Faith, hope and charity

Evil larger charities are letting down their donors and volunteer fundraisers by investing their money to get the best possible return and declining to slag off potential sponsors in the media. That’s the hard-hitting message from Tuesday’s Panorama.

If the show is anything to go by then, in the eyes of documentary makers at the BBC at least, the ‘general public’ are capable of understanding the work of charities based on one of two mindsets: it’s a choice between credulous idealism and untrammelled cynicism.

Aside from the darkly entertaining but not especially though provoking revelation that Amnesty International is not very well run, Panorama’s reporters told us that:

(a) Save the Children had chosen not deliver strong criticism of one energy giant (British Gas) at a time when the company was providing them with sponsorship, and also chosen not criticise another energy giant, EDF, at a point when it was attempting secure sponsorship from them

(b) Comic Relief both invests some of the money it raises before spending it, invests some of that money in companies that do bad stuff and, horror of horrors, has a paid staff team.

Civil Society reports that many campaigners have since taken to Twitter to suggest that donors turn away from the evil big charities and, instead, give their cash to small local charities. For example, Lottie Cee who tweeted: “Seems the moral is to give to local charities where you can see your money is going. Not some pseudo-charity-corporation #panorama“.

Clearly giving to local charities, based on knowledge of and support for what they do is a very good thing but it’s not clear to me why it’s suddenly become a better option as a result of anything revealed in Tuesday’s show. Far from being a significant feat of investigative reporting, the programme amounted to little more than an entertaining televised assault on an unarmed platoon of straw men.

If you, as a member of ‘the general public’, were genuinely shocked by the revelations about the Save the Children, it seems likely that you’re starting point is the belief that charities either should or do operate in an entirely different economy to ‘people’. How many of us, if we had a job interview at a local branch of a major supermarket one Monday, would take part in a protest outside that supermarket on the Saturday before?

There is a moral choice to be made. If that supermarket is so evil that, as a person of good conscience, you couldn’t possibly be associated with them at all, then you wouldn’t apply for a job there. On the other hand, if you’d decided that this wasn’t the case and that you did want to work for them, would you really go out of your way to give them a reason to not to employ you? Really?

In the interests of transparency, readers should note – before reading the next section – that my organisation, Social Spider CIC, has been a recipient of funding from Comic Relief.

The situation with Comic Relief is a bit more complicated. There clearly is a significant ethical issue around how charities investment their money but Comic Relief is as much a victim of wider confusion as it is a prime culprit.

Where Comic Relief definitely is at fault is in its claim, made repeatedly during its fundraising broadcasts, that when people donate to its fund ‘every penny goes to beneficiaries’. In this blog for Third Sector, David Ainsworth is entirely right to describe that statement as ‘nonsensical’.

The actual situation appears to be that, based on the income they generate from other sources (investments, the government, corporate sponsorship and licensing agreements), the amount of money Comic Relief spends over each funding cycle is never less than they amount of money raised directly from the public.

This means that while the ‘every penny’ claim might be regarded as technically correct, it is also highly misleading. Comic Relief actually spends, as Ainsworth explains, around £17million per year on staff and, if they somehow managed to somehow distribute the £100million+ worth of donations raised on Red Nose Day 2013 without spending any money on staff then, over a two-year period, they’d have at least £34million more to give to beneficiaries.

So, Comic Relief are at least partially guilty of leading their donors and volunteer fundraisers down to the river of bullshit and waiting there for Panorama’s intrepid reporters to push them into it. It’s possible that, to some extent, the ‘every penny’ claim is an anachronism. The organisation was founded in 1985 and, since there, there been a significant decline in trust in/rise in cynicism towards public institutions.

But did most Comic Relief volunteer fundraisers and donors really believe that their money was allocated through some magical system that cost nothing at all? Or were they happy to go along with a half-truth that made everyone feel better about themselves?

David Ainsworth concludes his blog post with the bold suggestion that: “Like every other charity that tries to pretend it doesn’t spend any cash on administration, it’s about time Comic Relief ditched their nonsensical claim, and explained the truth.

He’s right but we as ‘the general public’ have an equal responsibility not to put to force charities in a position where there have to rely on these half-truths.

Another Twitter correspondent quoted by Civil Society, Sam White, writes: “#BBC #Panorama Donate to small #Charities with volunteers who work tirelessly for free, or make a homeless persons day, buy him lunch”

Ms White offers a pretty reasonable assessment of the choices on offer. You don’t have to pay for administration. You can donate your cash to small charity run entirely buy volunteers if you think they’re best placed to deliver the social change you want to see. Or you can cut out the middle people – paid or otherwise – entirely and give directly to a person you perceive to be in need. The lunch you buy may or may not make his or her day.

On the other hand, if you want to support forms of social change than can’t be delivered by entirely volunteer-run organisations or by giving directly to people in need, you will ultimately have to contribute towards the administration of organisations, either local, national or international, where skilled professionals work tirelessly for relatively low wages to deliver something that you want to happen.

Some of those organisations are better run and more effective than others. If you don’t think your donations are doing any good, you don’t have to keep donating. That’s real life and it’s real lives that charities and other social sector organisations do their best to improve. If Tuesday’s Panorama does encourage charities to be more honest about the fact they can’t do magic, we can do our bit by not expecting them to.

