Notes on Charity

A few years ago I began to collect newspaper cuttings which featured various problems concerning the operation of UK charities.

It appeared at the time and has seemed so since that charity, the greatest of the virtues, was being abused by some of the managers heading up the charities. The Daily Mail was raucous in its condemnation of these hypocrites. The Times was similarly critical, but as usual, was rather more subdued and cautious in its approach.

Other topics subsequently caught my imagination, notably Brexit, and I allowed the subject of charity to be transferred to my back burner.

All the President’s Men

My interest was re-kindled by events in the Dorchester Hotel on the evening of January 21, 2018. The gist of the story was that an expensive men-only event had been held at an expensive venue with the avowed purpose of raising money for charity. So far – so good.

Sadly, it was belatedly discovered that the proceedings had been enlivened or marred, according to taste, by the presence of many young ladies of the nubile variety, ostensibly as waitresses, and that the behaviour of some of the male guests towards these young ladies had been “inappropriate.”

I was intrigued to note the rapidity with which some of the guests sought to distance themselves from what had transpired. Indeed, so many guests claimed to have left early that it appeared that the young nubile ladies were left to molest each other.

One of the guests who was appalled by the proceedings was the Vice Chancellor of Bolton University, George Holmes. Readers of this blog may recall that George Holmes figured prominently in the list of greedy vice chancellors seeking unsuccessfully to justify their absurdly inflated salaries. It may be that I owe George Holmes an apology – I had not understood the tireless energy with which he worked long hours in his own time to alleviate the sufferings of the poor.

To return to my central theme – what is about the management of charitable activities that so often seems to fall far below the standard required?

In the following notes I will try to shed some light on the charity sector and to ask if there have been improvements since the very public scandals that have hit the headlines in recent years.

It seems to me that all is not well and that, despite determined efforts by the authorities to ensure that cash collected by charities ends up in the pockets of its intended recipients, that this is by no means always the outcome.

Ongoing concerns about the sector include:

• Allegations that some senior managers in the sector have diverted rather more of the funds entrusted to their care to their own bank accounts than to the relevant charities.
• Some of us have been startled to read about the extent to which charity finances are entangled with taxation issues with the result that the beneficiaries are usually tax experts who move with cat like tread in the complex thickets of taxation rules.
• Most donors to charity would expect that most if not all of their contributions went to the intended recipients. Sadly, the investigations by media flushed out far too many instances where this was not the case.

Put bluntly much of the criticism heaped on the charity sector centred on the perception that far too much of the funds collected ended up in the pockets of the managers, and by a simple process of arithmetic, far too little to the worthy causes.

“Though I speak with the tongues of men and of angels, and have not charity, I am become as sounding brass or a tinkling cymbal.
Though I have all faith, so that I could remove mountains, and have not charity, I am nothing…..
Charity suffered long, and is kind; charity envieth not; charity vaunteth not itself, is not puffed up, doth not behave itself unseemly… is not easily provoked, thinketh no evil……
And now abideth faith, hope and charity, these three; but the greatest of these is charity.”
1 Corinthians Chapter 13 – St Paul.

St Paul let the Corinthians have both barrels in his well-known epistle. Might it have been the case that at that time there were those in Corinth who needed to be taught a sharp lesson on the supreme virtue of charity?

“Every genuinely benevolent person loathes almsgiving and medicity
Charity is the most mischievous sort of pruriency”
‘Maxims for Revolutionaries’,  Man and Superman – Bernard Shaw

Two millennia later Shaw took a very different view of charity from that taken by St Paul, indeed he took a very dim view of charity.

Which of them was right and why?

