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It’s clear to me that bursaries don’t help people in poverty very much

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Friday’s charity tribunal decision on fee-charging schools and public benefit was claimed as a victory by both sides, although it strikes me as a loss for trustees for such schools.

One thing which struck me as a victory for everyone was a decided shift away from the idea that schools had to give bursaries to create a public benefit.

I went to a public school, and I did so on a bursary, and the process made it pretty clear to me that bursaries don’t help people in poverty very much.

First of all, they don’t tend to go to people in poverty. They tend to go to well-educated middle-class kids whose parents are a bit short of cash – or who just fancy seeing if they can pay less.

They tend, also, to go to kids who the school feels will benefit it in some ways. Schools are competing for pupils, and having top musicians, sports stars and academic high-achievers around makes the school look more attractive to folk whose kids haven’t got much to offer except cash. These kids are adornments, in exactly the same way as the wrought iron gates emblazoned with the school crest, and
they’re there, like those gates, to make the school look good. (I think I personally was a bit of a disappointment in that regard, but that’s a wholly different story.)

In addition, these are supposed to be charities which promote education, and if you want to do that, what you really want to do is encourage smart kids to spend time with other kids who need a bit more help. Schoolkids learn at least as much from their peers as their teachers, and stripping out the highest-achieving, most inspiring pupils from ordinary schools, and sticking them in a ivory tower instead, probably lowers the educational achievement of the average child in Britain.

Many public schools recognise this, and work with other schools in their area, offering them access to their resources – swimming pools, playing fields, music centres, class rooms – so that every kid can benefit. This, not the bursary, is the way forward.

The sector has a duty to be more open about the problems with charity bag collections

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Two things in particular struck me when I was doing research for this week’s feature on charity clothing collection theft and fraud.

Firstly, the good news. There does seem to be a genuine attempt by many organisations and bodies to try to tackle the problem in a meaningful way. From the National Fraud Intelligence Bureau to the Trading Standards Institute, and the Fundraising Standards Board to the National Association of Licensing and Enforcement Officers, a lot of work has been done and is continuing.

In my short time reporting on the sector, it is one of the most coordinated and wide-ranging responses to a problem I have seen.

But the second thing is not so good. It is the extent of the problem. By extent I mean both the seriousness of it, particularly the shocking violence that has been found happening within the gangs stealing the clothes, and the millions of pounds lost to the sector because of fraud and theft of
bags. And I mean the wide-ranging different types of problems beginning to slowly emerge.

We have the issues of: gangs posting fraudulent charity bags through doors; gangs picking up full bags on doorsteps opportunistically; companies taking advantage of small charities by promising to raise them a certain amount of money but never delivering that said figure; charities allegedly taking bags that belong to other charities; licensing issues; charities with shops rallying against charities that use commercial companies to collect their clothes; saturation of the market; and the rising rag prices.

It seems like there are so many problematic areas to this issue, a lot of them still wholly or at least in part shielded from public knowledge, that it is going to be very hard to coordinate a successful response without a lot more clarity.

I think the sector has a duty to be a lot more open about the various issues, even if it is to blame for some of them.

It’s understandable that there may be fears of public perception issues arising if there is more openness about these problems, but there seems to be a real crisis here anyway. Only with more clarity will suitable initiatives be  devised that are strong and high-level enough to really tackle this evidently huge issue.

Impact measurement is the sector subject du jour

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Analysing and measuring impact is a hot button for charities at the moment. Everyone seems to wants to know more about it. One piece of evidence for this was the high attendance at a Third Sector conference on the subject yesterday. So many people wanted to come that the event was twice moved
to a bigger venue and ended up in the conference centre of Arsenal’s Emirates Stadium in north London, which was a shock to the system of one or two Chelsea season ticket holders in the sector.

Charities that deliver services are at the front of the queue to swot up on impact because they see the writing on the wall: national and local government is moving strongly towards payment by results.
Organisations that can demonstrate their results with sound metrics are the ones that are going to get the business. This was made clear in a session by Matt Robinson, head of social economy at the Office for Civil Society, although he said that finding the right set of agreed metrics for various kinds of
services is a process that is likely to take several more years.

The final session of the day was an interview I conducted with Dan Corry, who had taken over as chief executive of New Philanthropy Capital only the day before, and Cathy Pharoah, professor of charity funding at Cass Business School and a Third Sector columnist. NPC has, of course, made a lot of
the running on impact measurement in the last few years, and Corry, a former economic adviser to Gordon Brown, gave a solid account of the undeniable case for charities to find clearer ways of expressing what they achieve.

