Now let me say up front that I have nothing against charities or charitable giving. Like pretty much everyone else in our more than generous country I give to charities without a second thought. And then I had a second thought that maybe that’s part of the problem.
Of course we are in the middle of just about the heaviest period of charitable fund raising of the year. In October we had Sober October for the Macmillan Nurses, now we’re into Movember raising money for men’s health charities. Before that we were encouraged to tip buckets of ice water over our heads in the name of charity. Of course we mustn’t forget the annual poppy appeal and the annual celebrity fest Children In Need. Ahead of us we have December and Christmas when pretty much the world and his brother (or sister) will be out with their collecting tins.
It is noticeable that many of the performers on Children In Need, for example, just happen to be releasing new singles just in time for Christmas. Coincidence? I think not. This year we saw a re-formed S Club 7 and guess what, the following Monday they launched a nationwide reunion tour. How spooky is that? So while I watch these bands perform I am not under any misapprehension about how altruistic they are being. They are not supporting a worthwhile charity, they are supporting themselves.
Which takes me to Bandaid. Leaving aside that it’s totally the wrong song for the appeal they are making or that it’s as cheesy as gorgonzola, just why are multi-millionaires asking us to give our money? Which is easier: persuading one million of us to give £1 or one of them giving £1 million? “But they’re giving up their time for this.” I heard one idiot commentator saying on the radio, “and their time is worth money”. All those singers could have given, say, £100,000 each and not missed it (and reclaimed it against tax). So cut out the middle man. If time is so valuable just give the money! And I’m not impressed by people who move countries to avoid paying tax trying to tell me I have to spend more of my money to help others. Pay your taxes in the land of your birth, Bono!
(And while we’re on the subject why are all those sycophantic interviewers calling Bob Geldof “Sir Bob”? As an Irish citizen his knighthood is honorary. He’s not supposed to call himself Sir Bob. If a university awards you an honorary doctorate you don’t go around calling yourself Doctor!)
I have absolutely nothing against any of the charities mentioned above, or any other charity, it’s just that there are SO MANY of them. I reckon if I gave a pound to every charity that asked me for one then I would be in need of charitable support myself, which makes no sense at all.
I have a recurring nightmare. I’m in a town centre (probably Banbury but maybe somewhere else), walking along, minding my own business. Ahead of me I see two charity collectors armed with their collecting tins. One has a green tin and one has a yellow tin, so they aren’t both collecting for the same charity. They start to edge towards the centre of the footpath, clearly trying to intercept me. It’s not quite a race between them, but at the same time it’s quite clearly a race between them.
Now here’s the thing. My wallet is empty. In my pocket I have only a £1 coin. I was saving it to pay for the car park. I see the tins. I don’t know who is collecting for which charity, but I know I will have to give up my £1 to one of them. What do I do?
A. Do I stop where I am and make it a real race, giving the £1 to whichever of them gets to me first?
B. Do I wait till I’m closer, try to see what each of them is collecting for and then veer towards the one I favour most?
C. Do I stand between them and conduct an interview with each to try to find out which of their charities is more worthy?
D. Do I turn around and run away?
Fortunately I usually wake up before I have to answer the question and then I go to the Post office before I go to town so I can fill my pockets with pound coins.
But you see the dilemma. It’s not the pound; that is immaterial. It’s the fact that I’m going to have to say ‘no’ to one of them and that will make me feel bad (then I’ll have to go to the cashpoint so I can pay for the car park, but that’s another issue). Why should I feel bad because I’ve given money to charity? Giving to charity is supposed to make us feel good. That’s one of the reasons, according to psychologists, why we do it. It’s probably the major reason, by the way, not that we will ever admit it, even to ourselves.
I don’t know about you but I have some criteria I use to decide which charities that I will give to. The guiding principal for all of them is that (a) people will die and I can help prevent that and (b) even if they don’t die then my giving to the charity will help to prevent others dying in the future.
Top of my list are charities that I might need at some point in my life. I know that sounds mercenary, even shallow, but there’s no point in me giving to charities if I’m going to end up dying prematurely if that is avoidable. So the Air Ambulance, Royal National Institute for the Blind and hospices all get money from me and now that I’m getting older Age Concern are getting their fair share. Cancer Research charities are also high on this list, because if it hadn’t been for cancer research in years gone by I might be a widower now and that thought makes me shudder. This is a charity that still has a lot of work to do. Off that list are the Royal National Lifeboat Institute, because I found out they are a hugely rich charity that can’t actually spend all the money it gets.
