As we mentioned in a previous post, ethical manufacturing is a core focus for today’s charities, and for good reason. Trust in charities is, unfortunately, at an all-time low; less than half of the people in the UK believe them to be trustworthy. One way to rebuild this trust is via transparency around your fundraising practices. As a charity, it’s crucial to know how, where and by whom your merchandise is made to prevent human rights violations in the process of promoting your cause.
In the new year, resolve to examine your own merchandise supply chain to ensure that your products are made in an ethical manner that promotes safe working conditions and liveable wages. While there’s a lot that goes into understanding ethical manufacturing, we offer you three simple ways you can start down this path, today.
1. Ensure your factories are socially audited.
Often, the word “audit” conjures up images of an unwelcome financial investigation into your organisation. But there’s another type of audit that you may actually want to consider in the new year. A “social audit” is a formal assessment of a company’s social responsibility, and how well it is, or is not, meeting benchmarks for health and safety, working conditions, environmental impact and other standards. Salesforce, for example, has a goal to use 100 percent renewable energy in its global data center operations. Through social audits, the company gains insights into how these centers are powered for a Stakeholder Impact Report that shows the company’s progress toward its goal.
For your charity, your goal might be more closely related to ethical manufacturing for fair working conditions. A recent report found that more than 75 percent of the top retailers in the UK believed that modern slavery was happening at some stage in the supply chain, and many charities use the same manufacturers as the private sector.
Conducting your own social audit of a supplier or factory requires significant time and resources and remains a challenge for many charities. Instead, this year, look for evidence. Often, social audits are performed by independent actors who follow a set of international standards. One of the best ways to ensure ethical manufacturing is to work with suppliers and factories that have passed a strict social accountability audit, such as a Sedex Members Ethical Trading Audit (SMETA) or a Business Social Compliance Initiative (BSCI) audit. SMETA and BSCI set the gold standard regarding ethical and responsible business practices.
So, in 2020, as you decide who will manufacture your charitable merchandise, ask for proof of these standards. Then, take a note from Salesforce and share this with your key stakeholders. It helps hold manufacturers accountable and it reflects positively on your charity’s code of conduct and impact on society. After all, who and how you choose to manufacture your charitable products is a key part of your reputation.
2. Conduct independent audits.
Bottom line, factories are driven by profitability. Even those that pass initial ethical standards often fail to uphold them for any period of time. Your charity might decide to partner with a SMETA manufacturer only to learn that the factory cut corners halfway through the production of your particular merchandise. So, in 2020, our advice is to be skeptical. Don’t assume that ethical standards will be upheld throughout the duration of your relationship with a manufacturer.
So, what can your charity do to prevent this? The answer is an independent production inspection – often referred to as “During Production Inspections”, or DUPROs. While social audits will help you select an ethical supplier, a DUPRO gives you greater visibility throughout the entire production process. The goal of a DUPRO inspection is to spot any ethical or quality-related issues early in the manufacturing process. In this way, your charity can more quickly address and resolve any issues that arise – before they become a larger problem.
A key thing to look for with an independent audit is that production is being carried out on the same premises. If the address doesn’t match the one provided on the original social audit, chances are your supplier has changed manufacturer without your knowledge. Or are you planning to place big merchandise orders this year? A DUPRO is especially important if you have an exceptionally large or complex order.
This year, resolve to talk with your charity board, leadership and stakeholders about how to conduct your own DUPRO.
3. Don’t fall for cheaper-is-better pricing schemes.
Our last suggestion to make your fundraising more ethical in 2020 is to raise a red flag on too-good-to-be-true prices. If a supplier or manufacturer offers you a price that is significantly lower than other estimates, chances are it really is too good to be true. As with all businesses, factories need to invest significant funds to provide safe working conditions, livable wages and quality products – drastically lower prices may indicate the company is cutting corners on these measures. And that is a price not worth paying. So, in 2020, as you research your supplier and factory, let prices give you pause and investigate those costs that strike you as too low.
We hope this post helps you make your fundraising more ethical in 2020. It’s a win-win for your charity, your reputation and the livelihood of workers around the world. While supply chains are opaque by design, there are steps you can take to protect against unethical practices. Another step is to download The Charity’s Guide to Ethical Sourcing. Then, please get in touch with us to discuss other strategies and best practices for ethical fundraising and manufacturing in the new year and every day.