Threat of fraud Philanthropic giving Good investments UK charities fall victim to What are the trends in the Research on how charities invest £1.65bn worth of fraud a year philanthropy of the super-wealthy? and choose their investments
June/July 2014 l www.charitytimes.com
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Charity Times_204x271_1.indd 1 27/6/14 13:51:16 EDITORIAL COMMENT
Editor Andrew Holt [email protected] Charities and trust 020 7562 2411
Contributing Writers Rob Barr, Stephen Bubb, Nicola Davies, Rhodri Trust in a charity is everything. Once lost it is never re- Davies, Joe Lepper, Maurice Mcleod, Daiga Kam- gained. Support, including donations, inevitably collapse. erade, Paul Palmer, Cathy Pharoah, Harry Pope, Two recent reports give a very different picture on where David Pritchard, David Rowe, Antony Savvas, the sector is as far as public support is concerned. Steve Wyler, Trust in charities remains high according to research Design & Production conducted for the Charity Commission. Charities received Matleena Lilja a trust score of 6.7 out of 10 overall, in line with previous [email protected] research findings, showing that public trust and confi- 020 7562 2400 dence in charities is resilient. Commercial Manager However, the research indicates a shift in public opinion in certain areas. Cerys Brafield People are now attaching greater importance to good financial management [email protected] by charities. Almost half of people cite “ensuring a reasonable proportion of 07766 662 610 donations gets to the end cause” as the most important factor affecting their Advertising Manager trust in charities and the importance of this has risen since the last research in Sam Ridley 2012. [email protected] 020 7562 4386 As William Shawcross, chairman of the Charity Commission, noted: “It is no longer good enough to say that your charity makes a positive difference — the Subscriptions public wants to know that you are making the best possible impact, and that a Joel Whitefoot reasonable proportion of donations is getting to the end cause.” [email protected] 020 8950 9117 The second survey on trust presents a less than positive picture: stating public trust in charities has fallen by 10 percentage points in the last year. Subscription Rates (6 issues pa) Charities now appear seventh in a newly published list of the most trusted £79pa registered charities £119pa rest of UK, £127pa EU institutions, coming behind the Royal Family and small businesses for the £132pa elsewhere first time. This poll, by research consultancy nfpSynergy, also shows a finance angle about concerns the public have: 60 per cent of respondents want to see Printed by Warners Midlands charities both chased to submit their accounts on time and forced to declare All rights reserved. The views expressed are not necessarily those of the publishers. how many staff are paid over £60,000. There is enough here for the sector to heed some warnings. In all areas of ISSN : 1355-4573 life, the public now expects access to more and more accessible data. CEOS, Published by finance directors and trustees need to respond to this. They need to ask Perspective Publishing, 6th Floor, themselves: “What do donors, beneficiaries and partners expect to know about 3 London Wall Buildings, London EC2M 5PD our work?” www.perspectivepublishing.com Charities sometimes fear that revealing too much exposes them to risk. For example, the information may be misinterpreted or misused. One only has to Managing Director look at the CEO salary debacle of last year to see how this can happen. But John Woods greater transparency and openness can prevent this from happening. It can, Publishing Director and will, lead to a greater trust from a public that begins to fully understand Mark Evans how charities work. And the positive knock-on impact of this should be obvious to all charities.
Andrew Holt, Editor
Average net circulation of 9,426 copies for July 12 – June 13
www.charitytimes.com 03 NOT YOUR NORMAL CUSTOMERS NOT YOUR NORMAL BANK First class loans from start to fi nish
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015083A1_CAF_Bank_Charity Times (American)_271x204.indd 1 17/06/2014 15:11 CONTENTS
34
Features
DIGITAL FUNDRAISING 32 Under control 27 Rob Barr looks at how charities can gain greater control with fundraising COVER STORY:DIGITAL FUNDRAISING technology Digital fundraising is perceived by many as a growing opportunity for the third sector. How does it to take full advantage, asks Antony Savvas Sponsored by:
The Review Columns Charity fraud 12 Philanthropic Journeys 16 Leadership 34 Threat of fraud Reviewed by Daiga Kamerade Steve Wyler on vision UK charities fall victim to £1.65bn worth of fraud a year. Joe Lepper finds the sector 13 Call to Action for the 17 Civil society still has much to do to tackle this number Common Good John Low on philanthropic giving Reviewed by Rhodri Davies philanthropy 18 Research 38 Over the rainbow? 14 Mammon’s Kingdom David Pritchard on evaluation Cathy Pharoah presents new data assess- Reviewed by Andrew Holt ing what trends in the philanthropy of the 19 Charity campaigning UK’s super-wealthy say about the future 15 Money Mania Stephen Bubb on the Oxfam In association with: Reviewed by Paul Palmer campaign
Analysis Charity Services
10 Political narratives 55 Suppliers Directory Investment analysis Asheem Singh analyses the Comprehensive listings of products 44 Good investments Moderniser’s Manifesto and services for the sector Andrew Holt analyses Charity Times research that shows charity investments are of a broad asset allocation, long-term, with a movement towards future change www.charitytimes.com 05 NEWS IN BRIEF
A new welfare package should With changes afoot throughout be offered to young people in an the pensions industry, there is a need attempt to slash youth unemployment, for better education for employers and according to a report published by members of pension schemes, according a leading think-tank. The Centre for to The Pensions Trust, one of the leading Social Justice wants politicians to make workplace pension funds in the UK for the a commitment that tackling youth third sector. The Pensions Trust questioned unemployment will be a ‘moral mission’ 500 members and employers on their key in the next Parliament and calls for a fresh pension concerns, with confusion around relationship between young people and options in the lead up to retirement as the State. well as options in retirement prevailing as a main theme. The poll found many Almost a third of young people A coalition of organisations has members were unclear as to whether (31%) give up their time for charity teamed up to launch new online they could stop working before they each month as a supporter or volunteer, technology, which will be available for reach 65, and still draw their pension, according to new research from youth free to all charities in the UK. Think-tank as well as confusion around their options insights consultancy Voxburner NPC has joined with Charities Evaluation if they decide to continue working into the relationship between 16-24s Services and leading social research past 65 years of age. Similarly, members and charities or campaigns. 77% of collective Substance to design two were troubled as to their options when it 16-24s give less than £5 per month to innovative tools, which will help charities comes to drawing both a private and charity - one third (33%) give nothing, focus on measuring what they do and a State Pension, with some questioning whilst 44% give up to £5. There are more think more about their overall impact on whether they are still eligible to draw a young people paying for a Netflix the people they support. The organisations State Pension if they draw from a private subscription than there are donating involved estimate that using the tools pension. over £5 to charity — Voxburner’s could save the charity sector as a whole Buying Digital Content report found more than £15m. The first: ‘Measuring Up’, that 34% of young people have used will help charities find out how well they paid-for movie streaming service are assessing the impact of their work on Netflix in the last month in contrast the people they support. The second, the to 23% of donate over £5 to charity ‘Impact Hub’, will gather in one place the each month. resources charities need to measure what they do. In contradiction to another survey (see below), trust in charities remains high The public’s trust in charities has according to independent research by fallen by 10 percentage points in the last Ipsos MORI conducted on behalf of the year, new research suggests. They now The postcode lottery of diabetes Charity Commission. Charities received appear seventh in a newly published list healthcare is now so great that people a trust score of 6.7 out of 10 overall, in of the most trusted institutions, coming with the condition are four times more line with previous research findings, behind the Royal Family and small likely to get vital annual checks if they showing that public trust and confidence businesses for the first time. The research live in the best performing area in in charities is resilient. Only the police also reveals what people say charities can England than if they live in the worst, (7) and doctors (7.6) are trusted more do to reassure them, including reviewing according to a new online tool. than charities. However, the research costs annually and regulation by the The data on Diabetes UK’s Diabetes indicates a shift in public opinion in Charity Commission. The poll, carried Watch, which enables people with certain areas. People are now attaching out by research consultancy nfpSynergy, diabetes to compare care in their area greater importance to good financial shows that 56% of people now trust with care around the country, shows management by charities. Almost half charities ‘quite a lot’ or ‘a great deal, a that just 18.5 per cent of people with of people cite ‘ensuring a reasonable significant fall from last year and the the condition in Mid-Essex get the eight proportion of donations gets to the sector’s second lowest figure since 2007. annual checks recommended by the end cause’ as the most important factor The Scouts and Guides continue their high National Institute for Health and Care affecting their trust in charities and the levels of trust with 64%, while The Armed Excellence. It is one of 27 areas in England importance of this has risen since the last Forces continue to top the poll, despite where less than half of people with research in 2012. a drop of 8%. diabetes receive these checks.