The note of dissent came from Pharoah, who said the sector was being “bludgeoned” with impact measurement and didn’t dare to speak up and express reservations for fear of the economic consequences. Her argument was that measurement was self-evidently a good thing, but was not always easy or appropriate for some of the complicated social and personal problems that charities and voluntary organisations take on. Her message was: proceed with caution and don’t get too carried away.

The final word came from one of the delegates, who wondered if there was an element of fashion in the clamour for measurement and was worried that charities might be spending too much time and money on it. There will no doubt be different arguments to be made in different cause areas, and this is a subject that is not going to go away.

Experts slam tax relief proposals

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There are a lot of consultations taking place at the moment into charity tax reliefs: inheritance tax relief, VAT relief on shared services, relief on gifts of pre-eminent works of art.

There seems to be a common thread among all of them. In all cases, sector experts think the proposals are rubbish.

Inheritance tax relief has been derided as “complex, capricious and counterproductive” by Martyn Gowar of the  Chartered Institute of Taxation.

Gifts of art was described as “better than nothing, but not much,” by specialist charity lawyer Simon Weil, of Bircham  Dyson Bell. It has been presented as a charity relief, he says, but actually only covers gifts to the nation.

Meanwhile Ian Theodoreson, chair of the Charity Finance Directors’ Group, said that he “died a little inside” on hearing of how the shared services provision would work.

There are a number of factors for this lack of enthusiasm on the sector’s part.

One is that the sheer complexity of tax, particularly EU law has made it difficult for the government to do exactly what it wants. The government has been forced to engage in convoluted fiscal legerdemain in order to avoid breaking principles of fairness and impartiality. The proposals for shared services, in particular, have grown in complexity until they look like Winston Churchill’s description of Russia: a riddle wrapped in a mystery inside an enigma.

Another is the fact that some of this has been put together in a hurry. The government announced a lot of new reliefs in the last budget, and it’s been keen to get them into law quickly. The coalition administration has adopted a “shoot first, ask questions later” approach when implementing many new ideas, and sometimes they haven’t come out quite right on  the first attempt.

A third reason, I think, is the nature of expectation. Whenever a new relief is announced, the sector immediately  imagines one thing, while civil servants are simultaneously imagining something quite different. The sector wants a laissez-faire approach that allows them to get on with things – as, to an extent, do ministers – while HMRC wants to avoid any possibility of fraud.

I also think some sector reactions to the first proposal, for inheritance tax relief, has been a little harsh.

It will encourage donations from some wealthy folk. It will get a lot of tax advisors talking about legacies. And it is certainly substantially better than the existing relief, which is to say, nothing.

The proposals for gifts of work of art, however, may not even be better than nothing. I suspect I would prefer not to have this relief at all, because having something this restrictive in place already will set a bad precedent, which will make it more difficult to campaign for reliefs that actually work.

Why do some smart people lose their faculties when talking about charities?

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Sometimes, it seems that the topic of charity makes even intelligent people say stupid things.

The other day I had dinner with a friend of mine who I admire very much. He’s a very smart bloke, he’s made a lot of money, and he’s generous to good causes.

We talked a bit about my work, and after a little while he said: “I don’t like it when charities spend any money on administration costs.”

This didn’t make much sense, so I pressed him on it. Could they hire a receptionist? I asked. Pay someone to fix the lift? Buy stationery?

He was adamant. Charities should spend nothing on admin. Not a penny.

“Intellectually I know what you say makes sense,” he said. “I just don’t like it, that’s all. That’s all there is to it.”

It’s all too common that smart people lose their faculties when talking about charities. Giving money appears for much of the public to be an instinctive, emotional response. A lot of people seem to get genuinely quite uncomfortable at the idea of putting a bit of rational thought into their giving.

And this lack of intellectual engagement often results in a lack of knowledge. Many people are like my friend in that they have a great affection for charity, but don’t really know what most charities do. And they get annoyed when they  discover that charities don’t do what they thought.

The outraged public response to last week’s story in which the British Heart Foundation criticised commercial bag collections is an example of this. The BBC website carried a general outpouring of anger at the fact that someone was profiting from bag collections – but also at charity CEOs’ salaries and administration costs.

A number of these comments obviously came from the green ink brigade, but it’s still a bit worrying, because charities have to get money out of the general public, and this often means pandering to their prejudices. The emotional  response from donors warps what the sector can do and how it thinks.

A while ago, for example, Save the Rhino was heavily criticised because they were found to support rhino hunting. After a few minutes’ investigation, it became pretty clear that they’d thought about their position quite deeply and their logic made sense. They obviously knew a hundred times as much about rhinos as any of their donors and ought to be allowed to get on with it.

