The Intelligent Giving Blog

On the meaning of ‘problem’, and why we rock (in general)

Adam Rothwell — Fri, 03 Oct 2008 15:13:44 +0100

Today is a time of celebration at Intelligent Giving HQ. We’ve just published a new version of our charity-rating guide. And last night, we won the office pub quiz. A double whammy. We’re rather pleased with ourselves.

First, the charity-rating guide. This (secret) document – known to us as the ‘CHRIS Guide’ for entirely baffling reasons – sets out in excruciating detail what we mean by each of our 43 charity-ranking criteria, and gives the rationale for our Quality of Reporting scores.

It’s a long, boring read. But it lies at the heart of everything we do, and its rulings are law. This new version, which illuminates some dark corners left unexplored in the previous one, tightens up what we mean by “outcome”, “problem”, “future income streams”, and “trustee remuneration”, amongst other things. And this should mean that our Quality of Reporting scores are even more accurate in future than they are now.

By the way, if you’re wondering why we keep the Guide secret, it’s because we can’t afford to get into arguments with charities over the intricacies of the scores we award – we just don't have the time. But the Charity Commission has seen the Guide, and has approved it as an ‘objective’ means of assessing charities’ transparency. Which I hope counts for something.

On top of this milestone, our victory at the pub quiz was also a major cause for celebration – especially considering that we usually come last. For the victory, our wonderful interns – Federica, Leo, and Heather – must take a substantial share of the credit. But I was worried that my colleague Sarah knew the answer was "Adam Rickitt" in the Name That Face round. Surely the sign of a mis-spent youth?

The new Register of Charities: why you should be excited

Adam Rothwell — Thu, 02 Oct 2008 09:56:14 +0100

The Charity Commission has a reputation for being boring. Generally, it deserves it – and it should be proud of the fact. But with the launch of the new online Register of Charities yesterday, the Commission did something very exciting indeed.

Almost all charities in England and Wales have an entry on the register. It’s the law (even we have a presence there), and every year tens of thousands of charities have to update the Register with details of their work.

Until yesterday, the Register was a drab affair, giving a basic overview of charities’ financial situation and a link to charities’ annual reports. But now, everything has changed.

The new Register provides a fantastic way to get a quick overview of any charity’s finances. It gives pie-charts and bar-graphs breaking down what the charity earns, how it earns it, and what it spends it on. It also gives a clear picture of the charity’s investments.

Never before has it been so easy to compare charities’ financial performance, and in this respect the Register is revolutionary. It also throws up a few surprises. Take the Wellcome Trust, for example.

The Wellcome is England’s biggest charity. According to the top-line statistics, it spent £600m in 2006/7, and raised £320m in the same period, mostly from its £16bn endowment. This sounds impressive enough. But the new Register makes clear that those statistics are misleading. Because in addition to the £320m it classified as ‘income’, the Wellcome also ~~pocketed~~ raised almost £2bn (yes, billion) in ~~interest~~ gains on its investments.

That makes Wellcome look much less charitable than at first glance: it only spent 23 per cent of the money available to it in 2006/7 on charitable work.

There might be good reasons for that. The new Register will make charities like Wellcome work harder to explain what those reasons are. And if that happens, it will be a wonderful achievement.

Why do people give to charity?

Adam Rothwell — Thu, 02 Oct 2008 08:53:50 +0100

Charity fundraisers are convinced they know the answer to this question. People give, they think, because they’re asked, because they feel guilty that they’re not giving, or – sometimes – because they want to make the world a better place, usually by supporting a cause close to their hearts.

But ask the same question of professional charity researchers, and they’ll give you an entirely different answer. In fact, they’ll probably say that there is no answer. Why do people give? “Search me,” they’ll say.

This difference of opinion was rammed home last night at the launch of the ESRC Research Centre for Charitable Giving and Philanthropy, at City University, London. In a packed lecture-theatre, the charity world’s philosophers gathered to stroke their beards and wonder why people would ever do something so odd as give away their cash.

There was consternation all round. How did tax incentives affect giving, the participants wondered? Were transparent and accountable charities any more popular than un-transparent ones? Was there any link between tax levels, government action, and amounts donated?