Next in line are the Armed Forces charities. Of course I was in the RAF myself, my father was in the Army and so was my son. One of my sisters has a close friend whose son was severely injured in Afghanistan and who will live out his life in a wheelchair. We have another family friend who has sons still serving in the army and who may once again be placed in harm’s way. I know the risks that service life throws up and despite all we hear about the ‘Armed Forces Covenant’ I know we can’t trust politicians to do the right thing all the time and in all cases. The government (whatever shade of rosette they wear) will only ever do what it is forced to do by public opinion and that is a fragile thing.
Beyond that I feel that charitable giving is about helping those who are unable to help themselves, whether they are human or animal. I give to both types of charity. This is where the problem really lies. The advertising agencies that work for these charities have become adept at tugging on our heart strings. How can one differentiate between a child that has been orphaned by Typhoon Haiyan and a child dying from malnutrition in Sudan? You just can’t and the charities themselves know that.
Are all charities as good as each other? It’s well worth taking a look at their accounts. They are freely available on the Charity Commission website.
I’m in the middle of writing a book set against the backdrop of a charity telethon. Yes I know I’m also writing a Sci-Fi series, but I work on three or four books at a time, flitting between them as I get stuck or come up with a new idea. Anyway, as part of my research I took a look at the accounts of one of the existing charity telethons. *
What I found was interesting. One of the things that the charity says in all their appeals is that all the money that the public gives goes straight to the projects that the charity supports. OK, if that is the case, why do the accounts show £11.36 million for ‘generating voluntary income’, £100 thousand in ‘governance’ and £1.5 million in ‘trading to raise funds’. That last one is a really puzzling heading. What does it mean? I guess it means paying for the manufacture of the bric-a-brac that is sold to raise money but that is just a guess. ‘Generating voluntary income’ means the cost of actually putting on the telethon. And I thought it was put on for free!
I then noticed that the charity is holding £137 million in long term investments. But if all the money donated goes to helping good causes, how come there is any left over for investments?
I also noticed that the charity has 277 employees, so some of the money raised must be going to pay wages, which again goes against the statement that all the money raised ……etc. On the plus side the charity spent £113 million on supporting the causes it raises money for, which is 99% of its income for last year. This is actually excellent when measured against some other charities.
Intrigued, I looked at another well-known UK based charity, Oxfam. Its £290 million of charity spending was only 79% of its income and it spends over £68 million under the heading of ‘trading to raise funds’. By comparison, however, it only has £3 million in long term investments although it’s a much bigger charity.
I was a bit scathing about the RNLI earlier, so how do they fare? Out of £191 million of annual income they spent an appallingly low £118 million, or 61%, on their actual charitable operations: that’s operating and maintaining lifeboats, crew training and carrying out rescues. Their long term investments, however, are £278 million. If they cashed all that in they could operate for more than 18 months without having to raise a single penny!
I found it interesting that RNLI employed 1,670 people** compared to much lower numbers for other charities. Now I know that RNLI has to employ full time Cox’ns for the lifeboats, who also manage the lifeboat stations. They also have to employ full time mechanics to maintain the boats. After all you can’t call out the AA when your lifeboat refuses to start and while you’re getting a jump start from a passing leisure craft some poor beggar is drowning, so we can expect to see a certain number of people in full time employment. But 1,670?
So I took a closer look at their accounts. They have 187 people employed on ‘support and governance’; that’s admin to you and me. They have a further 212 people looking after ‘fundraising and legacies’ and 19 employed just on merchandising and other trading.
That’s over 400 people in non-lifesaving or safety/training roles. Here’s the real killer for me, 37 of those staff are paid in excess of £60,000 a year, of which 8 are paid over £90,000 a year. On their board they have not only a Chairman and a Vice Chairman, but also three Deputy Chairmen. Seems a little excessive, doesn’t it?
I’m sure that the people who drop their hard earned money into RNLI collecting tins didn’t expect it to end up invested in stocks and shares or paying high salaries. Those sums don’t include the value of the lifeboat stations, by the way. Those appear as ‘own use assets’ along with the lifeboats themselves, totalling £365 million.
I mentioned MacMillan Nurses above. How do they stack up? Well, they spend £121 million out of income of £189 million delivering their actual services. At 64% that’s marginally better than RNLI, but not great.
Does any of this matter? Surely the fact that the charities mentioned spend money on the services they provide is a good thing. Well, maybe but maybe not.
Look at it another way. If only 61% of all the tax revenue raised by government was spent on public services wouldn’t there be something of an outcry? We would expect the government to be far more efficient than that, wouldn’t we, especially as we have no choice about paying taxes (well, most of us don’t Bono).
Just how efficient is Britain? According to the IMD Yearbook for 2013 Britain was ranked 18th in the world in 2013 compared to 9th in 1997, with a government efficiency of over 79%. In other words 79% of the money government takes in tax is spent on public services. That’s not bad when compared to a lot of charities. I would like to ask why we slipped from 9th to 18th place but maybe that’s a question for another time.