06 www.charitytimes.com NEWS IN BRIEF
Charities are in a unique position The Government announced to influence the way Social Impact a multi-million pound package of finance Bonds (SIBs) are developed and used to boost the social investment market as in the future, according to a new paper it sets outs its strategy to grow the sector. published today by charity think-tank In its 2014 progress report, the Cabinet NPC. NPC argues that providers remain Office reflects on the huge strides made in positive about the potential of SIBs to the market over the past 3 years, including: deliver strong outcomes for beneficiaries, the introduction of the world’s first tax even after recent poor publicity. The paper, relief for social investment; the creation Opportunities and lessons, draws on of Big Society Capital (the £600m social a recent roundtable meeting with investment bank) and significant growth experts in the field, convened by NPC in the number of social enterprises, which and including several charities currently Government figures published now employ more than 2m people in the delivering services within SIB contracts. showed that homelessness in London UK. The UK is now home to the world’s Opportunities and lessons argues that has risen for the fourth year running, with most advanced social investment market, charities are well placed to exploit 29,152 households approaching their local growing over 20% a year, and is seen specialist knowledge in some areas authority as homeless — a 10% increase as the global hub for social investment. of service delivery. It contends that on figures published last year. The ending The progress report sets out the most charities, while facing a number of of a private tenancy is now the leading important focus for the next year: making hurdles, should seriously consider cause of homelessness in London – up it easier for people to become social working alone or in coalition to develop 29% on last year. The annual figures from investors, as well as helping organisations their own SIB proposals, and direct the Department for Communities and to access this type of funding. government policy towards delivering Local Government show that in London in more effective interventions on behalf 2013/14: 15,187 households were accepted of beneficiaries. as homeless and a priority for housing in 2013/14 — an increase of 3% compared The Charity Commission has to the previous year; 11,540 homeless announced that it has opened a statutory households were accommodated outside inquiry into Life Foundation Trust, of their borough — a rise of 36%; 4,538 registered charity number 1147572. The homeless households were not considered charity, which was registered in 2012, has a priority for housing, a rise of 2% on the objects that include the promotion of previous year. education, the advancement of health and the saving of lives. Its registered Sir John Elvidge, former Permanent address is in Manchester. The regulator Secretary to the Scottish Government, The Work Programme is failing those is investigating concerns about and fellow of the Carnegie UK Trust, who need the most help to find work, the trustees’ decisions to enter into has argued that improving the wellbeing according to a new report published by agreements by the charity to occupy of UK citizens depends on a new and the think-tank IPPR North. The report says vacant commercial premises, resulting more ‘Enabling’ State approach being the Work Programme is generally working in the charity becoming potentially adopted by our Government. To do for mainstream jobseekers, but is not liable for the payment of significant that, government needs to stop being a working for people with health conditions. business rates. The inquiry will examine barrier to the empowerment of people. The report shows that over a quarter of a whether the trustees have properly The finding is one of several key actions million people with health conditions have discharged their legal duties including outlined in a new report A route map to an joined the Work Programme, but only 1 in timely filing of the charity’s annual Enabling State, produced by Sir John on 20 of them have found work, compared accounts and returns and whether, behalf of philanthropic organisation, the to 1 in 5 mainstream jobhunters. Only 1 in and to what extent, there was Carnegie UK Trust. It marks the culmination 25 people with a mental and behavioural mismanagement or misconduct in of an 18 month research project to disorder have gone on to find work, the administration and management produce the most comprehensive despite this being the most common of the charity on the part of the trustees. contemporary review of public policy health condition for people on the The charity is currently in liquidation. reform from around the UK and Ireland programme. The new report is the latest The Commission’s inquiry was opened on the topic of the nature and role of in a series from IPPR’s flagship Condition of on 3 June 2014. government. Britain project on social policy. www.charitytimes.com 07 NEWS IN BRIEF
The Financial Promotion Regime — the legislative and regulatory framework Britons fear the country is becoming ever more materialis- which regulates the marketing of smaller- tic as the economic recovery takes hold, according to new scale investments to investors based in the UK — presents a number of ‘barriers research. 59% of Britons feel they are often too focused on both for investors and investees which risk their own lives to help others, according to a study by CAF stifling the growth of the social investment marketplace’, according to a new report published today by the Social Investment two-thirds (68%) said it was a desire comes as the British founder of a new Research Council. Marketing Social Invest- to develop their skills in a different global giving campaign — #GivingTuesday ments — An Outline of the UK Financial environment that was a key factor. — comes to the UK to officially launch the Promotion Regime, finds that at present The report, Philanthropic Journeys, day of generosity in this country. Half of the Regime largely fails to appreciate the commissioned by the charity Pilotlight British adults (48%) believe that the distinctive features of social investment, and carried out by Dr Beth Breeze from the economic situation will improve in the next where investments are often small-scale, Centre for Philanthropy at the University year, and half (48%) say that if the economy localised, involve personal associations of Kent, includes a survey of over 225 does improve, and wages increase, people and financial return is often a secondary business leaders and philanthropists should spend more money on charities as consideration. Its complexity causes uncer- across England and Scotland. The research well as themselves, according to the survey tainty and is a challenge for investors and shows that structured skills volunteering by ComRes. But the poll suggests that investees alike to understand. The report through organisations like Pilotlight, not Britons are far more likely to spend any also highlights challenges for social enter- only changes negative attitudes about extra cash on holidays, clothes and going prises, such as compliance costs, which are charities but also nearly doubles people’s out than supporting good causes, raising disproportionately high for the majority of intention to volunteer (from 32% to 63%), fears that charities will have limited social enterprises relative to the invest- significantly affects people’s desire to benefits from the economic upturn. ment amount that they seek to raise. make substantial donations worth £1,000 or more (from 29% to 41%), and leads to The Big Lottery Fund is in advanced Charity Bank recognised three of its a three-fold increase in the willingness to talks to match over £260 million of Lottery borrowers in its annual Impact Awards. serve as a charity trustee (See page 12). funding with money from Europe in a The awards were open to all current move that will open up new funding Charity Bank borrowers and comprised Sir Stephen Bubb, chief executive of opportunities for the sector, Big Lottery three categories: greatest impact, most ACEVO, the charity leaders’ network, Fund chief executive, Dawn Austwick, told innovative use of loan finance, and best criticised ministers and MPs who have delegates at the National Council for community initiative. The award winners sought to gag the campaigning activity Voluntary Organisations’ conference, were: Emmaus Brighton and Hove, winner of charities such as Oxfam and the Trussell Evolve. The move follows months of of the award for Greatest Impact. For the Trust. His comments emerge in the wake work from the NCVO, government organisation most able to demonstrate of complaints by a Conservative MP about departments and Big Lottery Fund, looking that it is achieving profound, life-enhanc- a recent Oxfam campaign entitled The at how to increase sector involvement ing and enduring change for those with Perfect Storm which claims to highlight in European funding, which historically whom they work; Folkestone Sports Centre the contemporary causes of UK poverty. has been limited. Priorities for the new Trust, winner of the award for the Most In a letter to William Shawcross, chair of seven-year, 2014-2020 round of the Innovative Use of Loan Finance. For the Charity regulator the Charity Commission European Structural and Investment Fund organisation using loan finance in the Sir Stephen argues that such campaigns (ESIF) growth programme have been most imaginative way to transform the are a crucial part of our democracy and determined locally by England’s local way it operates; Valley CIDS, winner of the the regulator must protect those historic enterprise partnerships (LEPs) — local award for the Best Community Initiative for rights (see page 19). bodies with representatives from business, its Blend Youth Project. For the organisa- skills and the voluntary sector. tion whose project demonstrates the most Britons fear the country is becoming impressive community involvement which ever more materialistic as the economic The Government must do more to is for and of the community. recovery takes hold, according to new “widen ladders of opportunity, smash glass research. And most (59%) people think ceilings and back the British underdog” A new survey reveals that while 80% Britons are often too focussed on their own says Conservative MP Dominic Raab of senior executives got involved with lives to help others, according to the study in his new pamphlet The Meritocrat’s charities to ‘give something back’, over by the Charities Aid Foundation, which Manifesto, to be published by the Social
08 www.charitytimes.com NEWS IN BRIEF
Market Foundation (SMF) think tank that a number of concerns have been Food banks and food aid charities on Wednesday. Raab outlines a radical raised about a tweet from a Scottish gave more than 20 million meals last agenda for the centre-right aimed at Charity. We are making urgent inquiries year to people in the UK who could not strengthening social fairness during a into the matter and will be seeking further afford to feed themselves — a 54 per time of austerity. Spanning schools reform, information from the charity trustees.” cent increase on the previous 12 months, vocational training, non-graduate routes according to a report published by into the professions, entrepreneurial The National Council for Volun- Oxfam, Church Action on Poverty and avenues, tax and regulatory reform, tary Organisations announced the The Trussell Trust. Below the Breadline home ownership, social enterprises and launch of a review into the future of the warns that there has been a rise in people immigration, The Meritocrat’s Manifesto voluntary sector’s finances. It will cover turning to food banks in affluent areas. sets out a range of policy proposals aimed issues including: changes in voluntary Cheltenham, Welwyn Garden City and at enabling greater meritocracy and income; future funding relationships North Lakes have seen numbers of users increasing social mobility. between government and the voluntary double and in some cases treble. The sector; the growing role of trading; the role report details how changes to the social The setting up of a Government-backed of social investment; changes in corporate security system, benefit sanctions, low financial regulator could lead to ‘potentially giving and pensions deficits. Led by NCVO, wages, zero-hours contracts and rising expensive and risky’ red tape according to the review will be directed by a steering food prices are all contributed to the a stark warning from a financial think-tank group comprised of the chief executives increasing numbers of meals handed out. report. Next April will see a new regulator of Charity Finance Group, the Institute of being introduced to oversee the UK Fundraising, and Navca. Charity fundraising regulator, the payments system, which is responsible Fundraising Standards Board for every card purchase, payment or More than half of people think (FRSB) released the UK’s annual charity bank transaction. Last year the system charities should be out spending their fundraising complaint figures, reporting processed approximately 7bn transactions, money rather than saving it, according to 48,432 complaints in 2013. The FRSB worth over £75trn. The Treasury has tasked research out today. The poll, carried out Complaints Report 2014, with data the regulator with promoting greater by research consultancy nfpSynergy, analysis by MetaMetrics, presents an competition in the retail banking sector, reveals that over a third of think charities overview of the complaints incurred by as well as ensuring that payment systems should have less than six months’ worth 1,203 charities with fundraising pro- operate in the interests of users. of expenditure in reserves. It also shows grammes that deliver £4.6 billion in that people are more likely to agree voluntary income annually. Charities made The Office of the Scottish charities need larger reserves when almost 20 billion donor contacts during Regulator (OSCR), the Scottish charity talking in months, rather than actual the year when appealing for funds across regulator, is investigating The Dignity money. The study saw British adults a variety of channels: including advertising, Project, registered charity SC027546, for asked what they thought was the lowest direct marketing, public collections, events an abusive tweet which appeared on its amount of expenditure it would be wise and more. The most complained about twitter page yesterday. In reference to for a charity to keep in reserves in case methods were addressed direct mail, author JK Rowling’s £1m donation to the income dropped. The average choice was telephone and doorstep fundraising, pro-UK campaign, the tweet read: “What 7.3 months, with 20% of people saying which together account for two thirds of a #bitch after we gave her shelter in our six months to a year and 18% saying complaints. The large majority of com- city when she was a single mum.” The four to six months. 12% were happy with plaints were logged by big charities with OSCR said in a statement: “We are aware whatever a charity decides. highly active fundraising programmes.
www.charitytimes.com 09 SECTOR POLITICAL NARRATIVES
Political narratives: Bright Blue’s Modernisers’ Manifesto
Asheem Singh says the conservatism, or in the policy analyses to the economy. It is a notable irony Moderniser’s Manifesto of many of the politicians who have that a collection that starts with a is either light or evasive contributed to the collection and who plea for clarity and brevity in the next argue relentlessly for progressive but not Conservative manifesto lasts 192 pages on values and ideology radical reform, this collection clings — or and often meanders through umpteen and therefore fails its attempts to cling — to the centre ground. chapters without any particular eye to own test for successful Conservative thought has a long history narrative or the rudiments of copy editing manifestos if not a particularly well-known one. Most or written English. historians begin with Edmund Burke, the But there are some interesting great thinker and politician who foresaw contributions that charities will no the dangers of the French Revolution and doubt take note of. Minister for Civil uch is made of the Conservatives its eventual descent into tyranny. Less Society Nick Hurd is clipped and precise Mbeing a pragmatic party. “We don’t well-known is the eloquent 20th century when he lauds the Government’s do ideology,” they say: “We see things as philosopher Michael Oakeshott, whose achievements in making the Government’s they are”. But what does this mean when distillation of Conservatism as seeking vision for society a reality. it comes to curating a programme of “present laughter” rather than future We’ve heard this from Hurd before: government, a vision for the nation? utopia is many a conservative’s lodestone. he’s a believer, sure of the Government’s Is “we don’t do ideology’”enough? There is, indeed, something distinctly course to reform public services and align This is not simply a question of social action with business and the wider philosophy or theory. These are questions economy. At ACEVO’s Gathering of Social the electorate, communities — and yes, Leaders, our sector’s flagship political charities — will answer in 2015. And so the According to the preamble, event, he argued that the Government Conservative Party and various factions the Big Society is no longer had “sown radical shoots for the next that comprise it are beginning to get their a priority. Equality should parliament.” armaments in order. One such collection be the new guiding Big claims, and Mr Hurd will be of politico-philosophical weaponry is the hoping that he gets the chance to back latest publication from young Tory think- principle his claims up. tank Bright Blue,The Modernisers’ Manifesto. Asheem Singh, ACEVO Which leads us to the Big Question. Bright Blue describe themselves as The closest the Conservatives have ‘liberal’ Conservatives. I suppose this Burkean or Oakeshottian about the come to anything approaching an means ‘liberal’ in the social sense and is Bright Blue collection. It is messy and ideological basis for their programme not a reference to the Classical economic unstructured, focused on the present with is — you guessed it — the Big Society. Liberalism of Hayek, Schumpeter or little obeisance to the future beyond the More specifically, that collection of Thatcher. Broadly speaking, their ideas are old worn political clichés about staying the movements and ideas around that interchangeable with the Orange Book course and taking part in the global race. vision; that technique for government Liberal Democrats and the Blairites of the The Bright Blue brigade will argue that this that involves less regulation, more Labour party and this tendency is evident is the point, that Conservatism, even in empowerment, more of society’s throughout. a ‘modern’ iteration, resists presenting resources being used for social good. a thorough, exhaustive view of society. Well, according to the preamble to Grass roots The Moderniser’s Manifesto, it is no This is a resolutely metropolitan collection, Purple prose longer a priority. Equality should be as far from the shire grass-roots Tories as There are hair-raising moments of the new Conservative guiding principle, one could be while still remaining in the purple prose that would make Orwell they say. Good luck getting that passed same party. Whether in the peroration of weep. “There’s smoke outside but there’s the grassroots. The more serious point journalist Matthew D’Ancona who makes a fire in the basement”reads one is that Hurd appears strangely isolated a plea for enthusiasm for Cameron’s particularly unfortunate line pertaining in this modernisers’ collection when
10 www.charitytimes.com SECTOR POLITICAL NARRATIVES
This group of liberal conservatives has divorced itself from the idea that our economic and social system can be changed to benefit the many not the few Asheem Singh, ACEVO
compromised by years of government. That’s not to say they can’t do it; it’s just hard. They are wounded. I wonder if that it is beginning to happen to the Tories too.