Nobody knew – which was, frankly, good news for those researchers about to be employed by the Centre. But I was more than a little surprised by this reaction. I spend a fair amount of time talking to professional fundraisers, and – without exception – each of them thinks they know what motivates people to give.

Both sides cannot be right. Either we do know why people give, or we don’t. So who’s wrong? Are fundraisers being myopic? Or should those academics climb down from their ivory towers, and spend some time raising cash instead?

Is it possible to compare charities’ performance?

Adam Rothwell — Mon, 29 Sep 2008 10:12:00 +0100

The most difficult question in the charity world is also its most important: how can you tell if a charity is any good?

At the moment, nobody has a solid answer. At IG, we say that transparent charities deserve your cash more than secretive ones – but we can’t tell you which transparent organization you should give to. New Philanthropy Capital, a whizzy research outfit, supplements office-based analysis with site visits and then makes specific charity recommendations. But it would never do anything so crude as to give a score of charities’ effectiveness.

This is a big problem. Until it’s possible to compare charities directly – probably by giving them an effectiveness score – deciding which cause most needs your support will be next-to impossible. If you want to put your donation where it will have the greatest impact, you ultimately just have to guess.

This unsatisfactory situation has led to the development of a cottage industry which tries to assess the impact charities make. Last week saw the latest effectiveness tool emerge: the Portfolio Data Management System (PDMS), backed by the Clinton Global Initiative, and given positive write-ups in the New York Times and Business Week.

PDMS is doubtless a worthy initiative. In fundamental terms, the analysis it’s based on looks sound. But its most intriguing promise – that it will assess how many people’s lives have been affected by a charity – looks extremely hard to fulfil. According to the PDMS website, “we [will] opportunistically partner with world-class research organizations to conduct in-depth research to better understand the social impact of select investments.” Hmm. That doesn’t explain much.

Measuring impact is exceedingly hard, which explains the PDMS’s reticence. But it’s still galling to find that even the massed resources of Bill Clinton, the Skoll Foundation and Google.org can’t come up with a convincing answer to the question of how to compare charities.

Does anyone have any better ideas?

Thanks to the Charity Navigator Blog for getting me to read the NY Times.

GlobalGiving lets you give direct to people in need

Adam Rothwell — Fri, 26 Sep 2008 13:17:22 +0100

If you want to give to a good cause but don’t trust charities to spend your money well, there is now a solution: GlobalGiving. This website, which launched in the UK last week, lets you give direct to projects in poor countries around the world. And I think it’s brilliant.

GlobalGiving does what most charities are extremely reluctant to do: it gives donors the power to pick their favourite projects from its website, and support them – and them alone – with ring-fenced donations.

That means donors can develop a real, personal connection with the good work they’re funding – and it gives the people running the projects an extra incentive to get things right. Donors get regular email updates from the field, so there needs to be evidence that the projects are actually making progress.

But that’s just a part of it. These are the other reasons why I think GlobalGiving deserves to succeed:

It’s extremely transparent. Traditional charity fundraisers often have two conflicting goals: to raise as much ‘unrestricted’ cash as possible (which the charity can spend how it likes); and to tell potential donors a compelling story. Fundraisers’ stories typically say something like, “Give us a £10, and you could give Janet back her sight.” But, because charities desperately want unrestricted cash, your donation – motivated by the tear-jerking story of Janet – will almost certainly go straight into the charity’s general bank account. It won’t necessarily go near poor old Janet. But if a project on GlobalGiving says “Give us £10, and we’ll spend it on supplying a village with clean water,” you can be sure that’s what it will be spent on.
It helps charities communicate with their supporters. A lot of charities don’t know how to talk to their donors online. But if charities put their projects up on GlobalGiving, then they can use the site’s technology to send out update emails and to ask for feedback.
Using the site can be really educational. When I went to talk to Sharath, the boss of GlobalGiving UK, he told me that the site is used by American schools to teach how complex issues like poverty really are. If it takes off, surely there’s no reason for the same thing not to happen here?
It’s properly regulated. If you give to a GlobalGiving project, your donation gets funnelled through GlobalGiving’s bank account. GlobalGiving is itself a UK charity, which means that any money passing through its hands has to abide by the Charity Commission’s strict ethical rules.