A recap – Back in 2015 I sent the following (unpublished) letter to The Times

Sir,
Two elderly gentlemen of benevolent appearance had cornered a morose Mr Scrooge before Christmas.
“A few of us are endeavouring to raise a fund to buy the poor some meat and drink and means of warmth…. What shall I put you down for?”
“Nothing!” Scrooge replied.”
“You wish to be anonymous?”
“I wish to be left alone” said Scrooge
A Christmas Carol. Charles Dickens.
It is likely that Dickens intended his readers to suppose that the two gentlemen fund raisers who begged the support of Mr Scrooge were acting in an unpaid capacity and would not dream of claiming any expenses incurred in carrying out their charitable work.
A comparison can be made between their commendable efforts and the work of contemporary fund raisers. The front page report in today’s Times paints a slightly worrying picture about what happens to the funds raised in the highly competitive market that constitutes charitable work in 2015. For instance – of the money raised – how much ends up helping up the poor and how much ends up in the pockets of the fund raisers?
It would appear that a significant number of managers in the UK charity sector are working tirelessly to ensure that those responsible for allocating funds are firmly committed to the principle that charity begins at home.
Until this sector is subject to the sort of (unwelcome) publicity supplied by your report I suspect that the public may well be tempted to give the same reply as that of Mr Scrooge.”
John Holden

The Times was unable to find space to accommodate my cynical suspicions but on the plus side the Times has been commendably supportive of attempts to clean up the charity sector.

What exactly is a good cause? Is your idea of a worthy cause the same as mine?

The formal dinner arranged by the Presidents Club referred to earlier was attended by two gentlemen who shared the name Philip Green.

• The first PG was Sir Philip Green of BHS notoriety.
• The second PG was plain Mr, but his notoriety was of the Carillion brand.

Clearly both PGs were only too ready to support a high-profile charity event, although neither was anxious to be seen to endorsing the cavortings alleged to have taken place.
I have no views on the cavorting – I was not there at the kick off and so was unable to leave when the proceedings got out of hand. The episode brought to my mind the phrase always used by News of the World reporters in bygone days – “At this point I made my excuses and left”

I do have views on causes that are worthy and causes that are rather less than worthy. I suspect the two PGs would define a worthy cause as one which enabled them to rob the poor – not a universal accepted definition and significantly at variance with hallowed tradition.

Who is right – the pair of Greens or the Dickensian traditionalists?

Is your good cause my good cause?

What sort of flaws and abuses in the charity sector were made public?

Let us start at the start at the top by looking at the performance of the Charity Commission. Why not allow Mrs Margaret Hodge, the doughty acerbic Chairman of the Public Accounts Committee, to do the job for us.

“The Public Accounts Committee had issued innumerable reports criticising the Charity Commission. By 2015 the commission was responsible for monitoring 165,000 registered charities that between them boasted an annual income of £69 billion. Yet Committee Reports in 1988, 1991, 1998, 2001 and then our report in2013 all found severe shortcomings in the work of this regulator……
“In the previous 4 years it has removed only one trustee from their role and it had frozen the accounts of only two charities. It was the guardian of the public interest for the charitable sector and I found its performance pretty dismal …..the chairman , William Shawcross, was another old Etonian … in my view he was appointed because of his politics , not his experience.”
From “Called to Account” by Margaret Hodge

I recall watching one session when Mr Shawcross was attempting to explain what was going on within the Charity Commission or rather what was not going on. He cut a lamentable figure as he tried and failed to answer the simplest of queries from PAC members.

The obvious conclusion to be drawn – and which was drawn – was that if the performance of the hopeless helpless Mr Shawcross in his role as Regulator in Chief was par for the course in the Charity Commission – then the vultures and / or sharks – choose your own metaphor be it nautical or aeronautical – on the lookout for easy pickings – had nothing to fear from that source.

Sadly Mr Shawcross added a whole dimension to the word pathetic.

What other flaws and weaknesses were flushed out?

