February 7, 2022 - 4:45pm
Every so often, a story comes along which puts the status of charities in the spotlight. Could the Captain Tom Foundation be the next?
According to the charity’s records, it received more than £1 million in donations last year. Yet it seems to have so far only doled out four grants of £40,000 apiece.
Yet that is not the extent of its spending. While the Foundation is sitting on £600,000 in reserves, it has thus far managed to spend over £160,000 — as much as its combined grants to date put together – on ‘management’.
They have also spent almost £210,000 on fundraising and £160,000 on ‘outreach projects’. Yet the total amount listed for ‘costs of generating voluntary income’ is just £31,204.
Of course, raising funds probably wasn’t difficult given the enormous publicity and public goodwill towards Sir Tom, so that low cost makes some sense. But it raises the question: was it really efficient or effective to divert all that charitable giving into a new foundation, which has consumed so much of it in costs, instead of simply sending it directly towards charities in need?
Given that it has so far only disbursed £160,000 — and spent far more than that on its own activities — how long will it take the Captain Tom Foundation to actually generate more money for frontline charities than it has diverted? Especially as Sir Tom’s name begins, inevitably, to carry less pull as time passes.
And like any institution, once established and staffed, the charity will have an institutional imperative to keep itself going, consuming more funds in the process. Hence that extraordinary ‘fundraising’ figure.
What could explain those extraordinary management costs? It isn’t regulation; ‘governance costs’ are listed separately, coming in at just over £32,000. Perhaps it reflects inexperience on the part of the management team. Or, a cynic might suggest, simply a way for the organisation to provide a very comfortable living to those who run it, regardless of its ‘non-profit’ status.
Whatever the reality in this case, the figures speak to a deeper truth about the charitable sector, which is that it regularly squanders money meant for good causes.
Even without malfeasance, lots of small charities inflate the share of donations diverted to management and other costs. They also enjoy a favourable public perception which often impedes proper scrutiny, as the now infamous debacle over Kids Company demonstrated back in 2015.
What can be done? Any Government intervention would need to be made with care — the last thing we need is the State smothering yet more civil society institutions, and the best charities do great work.
Perhaps the solution should be, to borrow a military term, to set a minimum ‘tooth to tail’ requirement for charitable status. In other words, the share of funds going to front-line work versus other costs. This would go some way to ensuring that when a well-meaning member of the public hands their money over, the bulk of it ends up where it was meant to go.
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SubscribeThe West seems to have produced a breed of people who hide behind charitable works while siphoning off resources, usually in the form of high salaries, to themselves. In order to justify their positions they continue to devise policies and procedures to keep the working class busy and downtrodden. They are prolific in entertainment, news media, charities, NGOs, and education. They use woke moralism to scare and silence those who threaten their power.
you’re not wrong.
They’re not uncommon in the myriad layers of government either. Sinecures throughout.
I had a quick browse through the report and I have to say that I’m not clear what the foundation does other than act as kind of Charity middle man. Taking in donations, taking a cut themselves for running costs, then passing those funds on to charities that actually deliver services. You could say they’re trading off the Captain Tom name to get donations that wouldn’t have been given otherwise but the whole thing comes across as slightly unsavoury to me.
P.S. I do understand that Foundations have a legitimate role to play in the charity sector. I just don’t see what the specific need for this foundation is. Why is it better to donate to them, rather than just encouraging direct donations to its chosen charities in Sir Tom’s name?
It’s a typical example of the lack of oversight which results in massive duplication . There are for example over 300 cancer charities. Why. Because well meaning but uniformed people keep setting them up which simply leads to unnecessary and wasteful duplication of effort.
To charities, add most public sector bodies, whose main or sole purpose is to generate huge salaries, expenses and pensions for the staff that work for them. Universities – – the enormous salaries paid to vice-chancellors; Councils – one hears of salaries of UKP 600,000, to which should be added all the expenses (travelling to work, “official” engagements, etc.) – Education – the list goes on. The Pigs have their noses in the trough. Of course, they all believe they’re worth every penny. They would. Thank you Gordon Brown.
A good example of what an utter disgrace many charities are.
They should be required to state upfront what percentage of donations is spent on raising donations and on salaries for themselves. There are so called charities that donate almost nothing and instead trouser the money for the staff. A Guide Dogs For The Blind dog apparently costs £14,000 a year, for example. Presumably that’s £1,000 to buy the dog, £1,000 to train the dog, and £118,000 for leftist staff salaries.
From a googled footnote to a TV prog about that very topic – looks to be about 5k pa if the dog lives 10 years. Not too bad given that my own (very) non-guiding hound used to cost me about €1500 a year to feed and maintain. Of course if you throw in my own (leftist? Not sure) salary that would bump it up a bit. The charity’s own cost here looks to be about £1300 pa, not excessive. There are better examples of charity capture to pick I suggest.
How much does it cost to support a guide dog from birth to retirement?
It costs about £50,000.
How is that money spent?
Breeding a guide dog puppy – £3,100
Puppy walking – £5,100
Early training – £14,500
Advanced training – £11,200
Partnership training – £3,000
Supporting a partnership – £13,200
Which doesn’t stack up, of course.