Mental manoeuvres Conservatism in a progressive age, an age where technological advances and demographic shifts happen at relative light-speed, can actually be a radical ideology, provided that time and care is taken to loosen the constraint of the Tories’ favourite Madam: pragmatism. If they want to be relevant, Conservatives must undertake that mental manoeuvre that loosens those bonds, that allows them to look beyond the present and towards a better future. Will they? Can they? If they can, I do not think it will be the liberal Conservatives who make it across. pushing his message. Indeed, his own This is where the importance I think, increasingly, that this will essay on civil society has been packaged of a distinctly Conservative ideology be where politics is fought: not on Public service reform. Charming. comes in. Fail to engage with the technocratic micropolicies or election ideology and the entire project day bribes, but on values. Ideology is Big Society comes apart. nothing but an expression of values. And it is a shame too. The Big Society And so it has for The Modernisers’ The Moderniser’s Manifesto is either light idea was an entire vision for government, Manifesto. This group of liberal or evasive on values and ideology and for statecraft, for a partnership between conservatives has divorced itself therefore fails its own test for successful people of principle and people of power completely from the idea that our manifestos. — one which Labour, rightly, is seeking economic and social system from start Clearly the wider Conservative to reinvigorate through the work of Jon to finish can be — or needs to be — movement will need to do better. Come Cruddas, who also spoke at The Gathering. changed radically to benefit the many and party conference season in September, The Big Society as an ideology was lacking not the few. That’s bleak and I don’t think it ACEVO and CAF will launch a collection of in many places; it rested on a liberal global will help the Conservatives in the long run. essays with each of the major parties. Let’s economic vision that, depending on your We shouldn’t blame the authors of this see who indeed does do better — and see point of view, is either completely bust or collection for this failure. Power corrupts, whether on that occasion we can prise out needs serious rewiring. but it would be more accurate to say more of their vision for the future. That is before we come to the fact that it atrophies. People with otherwise that no one really made an effort searing critiques find themselves bound Asheem Singh is director of policy at to communicate it. But that lack of by the compromise and structures of ACEVO communication was itself a symptom government. of Conservatives’ inherent resistance Look at the Labour front bench. Their The Moderniser’s Manifesto is available to ideology. capacity for original thought has been at: http://brightblue.org.uk www.charitytimes.com 11 THE REVIEW
Philanthropic Journeys by Beth Breeze
he main barriers preventing senior management of volunteers. philanthropy as “a dynamic, life-long Tbusiness people from volunteering The report focuses more on intended activity” and to explore the triggers for and donating are concerns about the rather than actual behaviour and a note volunteering and donation. In reality, professionalism of charities, of skills of caution should perhaps be injected it provides a snapshot of a brief (up to that they can offer and the benefits to here to temper the report’s claims. For three year) involvement in a particular be gained, according to a new research example, the report finds ‘a doubling volunteering placement instead of report. A lack of awareness of involvement intention to volunteer’ but only 48 per examination of philanthropic journeys opportunities and shortage of time are cent of the participants report that they over the whole life course. other significant factors. do volunteer more now than before they Although some life history data are The report: Philanthropic Journeys: new joined Pilotlight. Intentions do not always collected, the analysis emphasises the insights into the triggers and barriers for translate into actions. It’s also not clear significance of managing volunteering long-term giving and volunteering is funded from the survey findings how much this is experiences but underplays the role by the Highwood Foundation and written a short-term effect and how much is long of other factors that affect individual by Beth Breeze, director of the Centre for term, as both current and past participants volunteering decisions — but which are Philanthropy at the University of Kent. It were surveyed. beyond the control of charities, as the argues that time-limited, structured and The report also promised to examine modest rise in volunteering and donation appropriate volunteer placements like the rates found in this study indicates. ones offered by the charity Pilotlight can Daiga Kamerade says As many studies have shown and as help potential volunteers overcome some articulated by one study participant, that when it comes to of these barriers and increase volunteering marriage, children, unemployment and frequency and donation size. The report identifying how chari- many other life events impact on an includes new data from a survey of 227 ties can win the sup- individual’s ability to volunteer. There is senior business people and interviews port of high-earning some valuable evidence in the report on with ten volunteers who worked on professionals, this how charitable organisations can tailor Pilotlight placements. report makes an impor- volunteering to address these barriers, but The report will make interesting reading deeper exploration of what more charities tant contribution to for voluntary sector practitioners and can do would be interesting. policy makers concerned with why many the current debate It’s clear though that there’s much more senior business professionals — or, for to learn about the triggers to volunteer that matter, members of the public — do behaviour, and this report can perhaps not volunteer or donate. The interviews best be summarised as a noteworthy with the volunteers offer particular initial step in that direction. One inspiring insight. Before their placement, some feature to emerge is the way Pilotlight senior business professionals harboured recruited and retained volunteers. In negative views about the professionalism helping identify how charities can win the of charities. These negative assumptions support of high-earning professionals who vanished, however, once they actually have the potential to make a significant engaged in Pilotlight volunteering. The contribution to charities on all levels, this vast majority reported gaining an in-depth report makes an important contribution understanding of the vital role of active to current debates on enhancing trustees and the importance of the sector. volunteering experiences to encourage Having been involved in structured, committed volunteering. time-limited volunteering placements, many participants increased or Daiga Kamerade is research fellow at intended to increase the frequency the Third Sector Research Centre, of their volunteering and donation. University of Birmingham These findings suggest that Pilotlight’s approach to volunteer placements can Philanthropic Journeys is available at: serve as an inspiration for more effective www.pilotlight.org.uk
12 www.charitytimes.com THE REVIEW
A Call to Action for the Common Good
he ideas behind the Big Society are Talive and well, even if the label is Rhodri Davies says this no longer in vogue. That, at least, is the report distils some implication of a new report by Locality, key sector principles Navca, Civil Exchange, CSV and the and it should help to Carnegie UK Trust entitled A Call to provide added focus Action for the Common Good. The report doesn’t actually state its case in those to discussions in the terms, but its central contention is that area of the Big Society we need to find a new way of delivering and Common Good services, doing business and doing politics: one focused on the needs and wishes of citizens and communities. Even importance of these principles. For if the “Big Society” tag is deliberately instance, it notes the increasing focus avoided, it is clear that this idea is very in various academic disciplines on much in line with that agenda. Of course, the relationships between individuals ideas such as empowering individuals and rather than on individuals in isolation. communities or making business more It also highlights the growing interest in responsible are not unique and original to “responsible capitalism”, with its long- the Big Society. As this report notes, there term focus and awareness of the role has been broad agreement across sectors of businesses in society, as well as the sector has been grappling with for years. and political parties for some time now numerous think tanks talking about But putting them in the context of a vision about the need for shift of power in the the importance of devolving power to for the way society should aspire to work public and private spheres. communities and making public services adds weight to the argument that these The main substance of the first more citizen-focussed. things need to change. half of the report is “3 principles” that As someone who authored a paper The solutions suggested include many it identifies as being crucial for a society on Value in Public Services for a think- examples of positive things that are operating according to the common tank in the past, I feel as though I am already being done in some quarters, good. The first principle is “investing in personally lending weight to this part and which should be expanded upon. For tomorrow” that is, taking a long-term of their argument. Marshalling evidence example: public service mutuals, user-led view in business and policymaking, so that the trends identified are real is commissioning, personal budgets, women that we move beyond a short-term focus fair enough, but it doesn’t really move on company boards and using open data on profits or the current political cycle. things any further on. The aims and to drive accountability and transparency. The second is “everyone doing their ambitions for how things should be are It is clear that this report it is intended bit” — that is, empowering and fairly well-established and widely agreed: as a way of putting a disparate set of incentivising people to make a the problem lies with making them a existing thoughts and activities into a contribution to society, by making reality. And the report acknowledges clear context and stimulating a debate. public services people-focused, this — where it is most interesting is in This a debate which is already live, but transferring assets into community identifying the barriers to implementing any addition to the momentum for reform ownership and using open data to the key ideas and in its suggestions for is welcome. And by distilling some key boost accountability. what might need to change in order to principles, this report should help to The third and final principle is “getting overcome those barriers. provide added focus to discussions in connected”: that is, placing a focus The barriers highlighted in the report this area. on the importance of social networks include financial constraints, short-termist and connections between people and attitudes, private sector monopolies Rhodri Davies policy manager at CAF communities. in service provision, and the tension The report gives extensive (some between the rhetoric of devolving A Call to Action for The Common Good might say exhaustive) examples of power and the reality of central command is available at: people saying things that back up the and control. These are issues which the www.carnegieuktrust.org.uk www.charitytimes.com 13 THE REVIEW
Mammon’s Kingdom by David Marquand