In no special order:-

• The salary packages of some senior managers were felt to verge on the excessive.
• In the case of some charities it was not easy to ascertain just what percentages of the funds collected had found their way into the pockets of the intended recipients.
• The expenses incurred by some charities were perceived as being – well not exactly in keeping with austerity of the times.
• The link between HMG and the charity sector and HMG/HMRC emerged as an issue. I very much doubt if I would support the objectives of the every single one of the 165,000 charities – and yet all of them benefit from tax concessions.
• The spread of the curse of bonus elements in the reward packages.

A selection of case studies – to get the show on the road.

1. Kids Company

“Such a very profligate luvvie – Charity scandal raises troubling questions about BBC boss who loves spending your money”
Daily Mail, August 7, 2015

“Mystery of charity’s unpaid £700,000 tax bill”
Daily Mail, August 7, 2015

“BBC boss rages at reporter investigating Kids Company”
Daily Mail, August 7, 2015

“Underfire charity was given clean bill of health”
The Times. July 8, 2015

The gist of this story was that Kids Company, a charity run by the exotic Camila Batmanghelidjh, was thought to be spending rather too much of its uncertain income on funding an expensive lifestyle for CB and for her close colleagues.

This particular story was spiced up by the revelation that one of her close colleagues was Mr Alan Yentob of BBC fame or notoriety – according to which newspaper you read. One piece in The Daily Mail reported that Mr Yentob had been quite tetchy with a BBC reporter, Lucy Manning, when questioned about various problems said to have arisen in the management of Kids Company. Mr Yentob said that “this is about the kids”, a perfectly reasonable point to make had it been the case that Kids Company had scrupulously ensured that the donations received by the charity had been spent on their intended recipients.

“Children recover with unrelenting love.”
One of Kids Company’s mottos.

Who could possibly argue with this proposition?

What is less clear is this – to what extent did the lavish lifestyle of CB that was funded by Kids Company help children to recover from whatever it was that they were suffering from?

2. Which?

“Which” chief paid £819k for year.
The Times, February 24, 2016

“The British charity set up to save money for consumers will give its chief executive (Peter Vicary-Smith) £819k for the year representing a 135% increase on the previous year.”
Ibid.

Nice work if you can get it.

“Which” does not receive direct funding from HMG, but does benefit from tax breaks because of its charitable status.

It was interesting to note that PV-S had worked for McKinsey in a previous life and he was well placed to recognise a managerial cushy number when he saw one.

Another interesting point to emerge from the PV-S piece was that “Last year The Times revealed that more than 1000 charity chiefs were paid six figure salaries by voluntary organisations.”

This item was quite coy when you think that six figure salaries range from £100k at the bottom to £999k at the top – that is what I call a big spread.

Charities and tax

“Fat cat charities rely too much on taxpayers. For all the good they do, it’s time voluntary organisations accepted there are strings attached to taking public cash.”
Headlines above a piece in The Times by Libby Purves – February 8, 2017.

This was a splendid column by Ms Purves. She highlighted the extent to which “ a great many charities have in effect become quangos:…. They are sustained by grants and lucrative central or local government contracts…….. The bigger the charity is the more likely it is to be heavily funded by taxpayers . The 139,000 smallest charities get only 3% of this state support”

Ineffective control of both income and expenditure

“RHS boss stole £700k to fund party lifestyle”
Daily Mail, July 23, 2016

According to the article, “A senior manager at the Royal Horticultural Society lived the high life using money he stole from the charity. Stuart Medhurst persuaded friends to submit fake invoices to help him carry out his fake £700k ten-year scam… the case has shocked the RHS.”

Well it would, wouldn’t it?

“A former financial controller has admitted stealing £440k from a hospital charity”
The Times August 14, 2017

Let us name and shame him: Ronald Chigunwe of Basingstoke pleaded guilty to four charges related to his job at Wessex Heartbeat which supports the Wessex cardiac centre.

(Just a thought – how effective were the procedures which allowed Mr Chigunwe to help himself to almost half a million pounds?)