GDFTBA takes in about £114 million a year, of which by its own estimate £70 million is not spent on providing guide dogs. £36 million goes on fundraising, £10 million is on “advocacy and awareness” and £10 million is a cash surplus they don’t manage to spend. The first two of those are quite clearly likely to consist largely of payroll: sales and PR.
The cost of raising funds is fairly consistent across large charities, but if you apportion GDFTBA’s net revenue after fundraising cost across the 4,800 guide dogs out there, it comes to £14,000 per dog per year, which is a long way from £50,000 per dog per lifetime. The latter does not include any of the overhead that is their real main business, and where over 60% of the money is spent. For GDFTBA to say their principal activity is guide dogs is a bit like a restaurant saying its principal activity is washing dishes.
You are right that GDFTBA may well not be the worst offender. There are charities whose “fundraising costs” are 90 to 100% of their revenues. I have held GDFTBA in low regard ever since someone I knew offered me a free roll of brand new white carpet. He was an office fitter and the white carpet had been fitted in the office of some GDFTBA honch, who instantly decided he didn’t like it and had it taken up, thrown and replaced. In 2020 they spent £4.7 million refurbishing premises, so I suspect this habit lives on.
In some cases, staff costs are the delivery of the charitable aim, such as educational charities. But in many cases they are not, and the donating public would benefit from clarity. Charities need to be assigned some sort of prominent efficiency rating, whereby one that spends 90% or more of its revenues directly on its charitable aim is graded A, and one that spends 10% or less is graded U. At some cutoff point in between, the ability to reclaim tax should taper off to zero. For charities whose charitable aim is any form of political lobbying, tax relief should not apply at all.
On such a basis, GDFTBA might still come out quite well – but we just don’t know, do we?
In my world of IT sales, the Charities are a cracking market sector….Same with Government just before year end (surplus, spend it or lose it) and start of new year…
And this is why I don’t donate money to charities! I’ll give clothes to charity shops but that is as far as I go. Too many people milking human kindness.
Instead of giving up on giving, how about looking for charities which do spend money effectively. Try the website of GiveWell, which exists to do exactly that: identity those charities which are doing the most good with the money people give them
Some years ago I read a study which suggested that it is not misguided to give cash to the homeless. If you give £10 to a rough sleeper all £10 goes to the rough sleeper; if you give it to Shelter none of it goes to providing housing for anybody at all.
Apparently, what most homeless people need to get off the streets is about £800. If you give them that they can obtain shelter, suitable clothing, and can get back into work. You could give £8,000 to a homeless charity instead, but you wouldn’t be helping any more homeless people.
Unfortunately, many homeless people would spend the £800 unwisely. Even a £10 donation would often go on the wrong thing. Most homeless need help and assistance. There are some admirable charities for the homeless, but there are many where money is seriously abused. I speak from experience as I have volunteered for both over the years and seen it first hand.
This could be easily solved by making all expenditure transparent. For example there are now many accounting packages which enable one to ‘drill’ down on the numbers. That can take you right down to the original invoice or receipt.
Dream on.
Agreed. Transparency is key and it would be simple to implement that use of a publicly accessible online accounting package is a condition of tax exemption for a charity. It would make up for the failure of the charity commissioners to make substantive checks. So a dream worth pushing, especially with the expansion of online contributions given in hope and ignorance.
Why should anyone be surprised by this. The Voluntary sector is a mess and a muddle. The Charity Commission is no longer fit for purpose given the way the sector has developed over the last 30 years. Most of the sector income is hoovered up by a relatively small number of large organisations with incomes measured in millions. Sometimes hundreds of millions. Yet the same oversight structure is applied that deals with tiny local groups such as scouts and guides, golf clubs etc. There is no equivalent of say Ofsted,CQC, HM Insp. of Constabulary etc. If you want info. on any large charity all that’s available is what they want to tell you. Annual Accounts are available but they don’t tell the full story. There is nothing that independently assesses the efficiency and efficacy of the organisation. You mention Kids Club – a classic example of what is simply waiting to happen. The public are generally very naive about how this sector operates and is far too trusting. I worked within it for 28 years. It badly needs reform.
Interesting to discover that ” Captain Tom” apparently spent the war in India mending motorcycles , and that the myth built up around him was a sham…
I’m about to start working for a charity and the salary is a pittance; maybe it’s one of the good ones.
Depending on the work being done, and if top quality volunteers are not available, charities should pay the going rate. It is when charities are knowingly paying inflated salaries that there’s a problem, and that is usually only to senior management. There are lots of great charities around so hopefully yours is one of those.
Who are these ‘trustees’? How about some names?
Look at the accounts, the names of the Trustees are on them. Charities are required to state how much of their expenditure is salaries and how many individuals are paid more than £60k per year.
Not my point
Charity accounts are compiled in accordance with the Statement of Recommended Practice (SORP) and the format is often less than clear.
The Charity is clearly in a start up stage and is planning to position itself as a significant fund-raiser and supporter of projects and organisations related to health. Of the £160,000 you identify as management nearly £130,000 of that is what, one presumes is a one-off cost of a fund-raising consultancy, this is quite clear from the notes and from the Trustee’s annual report. Its performance will be better evaluated after a couple more years when we will be able to see how well its investment in fund-raising has worked out.