MP, but finding the party had lost its Andrew Holt enjoys way, he was a founding member of the a brilliantly written Social Democratic Party. work on where we are This simple fact reveals much about today, but is frustrated Marquand: it highlights that while British that no real solutions politics has been a changing political landscape, Marquand has remained are offered up solidly on the same ground. Marquand has consistently held the social democratic line. From this position Marquand seethes eventually translated into collectivist and sighs at what we have become. policies.” Marquand captures and plugs into In the most important and Victorian the current national zeitgeist of frustration context the intellectual clerisy were for aimed at bankers, billionaires and the Marquand: Thomas Carlyle, “doom laden overall political and economic system. prophet of heroic leadership”; John Stuart His vision, is a debate about a “new public Mill, “administrator, economist, philosopher philosophy” which, he says: “Will be a and feminist”; Cardinal Manning, “austere philosophy for a disillusioned people, Catholic convert, champion of the battered by a crisis they did not cause poor and unemployed and hammer of and alienated from their leaders.” avid Marquand is a unique and employer exploitation”: John Ruskin, “art He then argues it: “Would reject the Doriginal political thinker, bringing critic turned social critic”; and Matthew unthinking anti-elitism which has fostered strands of thinking from both the left and Arnold, “bane of middle class philistinism (and been fostered by) the culture of right. Reading Mammon’s Kingdom and proponent of a strong state”. These hedonistic individualism. is like taking a journey; one where you were followed by, amongst others, the “It would stand for open, tolerant, thought you knew the destination, economist John Maynard Keynes and responsive and accountable elites, from only to take a different route on more father of the modern welfare state William diverse communities and backgrounds. than one occasion. Beveridge. Imbued with an ethic of civil duty and This can create a sense of being on a The second is the decline of public public service.” fascinating intellectual expedition, but also service professionals and with it trust, This could be One Nation Toryism. It lead to frustration: sometimes you want to and an apathetic obedience in the civil is therefore not surprising to find the know where you are going. service; and third, is a decline and fall Conservative philosopher Edmund Burke What is clear, is that throughout every in working-class leadership that has led recast by Marquand as vitally important to page of Mammon’s Kingdom a strong the way for the rapid rise of a relativistic the 21st century. morality drives Marquand. Sometimes the individualism, and most importantly, a But while Marquand plugs into such pages seethe with rage against a modern market fundamentalism in economics. exasperation, he offers little in the form of hedonistic age and despair for a more Marquand writes: “Market individualists a route map away from the disaster zone. decent time. assumed that free choice in the economy “We can begin to master markets instead Since the 1980s, Marquand warns we would go hand in hand with respect for of allowing then to master us.” But he fails have seen widening inequality, rising traditional morality. Moral individualists to say how this can, and should, be done. poverty, an obsession with consumerism, assumed that the ethic of ‘doing your own He gives a long sigh at the end with a decline of public trust, class snobbery, thing’ could be confined to the private his parting words: “We can’t go on as we family breakdown — all symptoms of sphere, while economic life was organised are”. We sense his frustration, but have no “moral individualism”. on (unspecified) collectivist lines. Not indication of how to get out of the malaise. A decline in important traditions are surprisingly, both assumptions turned out to be blame. These are split into three to be false. Hedonism was indivisible” Andrew Holt is editor of Charity Times elements. The first is the intellectual To understand where Marquand is clerisy, which Marquand says “played a coming from, a little understanding of his Mammon’s Kingdom is available from decisive role in shaping the opinions that background helps. After being a Labour Allen Lane: www.penguin.co.uk
14 www.charitytimes.com THE REVIEW
Money Mania by Bob Swarup
One of the great tragedies in economics to the crisis facing the Athenian empire in governments are — in being able to “occurred two decades ago, when many 440 BC being similar (unable to pay your manage or avoid financial crisis. university departments either closed debt) to the current Greek crisis. The book cites in detail the economic down their economic history groups Linking recessions and booms that crisis of AD33 being of far more or hived them off to sit with the history could be easily understood today is the importance to the Emperor then the department.” (Page 269 of Money Mania). core point of the book with the interesting execution of a minor religious cult leader I am not a conspiracy theorist but proposition that there is a direct in a far distant outpost of the empire. just a week before I was asked to review correlation into human psychology: Understanding debt is one of the this book I was at a dinner that included “Our psychology lends itself naturally to key learning takeaways. While leverage a former Chancellor of the Exchequer boom and bust”. Interlinked is the recurring is the key ingredient for growth and and a journalist from the Financial Times theme that we never learn from history as wealth creation; so understanding how where one of the items discussed was the we all believe that this time circumstances to service debt is important, but whether paucity of economic history and research. are different. it’s personal, business or government we The conclusion was simply that anybody While the book could be read and need to recognise that after doing all the involved in finance needs grounding in cited as evidence of the failure of market ratios, asset backed calculations and other financial history. This book would make an finance this is not a Marxist text. The quantitative calculations what can never excellent introductory reader. book is equally damming of the failure be factored in is the rationality or more One of the problems if such a course — or actually more how limited rulers/ appropriate irrationality of the human on financial markets history was ever race. How could a tulip bulb have ever taught in a good university is that it is been worth more than a house? Paul Palmer says there highly unlikely that this book would ever There is an abundant of richness in the make the reading list. This is because is an abundant of rich- book, but I would conclude this review it falls sadly between the “practitioner” ness in this book, but it with one of my favourites: “When Mark and “theoretical” literature which is lacks any theoretical Twain coined the phrase ‘Gilded Age’ to increasingly diverging. Considerable grounding in which to describe the last quarter of the nineteenth scholarship and reflection has gone into place its history of century, he was satirizing this explosion this book that is no dry text book, the of wealth for a perceived privileged few financial bubbles and book is referenced and has excellent against the social trauma that he saw support notes. their causes about him. Certainly, the period of the But this book lacks any theoretical Long Depression was one typified by grounding in which to place this history social tension and obsessions about of financial bubbles and their causes. the value of money. Periodic surges in Behavioural finance has now emerged unemployment and falling nominal as a distinct subject with a literature wages were blamed on immigration that is ignored for observations into and foreign competition and concerned popular social psychology by the author bodies sprang up to lobby for restrictions... whose journalistic style takes over. Native Americas and blacks were further Without giving the plot away suddenly disenfranchised, as economic priorities questioning is what I have written is true? became an additional divisive issue. Has more merit in a non-fiction detective Various countries passed protectionist novel then a book that wants to be taken measures to control capital flows and seriously and deliver a message about protect domestic industries”. financial markets. Claiming space does not allow it Professor Paul Palmer is director of the to cover the causes and rationale Centre for Charity Effectiveness, Cass behind the recent financial crisis is not Business School, City University London appropriate as the book begins and ends with issues of 2007 and on. The Money Mania is available from Bloomsbury book’s historical text makes reference Press: www.bloomsbury.com/uk/ www.charitytimes.com 15 COLUMN
Leadership
and could be intimidating to outsiders. Vision and clarity It took a long time for this to shift, but in the end changes on the Board allowed ifteen years ago, I joined the the organisation to generate a more open FDevelopment Trusts Association (DTA), culture, and to grow a more diverse and initially as interim Director and then confident movement. more permanently. I knew little about I will always remember George the organisation at first, but quickly Nicholson, the chair of the DTA when I discovered something remarkable: a joined, telling me: “Any really worthwhile network of community-led organisations, change will take ten-to-fifteen years, all of them passionate about tackling and you will need to play a long game.” problems in some of the most deprived “But,” he added, “always retain the vital places in the country. quality of impatience, always push hard Here was a whole philosophy in the here and now. That’s what our best of change: an “asset-based” Steve Wyler shares his expe- community members do, and that’s what approach, seeking out strengths in rience of leading Locality as its you will have to do nationally.” He was a neighbourhood, combining social CEO and lists some key criteria absolutely right. and economic regeneration, bringing I also learned we couldn’t achieve for organisations to follow: a land and buildings into community the scale of change we aimed for on ownership, forming community belief in the power of the people, our own. We needed allies, and so we enterprises, ploughing surpluses back often in the most adverse found them, in the civil service, in local into the community. circumstances, to become the government, among independent As we said at the time, these solution and create wealth in funders, across political parties, elsewhere organisations were “creating wealth communities and keep it there in the Third Sector, even occasionally in in communities and keeping it there”, the private sector. often with tiny levels of resources. This One of our best allies was Bassac, the was wonderful, so unlike the massively British Association of Settlements and expensive top-down government regeneration of the period, Social Action Centres. We bought a building together and started led by local councils and private developers, where consultancy to share staff. In 2011 we went a step further, driven by a belief firms grew rich, and communities were well and truly stuffed. that together we could do more, that we could ‘change the world The DTA itself was financially vulnerable, and often treated with one neighbourhood at a time’, and merged to form Locality. suspicion and disdain by those in government and elsewhere, Quickly the new organisation was able to become the but my predecessor Angela Monaghan had worked to sound leading champion of ‘localism’: shaping the Localism Act, principles, which really stood the test of time: training community organisers, supporting people to produce First and foremost, the organisation was a ‘give-get’ alliance of neighbourhood plans, helping communities acquire land and independent community practitioners, where membership implied buildings, and building a bigger movement. mutual suppport and encouragement. The 500 Locality members in England now own more than The staff team was dispersed around the country, always close £650m of community assets, and generate more than £200m to practice. The message to new staff was always ‘spend time with earned income a year. We have 4,000 supporters and associates. members’. Over time this created an authenticity for the Association’s So it has come a long way, but the founding principles haven’t efforts to spread its message more widely, to win allies, and to changed: a belief in the power of people, often in the most campaign for national change. adverse circumstances, to become the solution, to create wealth The organisation was essentially positive in its outlook: “never in communities and keep it there. criticise without a solution, never give praise without a challenge” In July, after fifteen years, I will be handing over to my successor was the spirit of the organisation from the earliest days. Tony Armstrong. That’s another thing I’ve come to learn: that it’s I think it is true to say that in its early years the DTA had been best to leave when the going is good – that way there’s a real a fiercely proud club of community activists convinced that their chance it will go forward even better. approach was right and that everyone else was wrong. It was dominated by talented and combative people (almost all men), Steve Wyler is the out-going chief executive of Locality
16 www.charitytimes.com COLUMN
A better society