“Charity run by Cherie’s sister mislaid £90k.
Lauren Booth, Cherie Blair’s sister, has been stripped of her status as a charity trustee after £90,000 raised by her Islamic appeal went missing.”
The Times January 29, 2018

How exactly can £90,000 just go missing?

Stop press – The Times later published an amendment to the original report which noted that the penalty imposed on Lauren Booth was rather less severe than that reported.

I would guess that the £90k is still unaccounted for.

Should charity begin at home? Notes on the overseas aid scandal

Holdenforth does not have enough space to describe in detail the reports of the flaws in the arrangements for ensuring that funds provided by the British Taxpayer to support worthy causes abroad reached their planned targets. Suffice it to say that the malpractices flushed out by the press sleuths amounted to a repeat of what had been exposed on the home front – only more so.

The overseas aid budget was splashed around with jaunty abandon, with those “responsible” believing – rightly – that the lack of scrutiny of their activities amounted to an invitation to help themselves – an invitation which they gratefully accepted.

A few examples will have to suffice.

“Too much aid money, not enough sense”
Daily Mail , December 20, 2016

This referred to the Mail‘s staggering revelation that Britain lavished £9.2 million of our foreign aid budget on promoting the careers of the Ethiopian Spice Girls …

“Aid minister promises a profiteering crackdown”
A Times investigation revealed that Department for International Development spending on consultancy services had doubled to almost £1 billion a year and found one think tank quoting Dfid more than £10,000 to write a single blog post.
The aid minister in question was Priti Patel, recently moved to other duties following her rash foray into matters outside the scope of her departmental responsibilities.
The Times, December 20, 2016

“Stunning victory for MoS foreign aid campaign as FOUR fat cats have to quit”
Mail on Sunday headline – March 5, 2017

The Mail on Sunday had a field day as it named and shamed four senior executives as Adam Smith International who had employed questionable methods to secure lucrative contracts for ASI and, obviously, to help themselves big time to the aid budget.

Let us follow the example of the MoS – the bad guys were:-

• Peter Young – Strategy Chief – we now know what his strategy was.
• Andrew Kuhn – director
• Amitabh Shrivastavata – director

I was confused by what the report had to say about William Morrison, Executive Chairman – he was to quit “after restructuring the firm.” I would have thought that a prompt P45 and 5 minutes to clear his desk would have been more appropriate.

Just one more.

“Consultants take billions from foreign aid budget”
The Times, December 8, 2016

The article observed that “The bank JP Morgan shared £1m in aid money with a law firm to advise on Nigeria’s sovereign wealth fund.”

These snippets do suggest that the Dfid was incompetent at best and corrupt at worst in its management and control of the distribution of the funds provided by the UK tax payers

The charity enforcers

“Stop the bullying, Charities told”
“Big four are savaged over phone tactics and asked: where are your morals?”
Daily Mail headlines July 8, 2015

Let the Daily Mail tell the story:

“Charities were ordered to clean up their act after the Mail revealed the aggressive cold calling tactics they use to raise cash.
The British Red Cross, Oxfam, the NSPCC and Macmillan were savaged over their use of “boiler room” call centres to secure donations.
The four charity giants were revealed to be hounding people on the Governments official “no call” list, the telephone preference service.”

The report added that fundraisers were ordered to be brutal with potential donors. In a separate report on the same day the Mail named and shamed four “£100k -a-year bosses driving cold-call menace”.

One employee of the enforcing four, Mr Mark Astarita, deserves special mention. One target of aggressive fund raising by charities, 92 year old Olive Cooke, committed suicide, and her tragic death was said to be in part to have been caused by the relentless pressure to which she had been subjected.

Mr Astarita cautioned against over-reaction claiming recommendations to tighten regulation could cost the British Red Cross £2million per year.

How sensitive can you get?

Further details of these possibly well intentioned sharp practices appeared in the Daily Mail two days later.

