This headline appeared in the Telegraph this week. The team here at Community Impact Bucks spend time working with individuals who often receive little, if any, paid reward and give their time and energy to others through voluntary and charitable work – so I am bound to leap to defend charities. I see the good work most of them do. That is not to say they have all got it right nor do all necessarily give great return on investment.
Typically the headline statement above is based on a very blunt measure that gives, in many cases, a misleading result. In this case the calculation seems to be based on turnover (money in) measured against how much money is spent “directly” on services to beneficiaries. Sounds straightforward? But … what lies behind these headlines is complicated. Yet the damage is done in one swish of the quill (or stab of the laptop keys – but you see the point).
So why do some charities look like they have plenty of money coming in and not an equal amount being spent on beneficiaries? Some of the issue is actually a result of charities trying to survive without grants and donations. Charities are being encouraged to “trade” in order to be self-reliant rather than relying on donations. However, it costs money to “trade” – it is like running any business – and returns will vary, meaning the measure used by the Telegraph takes no account of the cost of running a diversification, such as a high street shop.
It is clear that some charities do not spend enough of their money on the beneficiaries. Yes it does cost to run a charity, and it even costs to support volunteers, but there should be a level of clarity about how much of your donation is used up in areas that do not directly impact on the beneficiary.
But why use such damaging and inaccurate sweeping statements? (Obviously to sell papers!) If there is a silver lining to the statement above it could be that it makes a good case for giving to local small charities that you know. Charities where you can see the impact first hand. But we know that the effect of this headline will not result in people who have given to large charities swapping and giving to a local charity. It will result in those people not giving to any charity. Probably because what most people will read is that charities are at best wasting your money and at worst embezzling it! Despite the headline identifying a few national organisations it will be read as all charities.
What concerns me is that this headline comes after a run of “charity bashing” that has been going on all year. This “charity bashing” is damaging for all of us because it will mean that volunteers will be less likely to give their time to help others, and those who rarely give to charities will feel it less attractive to do so. And it matters. With over 70% of charities in Bucks stating that demand is growing at an unsustainable level they need every hour and every penny to support others.
We all rely on the generosity of others as volunteers and givers to charity. And if you think you don’t just consider how often you, your family or friends have engaged with elderly support services, village events, cancer care, countryside, children’s services …….. and if you have never had the benefit of a charity it probably means that you didn’t realise they were a charity – or you have been extraordinarily lucky in life.
Charities could be better and be more transparent about how they spend their money – but most actually give outstanding return on investment. The Bank of England’s Chief Economist, Andy Haldane, recently cited one charity as delivering a social return on investment of 140%! ….. but that news didn’t hit the headlines!