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7 Comments

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7 responses to “Faith, hope and charity

  1. As straight-talking as ever David, like it. Always bemused by the way that people (and many foundations actually) seem to think that charities should only spend their money on programs. How are the programs delivered? For the most part, staff I’m afraid. No doubt that some charities use ‘administration’ funds more efficiently and ethically than others (and ought to be evaluated on this basis), but fact is that large charities need to pay people to do the work.

  2. Jess Prendergrast

    Spot on

  3. I think I mentioned before here that the charity Lumos which JK Rowling set up, uses funds from her book ‘Beedle the Bard’ to cover operational costs such that all donations are applied to the social cause.

    In our original argument for a business model to displace charity we drew attention to the constraints on charity where business has greater freedoms.

    “In effect, the business would operate in much the same manner as a charitable, non-profit organization whose proceeds go to local, national, and international charities. Non-profits, however, are typically very restricted in the type of business they can conduct. In the United States, all non-profits must constantly pay heed that they are not violating those restrictions, lest they suffer the wrath of the Internal Revenue Service. For-profits, on the other hand, have a relatively free hand when it comes to doing business. The only restrictions are the normal terms and conditions of free-enterprise.”

    In fairly recent times the L3C model was conceived as a vehicle to unlock Program Related Investments

    http://www.forbes.com/sites/annefield/2012/05/04/irs-rules-could-help-the-fledgling-l3c/

  4. Fair enough. The general public does that the perception, rightly or wrongly, that charities are essentially self-serving institutions that first and foremost feather their own nest. I personally don’t see anything wrong with that as long as those institutions make that clear. Don’t forget that many people are broke or cleaned out by a system that is designed to extract money and resources from those that have it. More more more is the incessant squawk of the bird that needs feeding.
    Institutions are the perceived problem, not charity per se.

    • Beanbags admin

      Hi Mike,

      I think you’re definitely right about a decline in confidence in institutions. As I someone who had a starting point of broad scepticism towards large institutions in the public, private and voluntary sector, I get the impression that the views of the average ‘person in the street’ have lurched past mine in the 14 years I’ve been a local voluntary sector professional.

      I remember when, if I complained that a national charity was running a campaign that was well targeted in terms of generating income but less well targeted in terms of improving people’s lives, people couldn’t believe I could be so cynical. Now the default position is that large charities are ‘self-serving’ and I’m not clearly that the behaviour of charities has changed very much.

      Most charities are committed to continuing to exist and continuing to employ their staff teams while making a world a better place. There is a good argument that at least some charities – depending on what needs they meet – should be more focused on putting themselves out of business by solving the problems they exist to tackle but I don’t think charities are less likely to take that approach now than they have been at any other point in my working life.

      In the case of Comic Relief, discussed in the post, the approach they’ve taken to describing what happens to donations isn’t the one I’d have taken but it’s the same approach they’ve taken for nearly 30 years and I don’t see how it amounts to ‘feathering their own nest’.

      But you’re right that the perception has changed and that is a problem charities have to respond to.

  5. Hi David, and thanks for the kind words about my blog.

    First, I think you’re right that the public must stop having unrealistic expectations of how charities spend their money. Admin, fundraising and staff costs are all necessary to do the job.

    But I think the sector needs to help them out. I’ve said before that the public are smart enough to understand the truth, but I don’t think they’re suddenly going to realise on their own. The sector needs to explain it clearly, and trust that people will understand.

    On Save the Children, though, I think the situation’s pretty clear. They should speak out on behalf of their beneficiaries. If that costs them some money, they should take that on the chin.

    It’s perfectly possible to take that attitude. I see it in my sector every day. Advertisers constantly try to influence media organisations to provide positive coverage, and most magazines take a pretty zero tolerance approach to that kind of behaviour. Charities should do the same.

    On your comment that charity behaviour hasn’t changed, but attitudes have, I think there’s something interesting going on. Trust and confidence take a long time to build up and a long time to lose. People keep supporting a cause for a long time after they start to become disillusioned, and it takes them a long time to come back if things get better. So it’s quite hard to connect cause and effect.

    It may be that the charity sector has been using up the patience of its donors for a long time now, but it hasn’t necessarily shown up because there was such a lot of goodwill in the bank.

    (This is just a theory, mind you, and quite an airy one, at that. It may be that people are just as happy with charities as ever, and we, who spend too much time thinking about it, are overreacting completely.)

  6. An interesting post, and debate. I was quite surprised by the level of naivety that seemed to come across in some of what the Panorama programme was saying. Perhaps I’m too immersed in the sector to be representative, but as far as I can tell the “news” about charities needing to pay admin and to invest to safeguard funds for future use is nothing “new” at all and just seemed a way for Panorama to weigh in on the general charity bashing that seems to be taking place at the moment. (Where I stand on how much of this general negativity is justified as a form of healthy challenge is another point entirely).

    I am however, with David A on the point about Save the Children and the energy companies. Of course, I wouldn’t argue that it was sensible to go around looking to bad mouth potential sponsors but in this instance, there was such a clear clash between the policies of the energy companies and the charity’s mission, that I feel that they were close enough to the “evil supermarket” example (David F) that the moral choice would have been to speak out, even if to the detriment of the funding, or at least to explain the choice to continue the relationship…

    Once more, it all comes down to the issue of transparency. Charities need to continue to develop awareness of what are, or could become “hot potatoes” in terms of public interest in their activities and be sure that as far as possible they pre-empt criticism or misrepresentation by making sure that they communicate about these issues before being attacked and needing to take a defensive position. This level of heightened communication doesn’t usually come for free of course…!

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