Charitable Misgivings

Reposted from 7 July 2015

Last week it was revealed that prominent children’s charity Kids Company had millions in government funding withheld following accusations of mismanagement. The government were alleged to be holding out for the charity’s founder, Camila Batmanghelidjh, to resign which she has duly done. Taking into account that 2015 is the year of the brief resignation (we’re looking at you Nigel) and the fact that Batmanghelidjh has been described by a former youth worker as a “South London Sepp Blatter”, we won’t hold our breath for an amicable divorce.

Whether the accusations are true or the government is simply unable to handle criticism of its policies (or a bit of both); one thing is for certain, the fallibility of charities is once again the public eye. A timely reminder that, as with charity, scrutiny should start at home and we should be more careful with our giving.

However, the ever increasing numbers of people taking on sponsored marathons, swimathons, triathlons etc. has increased pressure to donate to charities we’ve never heard of; unsurprising given that the number of charities in the UK has swollen to numbers large enough to rival the pantheon of Hindu deities. No joke, there are over 181,000 charities registered in England and Wales alone and their total annual revenues exceed £64 billion. With this in mind, who these organisations are and what they do with our money (not to mention whether we should even donate to them in the first place!) become increasingly pertinent questions.

Many charities, much like large corporations, rely on brand loyalty. Those that market themselves best, often through slick advertising campaigns designed to pull both heart and purse strings, can build up their base of donors and volunteers. This behaviour inevitably leads to disproportionate donations, a fact that is excellently illustrated here.

Some of these larger charities have an equally large investment portfolio. While the charity sector is hardly the military industrial complex (they do flirt with it though, see below), there is clear evidence of large charities overreaching themselves, with results varying from embarrassing to infuriating. A favourite example to get pissed off about is none other than Greenpeace, who blew an astonishing £3 million on currency speculation in 2013. Nice one guys.

Unease at the financial dealings of charities should not be limited to losses in the market, they are perfectly capable of getting themselves mired in problems due to ethically questionable investments too. Would you donate to a cancer charity that invests in fossil fuels given that air pollution accounts for the deaths of 6% in the UK annually and approximately 6.7 million people globally in 2010? What if they invest in cigarettes? Would this not be an obvious conflict of interest?

The law is clear in this instance; charities are not required to avoid conflicts of interest unless the charity opts to avoid them in its governing documents. In fact, charities are encouraged to seek the maximum possible return on their investments and if they do adopt an ethical stance with a lower return they are required to explain why this is the correct approach.

Given this freedom to operate, many charities invest in pooled asset funds and exert very little control over the nature of the investments made by these funds, with morally nebulous results. Again there are examples of astounding oversights, Comic Relief were caught with their pants down investing in arms, tobacco and alcohol and the Archbishop of Canterbury Justin Welby claiming to want to out compete the short term cash loans company Wonga, which he subsequently had to admit that the Church of England had invested in, was a total farce. None of these examples constitute a crime, but if this happened to your donation you might find yourself more than a little pissed off.

While smaller charities may avoid the trappings that come with large incomes, they have their own issues caused by less professional forms of management or fewer checks and balances. Case studies found here vary from basic human error to deliberate fraud and failure to remove a convicted paedophile from the position of chair of the trustees. Seriously, *INSERT JOKE ABOUT CATHOLIC PRIESTS HERE*.

Couple these disheartening examples with increasing public sector cuts, which will force charities to shoulder an even greater burden, and the importance of being discerning when giving becomes apparent.

There are of course other ways to be charitable without donating money to registered charities. Currently, the NHS is in the middle of a drive for new blood donors, assuming you’re not an active homosexual *rolls eyes*. If needles aren’t for you then perhaps you have a skill that you can put to good use volunteering? Or given the increasing number people rough sleeping perhaps it’s about time you didn’t pretend to have no change. The upside being that it takes very little time and at least you’ll know who 100% of your money is going to (on average 87% of your donation goes to the cause).

Another interesting and proactive option is to become your own microcharity, as discussed here. The idea is to avoid fighting the big fight (cancer, HIV, polio etc.) because the odds are that your contribution will be insignificant in comparison to the efforts of the rich and powerful. This is a cynical argument I know, but in doing this you free yourself up to make a more significant difference at a local level.

Whatever way you want to contribute, stay charitable but be discerning.

Useful links

List of registered charities

If you do encounter a dodgy charity contact Action Fraud

JW

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