“Leading charities were in crisis after ministers threatened new laws to crack down on their grotesque fund raising practices”
Daily Mail, July 10, 2015

The above admonition was issued by Chris Grayling, the then Leader of the House, but I suspect that not all the reported abuses will have been discontinued. Mr Grayling is noted rather more for his words than his deeds, and, in any event, the tiresome issue of Brexit has occupied and pre -occupied political minds in recent years. Not much time left to tackle a real and present and widespread and odious social malpractice.

The Mail printed a sample of the many calls they had received on this aspect of managerial malpractice in the charity sector:

“After a TV appeal for blankets for Syrian Children I donated £3 by text. After that I was inundated by mobile phone calls at all times of the day.”

Addressing the Issues

I have outlined some of the problems that disfigure the charity sector. What about some solutions?

“Something must be done.”
Comment made by Edward the Eighth when he was taken to see the appalling conditions in the South Wales coalfields in 1936.

Quite so, Your Majesty – but what exactly did you have in mind?

This blog has to do better than that. How about the following suggestions on how to tackle the ailments of the charity sector?

1. Start at the top – put in place a Charity Commission capable of effectively policing the charity sector.
2. In the search for new members of reconstituted Charity Commission – look outside the pool of deadbeats and political lickspittles of those in power that are typically recruited.
3. Eliminate all links between charities and the HMRC – both groups have enough problems to sort out without bringing them together.
4. When malpractices are exposed – all investigations by the Charity Commission to be prompt – the languid Chilcot adopted by Sir John Chilcot to be avoided here as it should be avoided everywhere.
5. I have suggested elsewhere that the practice of allowing senior managers to design their own bonus arrangements should be banned. Instead the inadequate to be handed a P45 — the competent get to keep their jobs. This rule to be extended to the charity sector.
6. Stringent rules governing the management and control of charity finances to be put in place in place. The practices used by the late Arnold Weinstock would serve as a splendid model – very little ever escaped the eagle eye of Lord W.
7. Impose harsh penalties for the plethora of sharp practices that are a feature of the charity sector. Those at the top caught with their fingers in the till need to be made aware that their exposure will not simply result in their being banned from future work in the sector. The lesson will only be fully learned when the top guilty men – it always seems to be men – are also relieved of their ill-gotten gains.

There are plenty more where these came from but they will do to get the project to cleanse the UK Augean Charity stables up and running.

“As an example of charity Live Aid couldn’t be worse… The performers donate their time which is wholly worthless. Big Corporations donate their services which are worth little enough. Then the poor audience pledges all the contributions and buys all the trash with money it can ill afford. The worst nineteenth century robber barons wouldn’t have had the cheek to put forward such a bunco scheme.”
PJ O’Rourke, Give War A Chance

It is doubtful if Sir Bob Geldof would endorse these abrasive comments by an abrasive columnist, but that is the beauty of the charity sector – so much scope for lively disagreement.

To return to my opening paragraph: Great Ormond Street Hospital is reported as having returned all the money raised by The Presidents Club.

What happens next?

A closing suggestion – Why not send the money raised at the unseemly dinner to an alternative worthy cause – the group of impoverished BBC celebrities and especially those of the male persuasion – the new untouchables.

Those in favour might care to contact Mr Alan Yentob at either the BBC or Kids Company or wherever.

A last word

Sir Stephen Bubb is the CE of the Association of Chief Executives of Voluntary Organisations – a most impressive job title.

He may have regretted having the spotlight shone on his activities when it emerged that in August 2013 it was reported that “his 60th birthday bash in Westminster had been partly financed by his own charity, ACEVO. Despite the charity paying him a salary in excess of £100,000, he still felt it was fine for the charity to cover some of the costs and opined that it “seemed just right to celebrate my 60th with a tea party in the House of Lords on Monday!”

Given the scale of the reported excesses in the charity sector at home and abroad it verged on the niggardly to upbraid Sir Stephen for charging the cost of a handful of wafer thin cucumber sandwiches to his own charity.

What do you think?