of volunteering programmes. Philanthropy in society To help the younger generation give, our report recommends the government he UK has a rich history of philanthropy, creates a taskforce of leading Twhich has led to the strong culture professionals to drive real progress in of giving we enjoy today. However it’s digital giving. We also propose that TV important we don’t become complacent channels give up a mandatory time in the premier league among the top ten commitment each year to give charities most charitable countries in the world. airtime and to raise awareness of Behind our positive culture of giving important social issues. a worrying trend has been emerging. We also call on businesses to radically Recent research shows that charities are overhaul their practices to place becoming increasingly dependent on charity at the heart of their work. Any the support of older donors, and that attempt to encourage philanthropy and the number of households who give John Low analyses the volunteering in the workplace must come to charity is dropping. We need to act findings of a CAF report that, from the top, and it is for this reason that now to tackle this trend and ensure in an attempt to tackle the we call on MBA providers to offer courses people keep supporting charities and on philanthropy to help future business many philanthropy giving their vital work. leaders explore how they can bring That’s why we launched a challenges, suggests that about social good. Businesses should Parliamentary Inquiry last year to businesses create ‘giving also look at a candidate’s commitment look into giving across different age circles’ in the workplace and to philanthropy and charity work when groups and life stages. Chaired by David allow employees a range of considering them for a senior executive Blunkett MP, Baroness Claire Tyler and ways to support good causes role. If a potential CEO has a long history Andrew Percy MP, the cross-party inquiry of getting involved in the fundraising collected evidence from experts on the efforts and volunteering opportunities in potential as well as the barriers to giving the workplace, it makes it more likely that for people in education, in the workplace and in their retirement. a charitable ethos will run throughout the organisation. After a year of collating everyone’s evidence, we have launched However it’s also important to help the new starters in the our recommendations this month on how we can boost charity workplace get giving. We suggest that businesses create ‘giving support and unleash the UK’s giving potential. circles’ in the workplace and allow employees a range of ways Our recommendations recognise that it is impossible for one to support good causes. The Government should also reshape single sector of society to unlock the giving potential of the UK the incentives for businesses to drive up support for charities by and so we have called on businesses, charities and government to matching donations made by their employees. help us achieve this. Lastly it is important that people approaching retirement, who In our inquiry it was encouraging to see just how enthusiastic would like to use their skills to help charities, are given advice the British public are about the work of charities and that their on what opportunities are open to them. Therefore we propose passion for good causes starts at an early age. the creation of a post-careers advice service. In order to help To make sure young people get enough opportunities to pensioners continue to donate, we also call on the government work with charities our recommendations suggest that charity to introduce Living Legacies in the UK. work becomes an integral part of careers advice, citizenship and At CAF we are positive about the future of giving in the UK, but personal development at schools. Charities also have a role to want action to be taken now to ensure volunteering and donating play in getting more young people interested in serving on the to charities continue to be the social norm. Our proposals give boards of charities, and so we recommend that large charities give useful guidance on how this can be achieved and we will be students the opportunity to shadow charity trustees. working with organisations to ensure that as many of these In order to underline the importance of voluntary work and proposals as possible are put into place. By removing the barriers fundraising, we have called on UCAS forms to have a separate to giving for all we hope to build a stronger and better society. social action section for university applicants to fill in. At university, we also have suggested Student Unions increase their promotion John Low is chief executive of CAF www.charitytimes.com 17 COLUMN
Research and evaluation
Unfortunately, this approach is not Measurement always straightforward to implement. It involves a fair amount eter Rossi’s Stainless Steel Law of discussion, research, debate, and Pof Evaluation is the bane of my head-scratching. The nature of a professional life. Rossi was an American charity’s work and the context in which sociologist and renowned evaluator. His it operates are crucial when deciding the Stainless Steel Law — I’m paraphrasing best way to develop evidence about the here and adapting his observation for charity’s impact. charities — states that the more rigorous Thus our four pillars approach a charity is in assessing its impact, the identifies the issues you need to focus on, lower the estimate of that impact. the questions you have to answer, and The law, if true or perceived to be the options you can choose from. But it true, makes it hard to persuade charities does not give you direct answers. These to improve how they measure the When it comes to research and you need to work out for yourself. difference they make, particularly if evaluation there is often much In our experience, this is an approach doing so uses up valuable resources. Why head-scratching, says David well worth implementing, but not all bother, if it only makes your charity look organisations are ready for it. Of the Pritchard. And he notes, less effective? sixteen clients for whom we have The potential implications of the that developing appropriate developed impact frameworks, two Stainless Steel Law of Evaluation are frameworks are not the only were unable or decided not to implement not good. If charities don’t improve how way charities can improve their our recommendations. they assess their impact, the sector as impact assessment The chances of finding this approach a whole doesn’t fully understand what useful go up if you as a charity: works (and what doesn’t) for whom and • Make assessing your impact a when. Potential opportunities to improve priority because you want to know the the lives of beneficiaries — such as the difference you make, rather than because most disadvantaged in society — are foregone, and some of the someone is making you it goodwill and effort of charities is wasted. • Have high-level sponsorship from the board or senior At NPC our response to Rossi’s law is two-fold. Firstly, we argue management team that improving how you assess your impact is a good thing to do • Do not leave if to the CEO to drive the work forward regardless of the results: it helps beneficiaries as described above, • Have someone with relevant experience in, or soon to take up, while funders like good evidence. the role of being responsible for your organisation’s impact Secondly, we try to make it as easy as we can for charities to improve their impact assessment. To promote the latter we If one or more of these conditions are not met, you may not recently published the approach that NPC uses to work out how realise the full benefits of the time and money you’ve invested. a charity or social enterprise should measure its impact. It also helps if you bear in mind Rossi’s Stainless Steel Law: you The approach is based around four pillars or steps: will need to accept the risk that your impact may turn out not to 1. Map your theory of change be as high as you expect or hope. 2. Prioritise what you measure Developing appropriate frameworks is not the only way 3. Choose your level of evidence charities can improve their impact assessment. NPC is involved 4. Select your sources and tools in a whole range of issues advising individual organisations, including: developing avenues for charities to access government It sounds straightforward, but it has taken work with data on outcomes; promoting the development of shared and sixteen consulting clients and numerous training sessions robust measurement tools and providing a to share good ideas. over several years to design, test, refine and explain this approach We keep Rossi’s Stainless Steel Law in mind — not to debunk it, in a 50-page document. We want others to benefit from this but to work around it. experience because our mission is to help transform the sector and increase its impact. David Pritchard is head of measurement at NPC
18 www.charitytimes.com COLUMN
Charity campaigning
all have an equal right to a voice in the Politics and the sector public domain. It is sad, then, that there is today re charities ‘too political’? It’s a shrinking space for our sector to Aan important debate to have. At outline this common sense position. ACEVO our position is clear: charity From the Lobbying Act, to the labelling campaigning directly strengthens our of charity campaigns as “attacks” from democracy. Attacks on charities’ right to “left-wing pressure groups”, to unfair campaign are attacks on a democratic and unnecessary referrals to the Charity culture of decision-making based on Commission, charities are having their evidence and on the organised voice ability to carry out their duties eroded. of the most vulnerable in our society. A climate where contrary opinions are It’s hard to believe anyone would dismissed out of hand is unhealthy and object, and so it’s worth thinking about dangerous. why they might. After much controversy and Each time new complaints appear Oxfam’s charitable objectives give debate about the recent Oxfam we have to be more vocal, lest a new them a duty to campaign against poverty campaign, Stephen Bubb restriction be put upon us. And each time worldwide. Today they are questioning we are more vocal, politicians may well argues that the sector should the policies of successive Labour and roll their eyes and urge that our voices Coalition governments, which Oxfam’s continue to be forthright in be stopped. research suggests have increased stating its contribution to This need not be a downward spiral. insecurity and low pay for many millions. democracy and public life Charities bring knowledge of the Critics appear to confuse the fulfilment problems facing these groups to the of this charitable objective with political table, and are essential to stand up for campaigning that is partisan. They people who would otherwise be ignored. lurch between suggestions that Oxfam Policy is best formed when the needs shouldn’t speak out because of certain of all it affects are considered. A survey kinds of programme funding that they receive from government, conducted last year for ACEVO by YouGov found that 49 per cent and suggestions that they are factually wrong. of people trusted charities to lobby government for good — I think it is important to say clearly, and without prejudice more than Trade Unions or private companies. to the confused, that this is not about any sort of partisanship, This echoes recent research by the Charities Aid Foundation, but about simply doing what it is that charities exist to do. who found that 73 per cent of people across 15 countries felt One of the most vital functions of the charity sector is to that charities have a role in calling the government to account. offer a voice to the vulnerable — it is their duty to campaign It is an acknowledged fact that the independent voice of charities on behalf of the people they represent. Take for example the is key in keeping our democracy healthy. prominent role of charities like the Royal British Legion in We must use this position of trust to continue to make the championing this year’s armed forces day, on 28 June. Or case, not only for independence of voice, but for the public policy look back at the history of our illustrious sector, at the benefits that independence brings. achievements won in the 19th century like the abolition of The UK is one of the world’s foremost liberal democracies, slavery, and at campaigns by the NSPCC and RSPCA against and has been for centuries. Freedom of speech, open discourse the ill-treatment of children and animals. A vocal charity sector and criticism of all governments are key to maintaining this. enhances political and public life, and does nothing to diminish To censor dissenting voices in charities is a move in the politicians’ authority. wrong direction. Neither Oxfam, the Royal British Legion nor any other charity Our sector should instead continue to be forthright in stating should have their message censored because it makes members our contribution to democracy. A society that listens to its of the government unhappy. How can politicians claim that charities is a strong society, and I hope that Britain will continue charities need to remain free and independent and then ask to do so for many years to come. them to censor their own message because of the funding they receive? Irrespective of where their money comes from, charities Sir Stephen Bubb is CEO of ACEVO www.charitytimes.com 19 Find your next management job at www.charitytimes.com
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charity_job.indd 1 10/29/2013 3:11:28 PM 15th Annual Charity Times Awards SHORTLIST
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CT2014_awards_shortlist.indd 2 02/07/2014 12:32:20 15th Annual Charity Times Awards – Congratulations to the Finalists!
Since their inception the Charity Times Awards have continued to grow at a rapid rate and this year once again sees the level and quality of entries improve, creating an impressive shortlist of twenty eight sought after awards. Thank you to all who entered the awards and congratulations to the nalists. We look forward to announcing the winners on the 22 October 2014 at the Lancaster London Hotel.
The Gala Dinner and Awards Ceremony
The Charity Times Awards provide the sector with a dedicated event to reward the exceptional work carried out in di cult and competitive conditions, and establishes a unique annual congress of the pre-eminent gures in the sector at the premier charity event of the year. The Charity Times Awards will as always be a night to remember. Book your table now at www.chartiytimes.com/awards
For the latest news and updates about the Charity Times Awards follow us @CharityTAwards #CharityTimesAwards14
2014 Shortlist
1. Charity of the Year: 3. Charity of the Year: with an income of less than £1 million with an income of £5million - £10million • Auditory Verbal UK • Christians Against Poverty • Busoga Trust • Hearing Dogs for Deaf People • Clement James Centre • Langley House Trust • Mosaic Clubhouse • National Youth Agency • QED Foundation • Trinity Hospice and Palliative Care Services • TwentyTwenty • UK Youth
2. Charity of the Year: 4. Charity of the Year: with an income of £1million - £5million with an income of £10million - £30million • Horse Trust • Clic Sargent • Into University • Diabetes UK • North Devon Hospice • Muslim Aid • Rochester Bridge Trust • Prostate Cancer UK • Stratford-upon-Avon Town Trust • Teach First • Teens & Toddlers
Book your table: www.charitytimes.com/awards