On the other hand we GIVE to charities voluntarily and I think that we are entitled to expect that most of the money gets spent the way we think it’s going to be spent – on whatever cause they are supposed to be helping.
So why are some of these charities so inefficient? Do they really deserve our money if they are so inefficient in the way they use it?
Isn’t their inefficiency part of the reason why we are constantly having collecting tins rattled under our noses and why there are so many campaigns each year? I didn’t have ice water poured over me so that the money raised could be invested in ‘long term investments’ or salaries of over £100,000 a year. Actually I didn’t have ice water poured over me at all, but I did give up drinking alcohol in October, which was far worse.
With charities that deal with disaster relief it’s understandable that they hold money back. No one knows when a typhoon might strike or when a famine might develop. However, long term investments are what they mean. They can’t be liquidated in a hurry.
So I took a look at the figures for The Disasters Emergency Committee. This is the charity that appeals on behalf of a range of other charities in order to raise money to relieve a specific disaster. Their most recent campaign was in support of the Ebola crisis in West Africa and I’m sure you have seen their appeals on TV for a wide range of other disasters in recent years. You would think that this would be a straight forward accounting exercise, wouldn’t you: money in from donations equals money out to the charities that will spend it, minus wages for the DEC’s 12 staff, at which point the DEC should have a bank balance of zero.
I was therefore shocked to find that only 36% of the money donated was actually spent. That was about £25.6 million. So what happened to the other 74% of the donations? It turns out that £41 million was ‘retained for future use’.
I know it makes sense for DEC to hold on to some money. Once a tragedy strikes money is needed straight away and it takes time to organise an appeal – but holding back £41 million when you’ve only paid out £25 million anyway? Come on, something seems very wrong there.
By the way, of those 12 DEC staff 3 earned more than £60,000, that’s 25% of all their staff, and one earned over £100,000.
Now, here’s a real jobsworth type job. Two DEC staff are employed on ‘lesson learning’ (wages not specified). Surely it’s the job of all managers to learn lessons? At least that was what I was always told whenever I did any management training! So why are DEC employing two people to do what all managers should be doing anyway, as part of their jobs?
I don’t know about you, but I’m starting to wonder if I should be quite so generous with my charitable giving. I’m certain I should be asking a lot more questions.
I will still give to charity, but have now put the Charity Commission into my internet ‘bookmarks’ so I can find out just how efficient the charity is before I give. In the future I suspect I may be more likely to give money to those charities that use a larger proportion of their income to help the people that they are supposed to be helping. I will also be cutting out the middle man and giving direct to charities that are working in disaster areas, not to the DEC.
While I’m on the subject, however, I thought I’d take a look at an old urban myth. It’s often been said that the British public gives more to animal charities than they do to children’s charities. So I thought I would do the sums.
Between them the NSPCC, Barnados, Great Ormond Street Hospital, Action For Children, The Children’s Society and The Save The Children Fund raise over £1 billion a year, of which by far the greatest amount was £354 million for The Save The Children Fund. In comparison the RSPCA, RSPB, WSPA, WWF, Cats Protection and Dog’s Trust raised £451 million. Of course there are more charities operating in both the child welfare and animal welfare sectors, but I think I have captured the major ones in each. So it seems the urban myth is wrong.
It is true that the RSPCA collected more than the NSPCC; £121 million compared to £110 million, which is the problem when comparing single charities with each other. It’s this sort of comparison that probably gave rise to the urban myth in the first place. On the other hand Barnados collected £258 million, which is more than the RSPCA, Cat’s Protection and the Dog’s Trust combined. WSPA and the WWF only managed £88 million between them, not much more than Great Ormond Street by itself. So it seems we do care more about children than animals.
My purpose in this blog wasn’t to discourage anyone from giving to charity. Quite the opposite; I believe it’s very important that we do keep giving. But it’s also important that we hold charities to account and ask questions such as ‘why is your charity so inefficient?’ After all, we worked hard to earn our money, so the charities should work just as hard to spend it on the right things.
And now for the big news of the week. My latest book is now available to pre-order. Its actual release date is 7th December, but if you get in early you can avoid the rush. From the first words being typed to this point has taken over 2 years, but now you can enjoy it by going to The Ex-L-Ence Publishing website. The book is free if you are a subscriber to Kindle Unlimited.
* All the figures quoted relate to accounts received for financial years ending before 31st July 2013, which are the latest available at the time of writing.
** Information on employee numbers and salaries are contained in the ‘Notes to the accounts’ towards the end of the accounts sections of the charities’ annual reports if you want to dig that deeply.