GlobalGiving takes 10 per cent of all donations it receives to cover its costs. But I think that’s a small price to pay for such an excellent service.

Have hospital charities finally found a role?

Adam Rothwell — Thu, 25 Sep 2008 10:33:24 +0100

We’ve long felt ambivalent about the role of charities which serve the NHS. Although almost every hospital seems to have a charitable fund associated with it, the way these operate – paying for bits of hospital equipment, for example – has often left us feeling uneasy. But all that might be about to change.

That’s because health-care rationing looks set for a comeback. As drugs become more expensive, the NHS is increasingly refusing to buy them – with patients apparently being given the option to fork out the extra cash themselves, if they can afford it.

And that’s where the charities could come in. As I understand it, much hospital-charity money currently gets spent on medical equipment that the NHS has a duty to provide anyway. That doesn’t seem quite right. But if the NHS draws a clear distinction between what drugs it will and won’t pay for, the charities could start paying for them instead.

This might not happen. But I think it should. Surely there’s no reason why not?

Thanks to Dan Fletcher for getting me thinking about this.

Transparency: the Freemasons show the way. Sort of

Adam Rothwell — Tue, 23 Sep 2008 13:24:39 +0100

One of the things we look for in the charities we profile is whether they provide easy answers to common questions about their work. Sadly, most charities don't do this – the FAQ sections on their websites too often concentrate on ‘key fundraising messages’ and other such fluff.

But I recently found one organization which provides answers to these questions, and with grace: the Freemasons.

I’m not joking. As I pootled around Freemasons’ Hall last weekend (as part of the brilliant London Open House event), I found came across a booklet, called ‘Freemasonry: Your Questions Answered.’ I didn’t have high hopes of its contents, but I picked it up nonetheless. And I was pleasantly surprised.

In question-and-answer format, it addresses almost all the questions I had about the Masons: why they roll up their trousers; why they enact weird-looking rituals; and whether Masons are supposed to favour each other in the workplace. The answers didn’t dodge the important issues, and given the constraint that non-Masons aren’t allowed to know precisely what unfolds at Masonic rituals, it was admirably clear.

Compared to many charities – which have a legal and moral duty to be transparent – this secretive society was, in my mind, doing a pretty good job explaining itself in an accessible format. So why don’t all charities – like Oxfam already does – do something similar?

Adam is definitely not a Mason.

The NSPCC releases an awful new advert

Adam Rothwell — Tue, 23 Sep 2008 11:33:00 +0100

The NSPCC is known for its extraordinary commitment to telly advertisements. Usually, it likes to indulge in harrowing depictions of beaten-up children, accompanied by menacing voiceovers, to squeeze money out of the unsuspecting viewing public.

But yesterday it embarked on a new enterprise. In its latest ad*, the NSPCC tries to charm its audience with a depiction of ear-shaped butterflies flitting their way amongst happy-looking children. Eventually, one of the earflies (is that the right word?) finds a sad-looking kid and tries to make friends. But it can’t.

In case you don’t get it (and I certainly didn’t the first time around) I should explain the point of this odd video. The strap-line is “let no cry go unheard,” and it seems as if the charity is trying to raise cash to help it listen more thoroughly to children’s problems.

This is an extremely worthy cause, and there is no doubt whatsoever that the NSPCC does amazing work in this field. But the advert sends me round the bend. It gives no indication of what donors’ cash will really be used for; it doesn’t explain how the charity will measure the success of its campaign; and it doesn’t even say why there is a need for more funding in this field.

In other words, this effort epitomizes everything that is bad in the world of charity advertising.

Nonetheless, the ad will doubtless rake in the hoped-for millions. But I find it sad that such a well-known charity feels it’s OK to use such superficial silliness to keep itself going.

* The NSPCC won’t let me (or anyone else) embed the video of the ad on this page.