CT2014_awards_shortlist.indd 4 02/07/2014 12:32:36 5. Charity of the Year: 10. Campaigning Team of the Year with an income of more than £30million • Age UK • Alternative Futures Group • Business in the Community • Citizens Advice • Citizens Advice • Guide Dogs for the Blind • Fostering Network • Stroke Association • Meningitis Now • United Response • NSPCC • Sense 6. Outstanding Individual Achievement • Peter Agulnik, Founder, Restore 11. Best Use of the Web • Eric Appleby, CEO, Alcohol Concern • Diabetes Research & Wellness Foundation • John Jenkins, Club President, Sportable • Leonard Cheshire Disability • Jacqueline Stokes, Founding Director, Auditory Verbal UK • The National Autistic Society • Bridget Turner, Director of Policy & Care Improvement, • Quartet Community Foundation Diabetes UK • Royal Academy of Dance • Samaritan’s Purse UK 7. Rising CEO Star • Sky Badger • Ava Easton, CEO, The Encephalitis Society • United Response • Nicky Goulder, CEO, Create • Graham Hodgin, CEO, London’s Air Ambulance 12. PR Team of the Year for a charity: • David Houston, CEO, Trinity Hospice and Palliative Care with an income of less than £30million • Charlotte Keenan, CEO, Tony Blair Faith Foundation • Battersea Dogs & Cats Home • John Rendel, Founder and CEO, Promoting Equality in • Girlguiding African Schools • Prostate Cancer UK • Royal Academy of Dance 8. Fundraising Team of the Year • Samaritans • Cancer Research UK • Teach First • Christians Against Poverty • Country Holidays for Inner City Kids 13. PR Team of the Year for a charity: • Everton in the Community with an income of more than £30million • Voiceability • The Alzheimer’s Society • Citizens Advice 9. Charity Principal of the Year • Electrical Safety First • Jeanette Allen, Chief Executive, The Horse Trust • PDSA • Lorraine Clifton, Chief Executive, CLIC Sargent • Stroke Association • Claire Horton, Chief Executive, Battersea Dogs & Cats Home • WaterAid • Richard Leaman, Chief Executive, Guide Dogs • Barbara Young, Chief Executive, Diabetes UK
View the judges: www.charitytimes.com/awards
CT2014_awards_shortlist.indd 5 02/07/2014 12:32:39 14. HR Management Award • The Big Lunch/Halifax Bank • Action for Blind People • Dementia Consortium/MRC Technology • Brook • Shelter/KPMG • Fairtrade Foundation • Prostate Cancer UK/ Royal Mail • Living Streets • Teach First 20. Corporate National Partnership of the Year • Victim Support with a Retailer • Breast Cancer Care/QVC 15. Social Investment Initiative • Cancers Research UK/TK Maxx • Business Connectors Programme • CLIC Sargent/ Lidl UK • Key Fund • Diabetes UK/ Tesco • Nominet Trust • Save the Children/Morrisons • Social Investment Business • UK Youth/Starbucks
16. Big Society Award 21. Corporate National Partnership of the Year • A nity Sutton - The Community Ambassadors with a Financial Institution • Carers UK • Citizens Advice/Prudential • Caritas Anchor House • Ecclesiastical/ Carers Trust • Senior Citizen Liaison Team • Help the Hospices/Clydesdale Bank and Yorkshire Bank • Trussell Trust • Lloyds Banking Group/Alzheimer’s Society/ • Victim Support Alzheimer Scotland • Macmillan Cancer Support/Nationwide 17. Fundraising Technology Award • Social Mobility Foundation/JP Morgan • The Big Give Christmas Challenge • Horse Trust 22. Cross-sector Partnership of the Year • iStreet Giving • Brathay Trust/Common Purpose Charitable Trust/ • PayPal Giving Fund /eBay for Charity The University of Cumbria • The British Red Cross/Blackpool Teaching Hospital NHS 18. Corporate Community Local Involvement Foundation Trust/Fylde Coast • Ashgate Hospice/Wilkinson • Coalition for Continuing Care • Community Links/Barclays • The Conservation Volunteers/People’s Health Trust • ReachOut/Macquarie Group • Everton in the Community/Mersey Care NHS Trust • St John’s Hospice/John Lewis Oxford Street • Mind/Victim Support • MND Association/Royal College of GPs 19. Corporate National Partnership Champion • Samaritans/The National O ender Management Service • Action Against Hunger/Carluccio’s England & Wales, Scottish & Northern Ireland Prison • Action for Children/Network Rail services • Alzheimer’ Society/ Lloyds Banking Group • WaterAid/Belu Water
View the hall of fame: www.charitytimes.com/awards
CT2014_awards_shortlist.indd 6 02/07/2014 12:32:41 23. Corporate Social Responsibility Project of the Year 26. Investment Management • Foundations Independent Living Trust/RWE npower • Brewin Dolphin • ICAP Charity Day • Cazenove Charities • Lloyds Scholars • Investec Wealth & Investment • Restless Development/KPMG • JP Morgan • The Sabre Charitable Trust - Sustainable Kindergarten • Newton Investment Management Project/Arup • Quilter Cheviot • War Child/Forward Internet Group • UBS Wealth Management • Warner Brothers Creative Talent 27. Boutique Investment Management 24. Best Use of Technology • Charities Property Fund • Brightside/the Financial and Legal Skills Partnership: • Heartwood Investment Management Get In Get On • Mayfair Capital Investment Management • The Fire Fighters Charity/Angal/Barclays • Rothschild • Hospice in the Weald/Cybertill • Waverton Investment Management • Leyton Orient Community Sports Programme/ Databarracks 28. Consultancy of the Year • RNLI/Qbase • Berkeley Partnership • Save the Children/The Purple Agency • CloudSymphony • Stand Against Violence • Foster Denovo • Mile 91 25. Social Champion Award • Premier Companies • Bromley Healthcare • Principle Consulting • Caritas Anchor House • PwC • Giveacar • Qbase • Pluss • TCV Hollybush
Contact us For general event For judging/ Sponsorship Sponsorship enquiries: nomination enquiries: enquiries: enquiries: Hayley Kempen Andrew Holt Cerys Bra eld Sam Ridley +44 (0)20 7562 2414 +44 (0)20 7562 2411 +44 (0)77 6666 2610 +44 (0)20 7562 4386 [email protected] [email protected] cerys.bra [email protected] [email protected]
For the latest news and updates about the Charity Times Awards follow us @CharityTAwards #CharityTimesAwards14
Book your table: www.charitytimes.com/awards
CT2014_awards_shortlist.indd 7 02/07/2014 12:32:45 An easy fundraising solution Sainsbury’s Gift Card Sainsbury’s understands what it takes to raise money for Not-for- 1000s of profi t organisations. choices Each year our colleagues, clients and suppliers help to raise money for a variety of charities and organisations.
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CD3578_Waverton_Charity_Ads_CharityTimes_204x135.5.indd26_sainsburys_waverton.indd 1 1 25/06/201411/02/2014 13:40:47 13:46 DIGITAL FUNDRAISING
Digital Fundraising
28 Digital opportunities 32 Under control Digital fundraising is perceived by many as a Rob Barr looks at how charities can growing opportunity for the third sector. How gain greater control with fundraising can it take full advantage, asks Antony Savvas technology DIGITAL FUNDRAISING
Digital opportunities
Digital fundraising is Good digital fundraising covers donations to charities in the UK were perceived by many as anything from responsive websites made digitally. And, according to other that can handle all the digital gadgets IoF figures, the size of individual online a growing opportunity that potential donors use, including donations rose 21 per cent between 2010 for third sector organi- smartphones and tablets, to the and 2012. innovative use of social media sites With the global economy improving sations to maximise and the deployment of mobile apps and digital channels becoming ever their coffers. So what that can help keep donors close to their more important in other areas, such as do they have to do to chosen charities. retail, accessing government services and Up-to-date figures on the extent of completing basic work functions, one take full advantage, digital fundraising across the third sector might presume the importance of digital asks Antony Savvas are hard to come by. According to the fundraising has escalated. Institute of Fundraising (IoF), during But maybe not so? John Onion, a the last quarter of 2011, 15 per cent of charity digital marketing consultant for
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Action Planning, says: “The figures I hear anecdotally mentioned regarding the Digital fundraising is niche. No more than 4 per cent of level of digital fundraising, charity-by- charity income typically comes from online charity, are consistently under 10 per cent, Joe Saxton, nfpSynergy apart from international crisis campaigns that often attribute 90 per cent of their considerable income to digital.” He adds: “But this has to be considered down the givers. the Institute of Fundraising, says: “Certainly as only a part of what digital does. As a He says: “Text messages are becoming in the last few years we have seen a communications medium digital media’s easier to ignore but direct requests to significant rise in the number of charities engagement with supporters may result give money are harder to. What tends to recognising how important digital in donations that aren’t classified as work better is sending messages and then fundraising can be. As this has increased, digital, such as running a marathon or following them up with a phone call.” the amount of training and information in legacy giving.” this area of fundraising has also increased, This is echoed by Grahame Darnell, Digital skill levels but there is still probably a skills gap.” managing director of the fundraising, So while the level of digital fundraising Darnell adds: “We should be careful marketing and management consultancy does not seem to be on a spiralling curve about making generalisations about ‘the Darnell Consulting. He says: “It’s difficult to at the moment, how about the skill levels sector’. Like all sectors there are some quantify. Digital often plays a key role but at charities when it comes to launching people who are ahead of the curve and may not be the ultimate way the donation digital campaigns? others who are laggards. There are plenty is given. Caroline Drummond, policy officer at of good examples of digital fundraising “Take two-step SMS fundraising for example, traditional media (like train or wash room ads) drive an initial Digital at work donation via digital (a text donation); a thank you text goes out and then a he Hilton in the Community Foundation (HCF) is using Blackbaud’s software-as- conversion call is made by a telemarketing Ta-service online event fundraising platform Heroix to help grow its fundraising agency to secure a direct debit sign up. initiatives across Europe. The donor then gets an email telling them HCF has been established for 14 years and has raised more than £14m across how amazing they are.” Europe, through fundraising initiatives run by the hotel group’s staff members. Organisers decided that HCF needed a better online fundraising platform Digital overplayed? so each supporter could have their own individual event page and bespoke And Joe Saxton, driver of ideas at website address. nfpSynergy, the charity research Heroix is a mobile platform with a range of features, including the emailing of consultancy, is adamant that digital’s role is supporters and the sending of updates via social media. somewhat overplayed. Saxton says: “Digital “It offered the more cost effective flexibility and control than our previous online fundraising is niche. No more than 4 per giving platforms, which often felt like people were not aware of the fact it was HCF cent of charity income typically comes doing the fundraising, and how our supporters fit together,” says HCF fundraising from online, although it is quite patchy events executive Samiya Rashid. with the bigger ones doing better. “Individuals now set up their own branded and bespoke giving page, which “It is of course different when it comes makes it easier to see how much each centre or event has raised and introduces to the overseas disasters or the big event a fun element of competition.” charity drives. But digital fundraising is In addition to on-going hotel fundraising, HCF runs a large number of fundraising never going to be the big thing, ever, and events each year, including Around the World in a Day and the Mayfair Power and there are various reasons for this.” Tower Race, where individual runners run 4.5km around Hyde Park before climbing The 4 per cent figure comes from the 28 floors at the London Hilton on Park Lane. nfpSynergy’s own regular research among All money raised via HCF is used to support children and young people up to the around 100 charities. age of 25, with core giving remits being education and health. Saxton says the nature of most digital Half of the money raised goes to charities nominated by individual hotels, and fundraising is potential donors having to half goes to organisations that have applied for a HCF grant centrally. seek out digital channels, when raising the In addition to providing the online giving platform for each individual hotel, the most money in campaigns usually involves Blackbaud Heroix team designed a central giving hub, so all staff/event participants the charities themselves having to chase are able to find their hotel/event. www.charitytimes.com 29 DIGITAL FUNDRAISING
across the sector and not all of them are concentrated amongst the big players. Some smaller charities have become digital experts because digital is generally an inexpensive option and small charities lack budget.” Onion adds: “There are some exceptionally bright digital marketers from the charity sector, operating on some ground-breaking campaigns. That said, there are several organisations that are slow to react to the digital world. “Many of them are smaller charities that lack the resources, but also there are some larger organisations that still don’t prioritise digital channels. I think this is because of little digital experience at a senior management level in many organisations, and a lack of commercial pressure forcing the issue.”
