Credibility starts with how a company is run
By definition, a charity has a social mission. But a social mission is no guarantee of socially responsible business practices. That distinction is becoming increasingly important and apparent.
Donors, grantmakers, and partners no longer evaluate charities solely on what they do, but also on how they do it. How is the board structured? How are reserves invested? What is the procurement policy? How is supply chain responsibility addressed? These questions are no longer limited to large publicly traded companies. They are increasingly being raised with fundraising organizations as well.
RJ 650: More Than Just Financial Transparency
Charities are generally not subject to European legislation such as the CSRD. Nevertheless, there are clear expectations within the sector regarding transparency and accountability. These expectations are enshrined in RJ 650, the Annual Reporting Guidelines for Fundraising Organizations.
RJ 650 goes beyond financial figures. The guideline explicitly states that the activities of fundraising organizations involve environmental, social, and economic aspects. In doing so, it directly addresses the themes we now classify under ESG: governance, integrity, supply chain responsibility, diversity, and sustainable business practices.
It is noteworthy that RJ 650 deliberately does not provide a fully prescriptive ESG framework. Organizations determine for themselves which social issues are relevant and how they will report on them. This provides flexibility, but also requires them to chart their own course. Those who fail to make choices will ultimately report nothing.
Investment Policy as a Reflection of the Mission
A concrete example where ESG and RJ 650 intersect is investment policy. When a charity invests reserves, bequests, or temporarily surplus funds, the guideline explicitly requires an explanation of the risk profile, portfolio composition, governance, and the sustainability criteria applied.
There’s a good reason for that. Organizations dedicated to climate, health, or human rights are increasingly being judged on how they manage their own assets. The gap between an organization’s mission and its investment portfolio is visible to stakeholders and has implications for the organization’s credibility.
ESG as a Matter of Trust
For charities, ESG is less about compliance and more about trust. Trust is the foundation of fundraising, social legitimacy, and long-term partnerships. Organizations that are transparent about their own choices, policy considerations, and impact set themselves apart—not only with donors, but also with banks, asset managers, and institutional partners, who are increasingly using ESG criteria in their decision-making.
Ultimately, this makes ESG a strategic issue for charities. It’s not a checklist, but a tool to demonstrate that the organization acts in line with the values it promotes.
How Cooperate Green Helps with This
Cooperate Green assists fundraising organizations in practically integrating ESG into their own operations and reporting. We do this through stakeholder analyses, materiality assessments, and linking social issues to the SDGs, so that the management report not only complies with RJ 650 but also provides genuine insight into what the organization does and how it does it.
Would you like to know how your organization can implement ESG in practice within the framework of RJ 650? Contact Cooperate Green for a no-obligation consultation.