But most people didn’t get that far, and reacted instinctively. I can’t help thinking, in this case, that it might have been better for the charity’s bank balance to do something that looked right, rather than what was right.

Many charities seem to have responded to this problem by appearing to do things that appeal to donors, while actually doing something quite different, and making sure no one outside their organisation knows.

This doesn’t sound like a very good recipe for long term success, but it’s hard to see how to avoid it. The public don’t have the time or inclination to understand how charities actually operate, but their money is badly needed.

So I suspect the sector will continue to keep the truth to itself.

Something needs to be done about charity clothing collections before it’s too late

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So it seems that chugging got some time off this week as the
most publicly-derided form of fundraising.

Research by the British Heart Foundation about
where exactly the clothes people donate in charity bags end up – mostly sold
aboard as rag, apparently – got nationwide coverage and ignited some serious
debate.

There are a lot of very serious, threatening problems that
doorstep collections are facing right now. Organised criminal gangs posting fraudulent
bags through doors or stealing full charity bags from doorsteps are among the
worst of these.

The sector is up against far more than just the problems it has created for itself, so I feel it’s time for more collaboration in
this area rather than further in-fighting or territorial behaviour.

I realise every charity needs to raise funds to continue its valuable work, but every charity also holds part of a collective
responsibility to maintain the sector’s reputation amongst the public.

If the public stops trusting charities – and, to a
frightening extent, once people start to distrust some charities, they
very quickly seem to tarnish others with exactly the same brush –
then the sector is likely to lose a lot of time, money and other forms of
donations.

One obvious problem the
sector could start trying to solve is the fact that there must be many
wearable items of clothing that are shipped off as rag overseas, while
charity shops must be given plenty of clothes that no one is ever going to buy
from them and has to be sold as rag.

Marking bags clearly to tell the public where the items will
be going, and therefore what type of items it would be best to donate, is one
option the sector could look into.

Another may be some sort of collaborative system so
charity shops can give rag to charities without shops, in return for items that
are far too good to be rag.

There are obvious practicalities to consider carefully, but solutions do need to found. This is the first of
many issues that could be tackled by charities together. Another would be thinking about the
number of bags the public receive – a startling 60m a year, according to one
recent report.

So instead of any more arguments about who has the right to
all these clothes, maybe it’s time to start thinking about collaborating and
creating a more successful form of fundraising for everyone – before the public
get any more confused about and distrustful of donation bags.

Let charities run local newspapers

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This week, a group of academics, journalists and charities proposed that charities should run local newspapers.
At the moment, it’s far from clear whether a newspaper can be a charity. Many legal experts think so.

The Charity Commission is sceptical. The new proposals ask the government to make it easier for them to do so.
Providing a local paper ought to be a charitable service, and I hope the sector gets behind the campaign to make it a charitable activity.

I should declare a fairly strong personal interest here. As well as being a Third Sector reporter, I’m also working with other journalists and charity workers to set up a not-for-profit local paper. It’s at an early stage so far, but it’s had a lot of support, and I’d like to explain why I think it’s the right way to go.

Local newspapers, for starters, have a definite public benefit. They provide information about local events, they keep people in touch with local schools, services and charities, and they hold politicians to account.

But they are in crisis. Their traditional sources of funding have dried up and their owners have responded by slashing budgets to the bone.

From personal experience I can tell you that reporters are stuck at their desks, reduced to rewriting press releases because they have so much space to fill they cannot investigate what’s really going on.

To give just one example: my first job as a journalist was on the Billericay and Wickford Express, but my office was in Brentwood, 10 miles away. I spent six months writing about Wickford before I ever visited it.

Communities without a decent local newspaper suffer, because local papers do an important job holding local politicians to account, whether they are selling council land at knock-off rates to developers, or giving planning permission to mega-churches owned by dubious reverends, or forbidding parking wardens from ticketing motorists living in wards where they’re standing for election.

Community organisations could provide local news better and more cheaply than the big national companies, which dominate the scene at the moment.

They have the trust of local people, they are close to the folk on the ground, and they can attract volunteer support. They can be honest, impartial, and representative.

They can provide services more cheaply than a profit-making company because they don’t have the same need for a margin; they can access a lot of services more cheaply than a business; and they can attract grant funding. They may be able to survive where a commercial business would fail.

This idea is a winner. It’s something I’d like to see the sector get behind.

Chuggers worried about new PFRA penalties

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The Public Fundraising Regulatory Association caused controversy in the
sector last week with its announcement of a penalty points system for
organisations whose street fundraisers break the rules.

“Breaking the rules” could be as seemingly trivial as taking
more than three steps alongside a potential donor, or straying outside an
assigned area. More seriously, it could involve aggressive behaviour on the
street.