Responsive websites And what about the question of responsive websites, to enable charities to easily handle donations from smartphones and tablets? The IoF’s The best websites are those that are not purely focused on Drummond says: “This can vary from charity to charity, larger organisations the fundraising, but which are good on the content that that have launched campaigns targeting engages with relevant audiences younger and more mobile savvy John Onion, Action Planning donors, for instance, may have quickly adopted responsive websites to easily that is unforgivable really.” good digitally aren’t prohibitive, we are communicate with smartphones seeing that there is a bit more of a level and tablets.” Website design playing field. She pointed out though that many So what are the best type of digital “In fact, some smaller charities have charities also use third party platforms to fundraising websites when it comes to an advantage because they are more receive donations, for example JustGiving, raising the most? The IoF’s Drummond agile, and can respond to things without Virgin Money Giving or BT MyDonate, says: “Charities that have accessible, easy going through layers of bureaucratic sign meaning the charities themselves to navigate websites and integrated social off. Beating Bowel Cancer — a client of don’t necessarily have to have the most media tools will work best for successful ours — are a good example of this, as sophisticated technology. digital fundraising. Many of these are the whole website is built around a But she stresses that “ensuring organisations able to invest in more digital community.” websites are adapted to be accessed sophisticated technology, and may have Action Planning’s Onion says: “The best on smartphones and tablets is becoming campaigns targeted towards younger websites are those that are not purely increasingly more important to charities, donors who are more likely to make focused on the fundraising, but which have that may have overlooked it in the past”. smaller donations via mobiles or tablet.” good content that engages with relevant Darnell adds: “Most charities do have Darnell says: “Most of the big players audiences, and increase visitors through responsive websites, although some of are strong in this area — like Cancer other channels such as web search. the smaller ones lag behind a little. And Research UK and Macmillan — but “This can then start a relationship with there is the occasional situation when you what’s interesting is that some smaller a sizeable relevant audience. The Rethink go onto a major charity’s website and it is charities are really on the front foot too. site strikes a nice balance, also Diabetes a horrible experience on a smartphone - Because the costs of doing something UK, Breast Cancer Campaign and the new
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World Animal Protection International site Digital and a giving culture recently uploaded.” rust, a giving culture and a good uptake of technology are essential if digital Not a magic bullet Tfundraising is to work for charities, a report recently found. On digital fundraising overall, Darnell says: Digital fundraising — a world of opportunity, published by nfpSynergy in partnership “I think it is crucial that people see digital with the Resource Alliance, assessed the factors influencing online giving trends and for what it is — a channel not a magic identified three principles which are central to success: bullet. It is a vital part of the mix but it can’t achieve wonders without the basics of Trust — a lack of confidence in a non-profit’s operations and its effective use of good fundraising, like a strong story that donations will deter people from donating. Among several recommendations, the conveys need and a clear ask for money.” report suggests that organisations situated in unstable political climates can become He says: “If you have a weak ask and your more effective fundraisers by first cultivating a trustworthy reputation over a number strategy is simply ‘digital’ then you won’t of years in advance of launching their first campaigns. get results. A strong proposition is key and it is still the traditional channels like face- A giving culture — religion, a sense of community and local attitudes towards to-face where the proven results are. money-giving all play a big part in determining an individual’s propensity to give. “It’s also important to underline that Being knowledgeable about the subtle nuances of a particular country or region can some of the most successful digital prove critical in effective fundraising. fundraisers — like Stephen Sutton’s campaign and #nomakeupselfie — were Technological uptake — naturally at the heart of digital giving, the spread of new successful because they were organic. It technology is vital to fostering global connectivity, transparency, citizen advocacy and is impossible to manufacture that kind democracy. However, technological advances become obsolete without the first two of authenticity.” principles in place first. The limits of digital fundraising are again echoed by nfpSynergy’s Saxton. Andrea de Ruiter, a researcher at nfpSynergy, says: “Digital fundraising is an area He says: “Digital is helpful but it has not with huge potential for growth and we wanted to explore whether it is one non- been transformative in the charity sector profits should be investing their valuable resources in. so far, like in the same way it has been in “This report provides a really good starting point for non-profits that want to take the online banking sector or in the music their fundraising to the digital level. Speaking to different non-profits working around industry, where musicians increasingly the globe, we came across some remarkably similar challenges they face, irrespective make their money from downloads. Digital of whether they’re a small community project in India or a large non-profit with an campaigning is one thing and digital international brand. fundraising is another. I believe there is a “Before they consider digital fundraising, non-profits need to be asking themselves, natural limit for digital fundraising in our ‘do people trust our organisation’, ‘do we operate in a culture where people want to sector.” give’ and ‘do we have the technology to support it?’ If the answer to these questions ‘yes’ and non-profits have an inspiring, attention-grabbing, convincing appeal ready to Antony Savvas is a freelance journalist go, digital fundraising provides a whole new world of opportunity.”
Gift Aid boost
dvanced NFP’s Gift Aid portal for organisations to ensure the claim is Gift Aid is worth nearly £1bn a Ahas helped its charity customers validated at the time of submission. year to charities and their donors. to process over £100m in charitable The Gift Aid SAAS portal, which brings It was introduced in 2000 by the UK donations in the last six months and together all the Group’s NFP products Government as a way for charities or reclaim tax of over £25m. for processing Gift Aid transactions, Community Amateur Sports Clubs to This applies new online Gift Aid has proved popular with a large increase the value of monetary gifts processing requirements demanded percentage of Advanced NFP’s from UK tax payers by claiming back by HMRC, which came into force in customers. Using the portal automates the basic rate tax paid by the donor on September 2013. The new requirements the claims submission process which the donation. It increases the value of for online processing include has significantly reduced the associated donations by a quarter at no extra cost significant data cleansing processes administrative burden. to the donor.
www.charitytimes.com 31 DIGITAL FUNDRAISING
This makes maintaining control particularly hard and it impacts management, and the operational and fundraising team’s ability to tell how the money is being raised, where it is being spent, which projects are delivering results — and which are not. Integration is key to solving these issues but unfortunately this has become more difficult in the not-for-profit sector than it was three or four years ago. The rapid increase in channels such as bulk email marketing, online-giving, social media, and peer-to-peer fundraising has made integration more complex. The multitude of different systems all sitting in isolation is resulting in teams working in data silos once again. It is a double edged sword, whilst there are now many ways to reach and engage with target audiences, this means there are more sources to manage.
Under A cultural matter There is also another deeper problem that needs to be tackled — that of cultural issues. Centralised, integrated control systems are the cornerstone of true efficiency and being more informed about the successes and failures within an organisation. It enables them to be Rob Barr looks at how charities can gain greater agile, responsive to change, creative and forward thinking, whilst the day-to-day control with fundraising technology is managed in a more structured, systematic way. However, as new channels come Big data, social media, online-giving, The issue along, well-meaning staff look to utilise peer-to-peer, hybrid cloud — with ever It has to be remembered that much of these opportunities — including Twitter, changing technologies you can be the talk around big data and the latest Facebook, Just Giving, and Virgin Money forgiven for feeling overwhelmed technologies is not a concern of probably Giving — in a bid to attract more support. trying to keep on top of it all. As the 90% of mid-sized charities. Or at least But all these channels often signal that landscape continues to change, the not a concern in the way we might expect. valuable information is being kept not-for profit sector is fully aware that it The real problem that organisations outside the main system, and therefore must move too. Being visible, relevant and are facing today is that there are so many fails to gain the visibility it deserves. engaging with donors and supporters is channels and so much information that Organisations need to have a plan key to winning hearts and minds when it it is incredibly difficult to bring it all in place to effectively dissect the true comes to fundraising efforts. together in any meaningful form. As a relevance of new channels and how they However, it can be all too easy to get result, a huge number of charities are can be integrated within their systems. caught up in the hyperbole when a struggling to tackle the problem. Therefore, it should be part of the culture more pragmatic approach should — and What often happens is the fundraising that systems and working practices are can — be taken to help an organisation department is using one system, the regularly reviewed — they are never a successfully deliver on its key service communications team another, the one-time event. objectives. volunteers team another and so on. Whilst any good system will stand the
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test of time, it should be flexible enough Finding a solution supporters that care about what you do. to take account of the changes and Finding the right fundraising solution, But it’s important to understand challenges that a not-for-profit and ensuring it will integrate into, who is engaging with you, to what extent will inevitably face. As donors and for example, your finance system, and the impact this is having on delivering supporters become more focussed should be at the top of your criteria list. the required outcome. This is why solid on the extent to which their hard earned It should also include those inter- business intelligence and reporting tools cash is making a difference for their connected activities that are now so are also the bedrock of any fundraising chosen cause, organisations will need low cost to implement but can streamline system — areas where most not-for- to prepare for greater transparency and operations, such as business intelligence, profits struggle. accountability. timesheets, expense claims, absence However, if organisations are to make With this in mind, it is essential that management, project management and the most of the information within their the trustees and senior management collaboration. systems then they need to be able to within the not-for-profit lead and It is critical to think about all these extract data in a meaningful form and be support any system implementation — activities now so, for instance, you can able to quantify and measure objectives. it is after all imperative for strategic easily see how much is being expensed This will not only help focus attention on decision-making. It should also include against individual projects and how what’s important, it will help build the those individuals that are responsible much time is being allocated to them - foundation for a successful future. for the delivery of the fundraising or, analyse how successful a volunteer’s activities; that way you can be sure the fundraising event was whose expenses Rob Barr is divisional system will map more easily to what you may be reimbursing them for. director for Access’ not- you’re looking to achieve. Even if you are a small organisation for-profit division, with Of course, input from the IT with minimal requirements right now, responsibility for more department is also important but you need to think about how you’re going than 950 customers and remember this is not an IT-led project to be able to extend the system further the NFP product roadmap as with the best will in the world, they down the line. are not going to understand the Any worthwhile solution, whilst Sponsored by: intricacies of fundraising requirements. covering all the basics and the This requires the leadership of those with interconnected activities, will also the overarching vision and staff who are integrate with social media too. When involved in the delivery of fundraising strategically thought through, social on a day-to-day basis. media is a valuable tool for targeting
Top tips for choosing a fundraising system
an Jarvis, financial controller for the Canal and River Trust — one to less training and your team will be more engaged with using Iof the largest charities in the UK and guardian of 2,000 miles of the system fully. historic waterways across England and Wales — gives his views on choosing a fundraising CRM system. 3. Clear and usable reporting: The thankQ software was far “As a start-up charity two years ago, we wanted an established, ahead of everything else we saw in the way of reporting. This is proven product, with recognisable names using it. Whilst we had vital to making sure that you understand how successful your little experience of being a charity we wanted to be in a position campaigns are and where changes need to be made. to grow our fundraising arm. Access’ thankQ CRM system is playing a huge part in helping us on this journey,” he says. 4. Low risk: Products that are proven and already have a solid user Here are Ian’s five top tips: base are a must. thankQ has a stable of users, including well-known names and larger organisations, which bodes well for the future. 1. Clarity: Start out by being clear about what you want to achieve in terms of the big picture: set out to engage your suppliers and 5. Investment: Find out what level of investment is being listen carefully to how exactly they intend to help you achieve ploughed back into the software. What plans do they have, your goals. It’s always good to speak to other clients too. what new functionality has been released most recently, and are they keeping pace with changes in the not-for-profit 2. Intuitive: Look for a user interface that is easy to understand, sector. Pick a modular system, one that you can add to as your logical, user friendly, and an intuitive user experience. It will lead organisation grows. www.charitytimes.com 33 CHARITY FRAUD
Maximising Results for Charitable Purposes, which calculated this estimate, also found Threat of the sector is too often hit by identity fraud. This included job applicants lying on CVs and use of the charity’s name to fraudulently collect donations. Further evidence of the scale of charity fraud sector fraud was revealed in November 2013’s National Fraud Agency’s annual fraud indicator. It found one in three charities with an income of more than UK charities fall victim to £1.65bn worth of fraud a £100,000 had been defrauded over the year. Joe Lepper finds that the sector still has much previous 12 months, mostly through payment, banking, accountancy and to do to tackle this number identity fraud.