New and updated charity profiles

Sarah Hedley — Mon, 22 Sep 2008 11:22:44 +0100

Two giants of the charity world have recently released new annual reports, and we’ve been quick to take a look. Cancer Research UK (see profile) – the country’s biggest charity and historically our top performer – has fallen from first place. It still earns an enviable 88% for its impressive annual report – but why has it stopped telling us about risks the charity faces over the coming years?

Similarly gargantuan both in terms of its size and Quality of Reporting score is the National Trust (see profile) which has been experimenting this year with an online version of its annual report. Once again, this champion of the country's heritage remains one of the most transparent charities on our books with its new report earning a Quality of Reporting score of 89%.

Two new and much smaller charities we have profiled for the first time this year are Feed My People ( see profile) and Muslim Hands (see profile). Both are international humanitarian charities with religious motivations for their work, but neither charity’s annual report was anything to write home about.

Feed My People’s below-par production scored 62% for Quality of Reporting. But it fared significantly better than Muslim Hands which scored a mere 42%. Its brief report does little to inspire confidence in the charity’s organization, and misses out basic information on the charity’s finances and future plans.

Another new charity we’ve profiled recently is the Royal Masonic Benevolent Institution (see profile), an outfit that runs 17 care homes for elderly Freemasons, which scored 62% for a rather humdrum report. The transparency score of Friends of the Elderly (see profile), which also run care homes, took a tumble this year, and its sound (if unexciting) report would have benefitted from more financial commentary.

But it was good to see Nightingale House (see profile) remains Top Ranked for the second year running. This luxurious Jewish care home, whose lavish facilities once led Ian Hislop to joke that he was considering converting to Judaism in his old age, clearly pays equal attention to its annual report.

NCH re-brands as Action for Children, and gets it wrong

Adam Rothwell — Thu, 18 Sep 2008 11:36:26 +0100

NCH has long been beset by confusion over its name. It’s flip-flopped from ‘NCH’ to ‘NCH Action for Children,’ to ‘NCH the children’s charity’ and now, finally, to plain-old Action for Children. The ‘NCH’ – which stood for ‘National Children’s Home’ – has been dropped.

That’s sensible, because it doesn’t run children’s homes any more. But the rest of the charity’s re-brand – which includes a new logo and communications strategy – is looking increasingly ill-conceived.

Take a look at the charity’s Brand Guidelines, and then a Guardian article written by its boss, Claire Tickell, and you’ll soon see why. Where the guide talks about how the charity must put children at the heart of everything it does, Tickell writes that her paymasters in local government (who provide the bulk of NCH’s funding) are of “paramount importance” to the charity.

That is an astonishing admission – and it’s one that undermines every aspect of the re-brand Tickell has overseen. The new brand is supposed to be ‘optimistic’ and child-centred. Tickell instead reveals that the re-branding was motivated in part by fear of what might happen if she did nothing (“it’s a matter of survival”), and in part to build better relationships with her funders. The idea that ‘Children are at the centre of everything we do’ – the central plank of the new brand – is absent.

Yet Tickell’s howlers go on. Where the brand guide stipulates that the charity’s communications should be written for an 11-year-old to understand, for instance, Tickell indulges in a snooze-inducing discourse on the travails of “transforming an organization from the inside out.”

This yawning mismatch between rhetoric and reality should worry NCH’s supporters, for two reasons:

If the boss can’t be bothered to live by the rules, why should anyone else? Tickell’s article shows an alarming disregard for the principles of the re-brand she’s overseen. And if she doesn’t take such expensive branding seriously, why should any other of the charity’s employees? And if they don't take it seriously, then the re-brand will have been a waste of time.
If NCH’s PR department were willing to sign off that article, they must have been asleep. If a charity is going to run a successful rebrand, it needs to get its PR right. The fact that NCH’s PR operatives let this article be printed suggests they weren’t paying attention at a critical time.

Finally, NCH has refused to say how much the re-brand cost. So, not only has the re-brand gone wrong already, but the charity doesn’t trust its supporters enough to reveal this crucial piece of financial information. That’s dreadful behaviour. Let’s hope, for the children’s sake, that Action for Children gets its act together soon.