to or about your organisation?

This work has been informed by a range of sources, including the NSW Ombudsman Complaint Handling Model Policy 2015 and Building Better Relationships Through Complaints by the Society for Consumer Affairs Professionals Australia. A website has been established and the model shared with approximately 81,500 charities and not-for-profits. Additionally, the Australian Charities and Not-for-profits Commission (ACNC) has distributed the link to the complaint handling policy and procedure, meaning 56,650 registered charities are also aware of the importance of complaint handling. ACNC Commissioner Dr Gary Johns has encouraged charities of all sizes to review their procedures and consider adopting these and similar tools to help them manage community expectations of their activities.

The issue of complaints handling is also referenced in the AICD’s revised Good Governance Principles and Guidance for Not-for-Profit Organisations in Principle 8, Stakeholder Engagement.

Building an effective system

An effective complaint handling system must be modelled on the principles of fairness, accessibility, responsiveness, efficiency and integration into organisational culture. Good complaint handling is characterised by the following principles: addressing the rights of those being served; focusing on their needs; being open and accountable; acting fairly, proportionately and confidentially; and correcting the problem. If organisations follow these principles, and learn from complaint data, they will find improvement in their services and even cost savings.

The charity sector is people-intensive, delivering social benefits to Australian society across education and health care, including disability services, social services and religious services; and internationally through emergency relief and development. This large public interface provides ample reason for taking complaint handling seriously.

Charities have a social licence to operate and support community wellbeing. In return for that licence and the associated tax benefits, they are required to maintain public trust and confidence in their work, ensuring no harm comes to the people and communities they assist — often people in vulnerable and fragile states. How an organisation does what it does is as important as what it does. This consumer-led expectation should have a solid response from charities, whose mission is focused on social purpose and service to society.

Benefits of handling complaints

  1. Good complaint handling can provide knowledge that can be used to:
  2. Improve products/services
  3. Build better relationships with your donors and those you serve
  4. Improve your bottom line
  5. Empower your staff to resolve issues fairly and efficiently

Bad complaint handling can cost your organisation:

  1. Donor/customer loyalty
  2. The lifetime value of a donor
  3. The public reputation of your organisation
  4. Direct financial expenses in relation to complaints

Yet very little is known about complaints to and about charities in Australia. No data is publicly available about complaints dealt with directly by charities and very little is available about complaints addressed through external dispute resolution schemes, such as the ACNC, whose reporting is restricted by legislation. While some charities have complaint handling systems — which in many cases are available on websites — others frequently have no information publicly available, or what little is available is obscurely located or impossible to find. Many other charities have a complaint system, but do not effectively apply it, while others have no process at all.

Some charities, especially smaller ones, will likely identify cost as a significant barrier to implementation of a complaint system. However, this self-regulatory initiative provides policy templates that boards can easily adopt or adapt, according to the charity’s size, character and program delivery, to manage risk and improve service delivery.

Effective complaint handling, which includes reporting and evaluation, can minimise risks and lost time resulting from dealing with complaints ineffectively — all issues that impact the bottom line. If organisations aren’t tracking complaints data, how do they change and reform harmful, costly or inappropriate practices?

Compliance monitoring

Unfortunately, there is little in the way of compliance monitoring by peak bodies. However, of the peak bodies engaged in this project, ACFID has a strong self-regulatory code, which broadly covers the operations of Australia’s humanitarian aid and development sector, where compliance is monitored by an independent Code Compliance Committee. The FIA and PFRA both have codes to cover charitable fundraising. The FIA has an independent Code Authority, which “mystery shops” to reveal good practice and exposes issues of risk or non-compliance.

This new resource is driving improvement in charity’s engagement with society, allowing the voices of complainants — whether donors, the public or the people charities serve, particularly those in vulnerable circumstances — to be heard and addressed, rather than silenced or ignored. If charities do not rise adequately to this issue, the question could be raised as to whether it is time to consider an ombudsman for the charity sector.

Dr Sue-Anne Wallace AM FAICD is an Adjunct Fellow, Sir Zelman Cowen Centre, Victoria University, deputy chair FIA Code Authority, vice-president Humanitarian Quality.

The ACNC has extended information reporting dates for charities with due dates between 31 December 2018 and 28 February 2019. Charities now have until 31 March 2019 to submit their 2018 Annual Information Statement.