The bloated charity sector can’t always be trusted with your money

Published by The Daily Telegraph (16th July, 2015)

Among current topics of debate in Kenya is whether the country should push through a proposed ban on imports of second-hand clothing. The reason for this draconian move is simple: like other African nations such as Ghana and Tanzania, it has seen the collapse of a thriving textile industry after the dumping of discarded Western clothes. All those shirts, skirts and suits donated to local charity shops have ended up worsening problems in the developing world rather than alleviating poverty as promised.

This shows how the swollen charity sector often ends up shooting itself in the foot in its remorseless search for funds. Oxfam, which loves to portray itself as a force for good in the world, sends abroad half the clothes donated to its 700 stores in order to keep cash flowing into its coffers. Such tactics may be short-sighted but they helped it become one of the ten biggest charities in Britain with an income of almost £400m.

Last week its deputy chief executive was on the radio defending another funding furore – the use of a firm accused of harassing vulnerable people on the official ‘opt out’ database. She insisted Oxfam had “high ethical standards” and denied turning a blind eye so long as money kept flowing. Yet only last month it suspended dealing with another call centre using high-pressure fundraising methods – and again, only after they were exposed by journalists.

If her claims of high standards are correct, it raises questions over the competence of its executives. Yet Oxfam is not alone in the spotlight: Save The Children, which saw income soar an impressive £59m last year, also suspended dealing with the firm. Three other respected bodies – the British Red Cross, NSPCC and Macmillan Cancer Support – are being investigated by the Information Commissioner for using what he termed “a boiler room operation”. And it was revealed complaints over charity fundraising have risen eight per cent since last year.

Sadly, there is nothing surprising about all this. Behind their shining cloaks of compassion, some leading charity brands have evolved into self-serving corporations with bosses on big salaries and bloated bureaucracies supported by slick marketing and smooth fundraising machines. Those smirking chuggers that stop you in the street are the least of the problem – as highlighted by the tragic death of 92-year-old Olive Cooke, a dedicated poppy seller who killed herself after reportedly being bombarded by requests from charities.

This is now a £65bn sector employing 900,000 people – bigger than the hotel and food industries combined and not much smaller than retail. There is huge duplication that breeds intense competition for cash, with almost 600 charities seeking a cancer cure and more than 350 charities for birds. Yet the Charity Commission has proved itself pathetically ineffective at controlling all these bodies; a parliamentary inquiry last year found it had not removed even one trustee from 165,000 registered charities over the previous three years.

Most concerns are over the big guns, the household names that provoke an average of almost two complaints a day. Offenders include some aid groups that have grown fat from the global poverty industry, constantly demanding more money even as the government’s absurd commitment to ring-fencing foreign aid ensures vast sums of taxpayers’ cash end up in their pockets. Still they pester the public with heart-rending pleas for help, despite growing questions over their efforts and effectiveness.

As budgets and bureaucracies ballooned, they started using new tactics and tricks. So they still use disasters to raise funds by planting spokespeople and logos on television screens, alongside raffles and street stalls. But now they have departments dedicated to exploiting naive celebrities to win public support, use online petitions on fashionable causes to build up databases, hire irksome third-party cold calling firms – and some still run “poverty porn” advertising discredited for presenting such a false image of modern Africa.

There are superb charities out there. The difficulty is how to find them – especially since many are wise to the issue of administration costs and skilled at burying central spending in the books. One crude rule of thumb is to look for a simple sign of distorted priorities: just as you should sell shares in a firm building lavish headquarters, so avoid donations to a charity paying big salaries to top brass. Why, for example, does Save The Children need 28 staff in London on hefty six-figure salaries when Medecins Sans Frontieres – heroes of the recent ebola crisis – hands its chief executive here £73,000?

If all those charities demanding money really want to protect birds, cure breast cancer or banish poverty then one obvious solution would be for many to merge. Less money would be frittered away on expensive head offices and armies of staff, with more going on good causes. But this is unlikely to happen. Instead the press, politicians and public must be less credulous when it comes to charities for, as can be seen with increasing clarity, they are often far from secular saints.

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