Charities; a force for good or just a massive con?

What are Charities?

charity-where-does-your-money-go-tree-huggers-save-the-trees-lion caresses a christmas tree

Charities help those in need. This could be; people, animals or even environment. Power to all the tree huggers!

A charity is an organisation that helps those in need. Think; people, animals, environment.

Charities collect donations which are meant to be used for charitable causes. For example, when the Nepal Earthquake hit, several charities collected money to help those affected.

Charities are “nonprofit organisations”. This means any money they receive goes to the aims of the organisation. They also don’t get taxed on donations they receive.

 

Why are we talking about Charities?

A review commissioned by the government has recommended that people should be allowed to choose not to be contacted by charities. Cold-calling and other forms of fundraising are also being reviewed. If charities break the rules they could face a fundraising ban.

“Charities need to view and approach fundraising no longer as just a money-raising technique, but as a way in which they can provide a connection between the donor and the cause.”

People are questioning the methods charities use in order to get donations. It was reported a pensioner called Olive Cooke took her own life after being “hounded” by charities. She had recently cancelled her direct debit payments to the charities. Cooke’s family later said that charities had nothing to do with her death, but not before the story was picked up by all top tier news publications.

Some charities use call centres to contact people and to pressure them for donations. Scenes of Reason spoke to someone, who would prefer to remain anonymous who has fundraised for a well-known charity:

“The worst was that the people who tended to sign up would be little old ladies who don’t really have the money but don’t want to say no. I just used to let them go if I felt they couldn’t afford it – that seemed to be the main response. But if you ask three times they give in.

The tactics were basically guilt tripping. You had three pages of script designed to make them feel bad”

These call centres often set targets. Hit these and you get extra dollars in commission; fail and your job is on the line.

“They wanted a 25% conversion as a target… they would send you home [if you didn’t meet the target]. We got £3 for every sign up. People would get annoyed the third time you asked for money but we’d get told off for not asking three times… the managers would stand around you like hawks”

 

Doesn’t sound great… but it’s all for a good cause, right?

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Charities such as Age UK and The British Heart Foundation spend under 50% of their income on charitable activity! Well well well…

Questions have also been raised over how much of the money donated actually goes to the cause.

Most charities should aim to put 75% of money received into charitable activities. The rest is spent on office costs, staff pay and promotional campaigns. The 75% target is according to the American Institute of PhilanthropyWith a name like that they sound like they know what they’re talking about.

But some charities actually fall WELL below this target. Charities such as Age UK and The British Heart Foundation spend under 50% of their income on charitable activities.

 

Where is the money going?

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There have been examples of charity executives pocketing millions of pounds! Could that be where your donations go??

There have been examples of charity executives pocketing millions of pounds. At least 30 charity bosses from the UK’s largest charities were paid over £200,000 in 2014. Maybe they see themselves as a charitable cause?

Some charities also end up spending so much on promotional campaigns there isn’t much money leftover to spend on charitable stuff. In 2013 UK charities spent £394 million on advertising. Not much left to actually help then?

As well as call centres charities also fork out masses of money on “Chuggers”. Charity muggers are those insanely happy chappies who hang around by stations and shopping centres. Make eye contact with them at your peril. Charities like Cancer Research UK, Save the Children, British Heart Foundation and many other spend millions of pounds on Chuggers each year; the equivalent of over £100 per each sign-up donation in some cases. Chuggers are often hired through third-party companies so some of the charities’ money ends up in the bosses’ pockets.

Food for thought: Recently accused of corruption FIFA is actually a non-profit organisation. But that doesn’t mean all charities are dodgy:

 

Most charities are good though, right?

It’s easy to distrust the big charities when you hear horror stories about what they get up to.

Joe Saxton, the founder of charity research group NFP Synergy thinks “one thing charities need to get better at doing is making people feel that it’s OK to say no, rather than making them feel hassled and under pressure, especially if those people are vulnerable.”

However he also thinks it’s important to remember that most charities are actually there for a good cause:

What you’ve got to remember is around half of all charities have an income of less than £10,000 a year. Even more than that have no paid staff… the number of charities that are “fronts” for anything they shouldn’t be is absolutely tiny. That’s still too many and there have been a few high-profile examples but the vast majority of charities are there to do good work and they do actually do good work. More charities means more people being charitable.

So, don’t believe the horror stories. The majority of charities are doing good things.

 

Today’s learnings; charity is definitely a good thing, but you shouldn’t feel pressured into donating. Local charities are always a trustworthy option.

Is it better to donate to charity or actually go out and help somebody yourself? Is charity donation just a way to feel better about yourself?