To get an honest, front-line reaction to the new system I stopped
during a lunch break last week to ask a chugger what he thought.

Despite not having heard of Third
Sector (shock, horror!) he knew all about the PFRA’s plans.

“To be honest, I’m terrified of PFRA inspectors as it
is,” he said. “The rules are so strict. We all break them all the
time, because it’s so hard not to. But I think we still stay within
reasonable social limits and we aren’t pushy.”

So what will happen when the fines come into force? “We’ll
be in a mess,” he said. “It will be really debilitating. You need
to have confidence to approach strangers on the street and if we’re
constantly worried about not putting a foot out of place we won’t be able
to do our jobs.”

Many will no doubt be happy to see chuggers have their wings clipped in
this way. But some charities will see the measure as heavy-handed, especially
since such tight regulation does not apply to most other forms of fundraising.

One thing, though, is becoming clear: if my chugger is right, the
PFRA’s new stance could be a game-changer. It could significantly reduce
the scale of street fundraising and – perhaps – significantly improve its
quality.

 

Will street fundraising fines makes chuggers less pushy – and less effective?

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Chuggers.

I’d say you either love ‘em or loathe ‘em,
but most people I talk to tend to fall into the second category.

It’s probably one of the most contentious
topics I come across when talking to friends or family about the charity
sector.

I find I’m split on the topic. Hammersmith
high street seems to be a hotspot for street fundraising, so I’m accosted on a
daily basis while popping out to the shops to pick up some lunch.

But, despite a mild irritation, I can
also understand the benefits of signing up long-term donors and what that can
do for the charities to be able to form a relationship with them, rather
than being a faceless person throwing 20pence into a collection tin on the
street.

This week, the PFRA announced it would be
introducing a penalty points system for organisations whose fundraisers are
guilty of aggressive behaviour or working outside an assigned area. They will
be awarded points for bad behaviour, with each point having a value of £1. If
an organisation accrues more than 1,000 points a year it will be billed the
equivalent amount in pounds.

While some people clearly find chuggers at best irritating, and at worst intimidating, there is the worry that the
fines-based system may reduce the effectiveness of charity fundraisers if
they are too scared to approach the public for fear or accruing a fine.

There does need to be an element of
pushiness, because it’s just too easy otherwise for people to walk on by.

Last week, during a quick lunch break, I
found myself faced with a fundraiser from a charity I have been tempted to
donate to in the past, but I found others always took precedence. I was in a
rush and tempted to walk on by, but the fundraiser casually approached me and
with a friendly, confident manner made me stop. He was determined, and, I guess
a little pushy, but without that I would have kept going.

Maybe I was in the right mood, or maybe it
was because it was a charity I wanted to donate to but just hadn’t had time to
before; but if he’d stood there passively, he would have watched me walk right
on by. As it was, I signed up.

Street fundraising works. That’s why
charities do it. The public clearly do sign up to donate, but let’s hope that
the new system doesn’t stifle this form of fundraising, because in the current economic climate, charities need
all the money they can get.

Ditching extra insurance premiums for volunteer drivers was long overdue

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There was a certain amount of backslapping this week when
the Association of British Insurers announced that 54 insurance brands would
no longer be charging extra premiums for people who use their cars for
voluntary activities, such as taking people to hospital or on days out.

The insurance companies presented it as an act of generosity
– of giving something back – and the Minister for Civil Society, Nick Hurd,
claimed it as an early win for Lord Hodgson’s recent report on cutting red tape
in the sector. The report pointed out earlier this year that the extra premiums
put people off volunteering.

I’d like to be impressed, but I’m not. Why did some
insurance companies ever charge extra premiums for volunteer driving in the
first place? Their argument that it wasn’t normal social use was surely
untenable: you could hardly have a better definition of what is ‘social’ than
people doing things for others in their community.

It’s tempting to think this was just another of those little
sleights of hand – those nice little earners – for which this industry is well
known. Having said that, it’s a reasonable surmise that their readiness to make
this concession indicates that in practice it may not have been much of an
earner at all.

It’s surely likely that a lot of people – justifiably
assuming that they were covered by a normal policy – were just doing volunteer
driving without telling their insurance companies. Hodgson’s report also
indicated that the premiums often caused arguments, and the companies may have
felt any extra revenue was not worth the hassle.

Nonetheless, it’s good news. It would be welcome to get similar
progress on another recommendation of the red tape report – a code of practice
for the insurance industry on health and safety for businesses and the
voluntary sector. This is intended to address the concern that charities
operating in “low hazard environments’, as the report puts it, are required by
insurers to employ consultants to carry out full – and expensive – health
and safety risk assessments. 
Progress on this one might take a little longer.