Anti-fraud culture UK charities fall victim to £1.65bn charging and staff exaggerating expenses But there is hope such incidents can be worth of fraud a year, mostly through low or falsifying accounts. brought down. The Minimising Fraud and value attacks such as charity shop workers The 2014 BDO and the University of Maximising Results for Charitable Purposes keeping back donations, contractors over Portsmouth report Minimising Fraud and report optimistically predicts the sector
34 www.charitytimes.com CHARITY FRAUD
could save £659m over the next two years messages to both the dishonest minority She has seen an increase in zero through simple improvements to counter and honest majority,” says Gee. tolerance policies that hammer home fraud processes. Gee adds: “Sometimes organisations the message that prosecutions will be Developing a preventative, anti-fraud confuse these messages. To mobilise pursued. Better financial controls and culture is key to achieving this goal, says the honest majority you need positive record keeping have also been noted. report co-author and BDO director of messages about culture, highlighting how However, she warns: “It is easy to say counter fraud services Jim Gee, especially much fraud costs and the good work that ‘we have a zero tolerance policy’ but as it is estimated just a 30th of the true money could be used. for example if the seniors managers are cost of fraud is detected. “For the dishonest minority you need permitted to use expense processes Gee says: “The old style attitude is to a different set of messages, backed by for personal gain this policy will be hope fraud doesn’t happen, report it to strong sanctions and detailing what will undermined. police and then prosecute. But with so happen to them when they are caught.” “Culture is more than words and little fraud detected that attitude only Button adds: “This really needs to spell policies. It’s actions and ways of behaving really scratches the surface. The best policy is to pre-empt it.” Charities looking to create an anti-fraud culture need to start by finding out to There is a perception that people would not do nasty what extent there is a fraud culture among things to charities. One religious charity said: ”We don’t contractors and staff. “This can easily be done through have fraud because we are a religious charity” anonymous surveys,” says Gee, who adds: Professor Mark Button, University of Portsmouth “This can pinpoint areas of the business where fraud is considered acceptable and even encouraged.” out in no uncertain terms there will be that prevent fraud not great documents He also recommends charities equip consequences and sanctions, such as and records.” themselves with the Chartered Institute of losing their job and going to prison. She also wants to see a greater Public Finance and Accountancy (CIPFA)’s Charities need to be keeping good awareness by all charity staff and among document Managing The Risks of Fraud, records of prosecutions and other relevant donors of the threat posed by those using also known as the CIPFA Red Book. statistics as well and promoting that.” the charity’s name to set up sham appeals This poses questions to organisations Gee warns though “that this culture for donations. This awareness boost was to assess their fraud risk covering areas change will not happen overnight.” He among recommendations made in the such as whether they carry out robust adds: “I previously used to work in the NHS CFG’s latest Charity Fraud guide. background checks on job applicants. and there was a similar change there to A whistle-blowing policy to create a BDO and the University of Portsmouth bring in this anti-fraud culture. It took eight culture that “enables people to speak have also created an online checklist based years to get that in place.” without fear on concerns over fraud” is also on the CIPFA Red Book, called the Fraud important, says Bradshaw. Resilience Assessment Tool. In addition, a Not doing well Button recommends charities ensure charity specific version of this tool being To what extent is the charity sector an independent whistle blowing service is developed with the Charity Commission backing this cultural change towards easily available to staff. He says: “At a basic and is set to launch this summer. fraud? Professor Button says that against level staff need to know where they can Professor Mark Button, director of other sectors the “charity sector is currently report suspected fraud. If you suspect your the University of Portsmouth’s Centre not doing well.” boss how do you report that? You can’t go for Counter Fraud Studies, says: “The “There is a perception that people to him or her.” assessment tool is scored out of 50. A really wouldn’t do nasty things to them. A Bradshaw also calls for a greater good score is in the mid 30s, a bad score colleague recently carried out a survey awareness of the threat of cyber fraud and is low to mid 20s. We found charities have among charities about fraud. One religious for charities to ensure virus software is up come out in that low bracket, as has my charity that responded said ‘we don’t have to date, passwords are changed regularly own sector of higher education.” fraud because we are a religious charity’,” and strong exit polices are in place when he adds. staff leave an organisation to ensure their Confused messages Charity Finance Group (CFG) chief online access is terminated. Once the extent of risk is assessed charities executive Caron Bradshaw says for most An improvement in financial controls are urged to put in place a tailored charities the threat of fraud is being taken among charities has also been spotted promotional drive offering “separate increasingly seriously. by Myles Kunzil, NCVO governance www.charitytimes.com 35 CHARITY FRAUD
consultant. CIFAS in November 2013, offers more This includes better auditing As the regulator, we have evidence of the need to invest in arrangements to track money as well as been calling on trustees to prevention. bringing in multiple sign off on cheques This found that for fraud under £25,000 and payments to ensure no one person heed these warnings and additional costs involved can raise the has the power to take money out of a step up their responsibili- total cost to nearly three times the amount charity. ties to protect their charity originally lost. This is through the cost “Grant giving organisations are also Michelle Russell, Charity of legal action, disciplining staff, loss of doing more due diligence and background Commission reputation and staff morale and in hiring checks so that those asking for money are replacements. who they say they are,” he says. Button adds that: “For low level fraud of But a key weakness that remains is a lack under £10,000 we found that sometimes of financial awareness among trustees to Michelle Russell, the Charity the organisation faced up to five times help spot fraud as well as highlight gaps in Commission’s head of investigations and that original cost.” protection, he says. enforcement, said: “As the regulator, we With such compelling figures it is clear This lack of financial knowledge among have been calling on trustees to heed the charity sector can no longer afford to trustees was also picked up in a Charity these warnings and step up to their ignore or pay lip service to the threat of Commission and Institute of Chartered responsibilities to protect their charity.” fraud. Accountants in England and Wales 2012 Further research by University of survey on financial control and risk Portsmouth’s Centre for Counter Fraud Joe Lepper is a freelance journalist management. Studies and published by fraud service the Cost of fraud
raud is currently costing the charity from charity collections. Fsector more than £1.65bn a year He was contracted by charities to hire but more than £659m of this loss could collectors to stand outside supermarkets be prevented through the application and organise collections, taking a cut from of improved counter-fraud processes what was collected. according to an academic report However he failed to declare most of the published by BDO, the accountancy and cash that came in. business advisory firm, and the Centre for Much of the money is still unaccounted Counter Fraud Studies at the University of for as it was taken directly from the buckets Portsmouth. and used to pay for holidays or shopping. The report, Minimising Fraud and In 2012 fraudsters conned several Maximising Results for Charitable Purposes, charities into parting with £685,000 for shows that the UK not-for-profit sector the distribution of letters by undercutting could better protect itself against fraud, the Royal Mail. freeing up additional resources for 1.3 million letters were left unsent and charitable purposes. then destroyed by the fraudsters. The report highlights that as much In addition to the cost, the charity also as £659million could reasonably be lost out on millions in unsent donations expected to be saved by the sector within two years, through that it would have received had the letters been sent. the adoption of improved counter-fraud measures, including Globally, the cost of fraud currently averages 5.47 per cent the development of strong counter-fraud cultures, the of expenditure and is up 20 per cent since the onset of the creation of meaningful deterrents and the revision of recession. processes that remove weaknesses which provide opportunity The report says that if the charity sector followed the for fraud. successful path of many organisations that have specifically Examples of some of the largest recorded not-for-profit targeted the reduction in the cost of fraud — where sector fraud cases include: reductions of as much as 60 per cent have been achieved In 2013 a businessman was jailed for three years and (including 40 per cent in the first year) — the benefits would nine months after pleading guilty to taking at least £213,000 be dramatic.
36 www.charitytimes.com AUTUMN CONFERENCE SERIES 2014
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Excellent fundraising for a better world PHILANTHROPY Over the rainbow?
Cathy Pharoah presents a new analytical inter- pretation of what trends in the philanthropy of the UK’s super-wealthy say £ about the future
The fortunes of the world’s super-wealthy continue to grow, an ever-more tantalising vista for much-needed philanthropy in our society. For example, Forbes (3/3/14) recently recorded a record 1,645 billionaires globally, whose current aggregate net worth of $6.4trn (£3.7trn) includes a cool additional trillion dollars on the previous year. The UK’s richest people account for £520bn ($874m) of this, according to The Sunday Times (18/5/14). Total giving by the UK’s super-wealthy stands at £2.4bn in 2014, as surveyed for the Giving List published by The Sunday Times alongside its annual Rich List. It was a record high, and it is claimed that the ‘super-wealthy’ are giving more money to charity than ever before. This is, of course, difficult to dispute as there is no definition of the ‘super-wealthy’. This article presents a new analysis of what the data might really be telling us.
A solid core of philanthropy Firstly, it is important to note that Giving List continues to reflect some robust, The evidence is not that the rich are giving more, but that sustained individual giving by the wealthy their accumulating riches still remain ‘beyond the rainbow’ in our society. It shows the commitment Cathy Pharoah, Cass Business School of donors such as Lord Sainsbury who appeared in the first List in 2005, and heads this year’s survey with giving of
38 www.charitytimes.com PHILANTHROPY
over £165m, though this was actually down on last year’s giving of £250m. Many other donors such as Roman Abramovitch, Robert Edmiston, Sir Elton John, George Weston, Johan Eliasch have also remained in the list since its first two years, a core of solid philanthropy making major contributions to science, culture, welfare and the environment. Of course regular appearance also reflects willingness to complete the survey forms. But many major donations are also unique events, as donors make a major one-off gift, or like Lord Sainsbury, spend their fortunes during their lifetimes. Such giving may in fact tell us little about what to expect in the future.
Is giving by the UK’s richest people going up? The first Giving List began with a survey response of just 30, but this year it reports giving by 280. This means that the annual topline figures can’t easily be compared because the sample is changing, but it is possible to track trends by compiling figures for the top 100 in the List each year (as ranked by proportion of wealth given to charity). The findings illustrated reveal a dramatic and unexpected picture. Firstly they show a huge annual fluctuation, reflecting how data on major giving is particularly easily skewed by one-off events. For example, most of the drop in 2011 was explained by three major donors who had already given away large amounts of their fortune in the standard. A difficulty in drawing firm rich are giving more, but that their previous year: Chris Hohn, Anurag Dikshit conclusions is that we have no figures accumulating riches still remain largely and Lord Sainsbury. on, for example, trends in the largest ‘beyond the rainbow’, out of the reach Secondly, the figures show that giving 100 gifts by value, or the total amount of good causes and fundraisers — by the top 100 (by proportion given) in of giving by a defined group of ‘the even if they had flocks of ‘happy little 2014 is not as high as the 2010 level, let wealthy’. Trends in giving by family bluebirds’? alone the heady peaks of 2009 and 2008. foundations, which are much less When we look at what these numbers subject to major annual fluctuation Professor Cathy Pharoah is co-director mean as annual growth rates (adjusted), as they represent giving from of the ESRC Research Centre for the overall trend in super-giving would investment income rather than direct Charitable Giving and Philanthropy appear to be moving sharply downwards. giving, would not indicate such a Research at Cass Business School This picture presents only one indicator, downward trend. 1 The evidence of albeit one which has become a national the Giving List, however, is not that the In association with:
1 Family Foundation Giving Trends 2014, produced by the Centre for Charitable Giving and Philanthropy and the Association of Charitable Foundations, and supported by Pears Foundation, was published at the end of June
www.charitytimes.com 39 PHILANTHROPY
The UK has always been at the forefront of charitable giving. In 2011, Mind the public donations to charitable causes amounted to £11.7bn as the number of charitable organisations approached 150,0001. Unfortunately, due to austerity measures arising from the economic gap downturn, levels of altruism have declined. Philanthropy in the UK is distinctive for the way the context for charitable activity is changing and how donors are responding Nicola Davies looks at bridging the philanthropy to it. We look at the three principal gap between demand and supply through social factors to consider in efforts to increase philanthropy: individuals, corporate investment donors, and government. Individual characteristics play an important role in determining who will donate their time or money, as well as who charities might benefit from targeting. Indeed, the Charities Aid Foundation (CAF) stated in their report, NCVO/CAF (2010)2, that upper middle class women aged 45–64 are most likely to give, while young men aged 16–24 have the
40 www.charitytimes.com PHILANTHROPY
lowest rates of giving3. annual philanthropic giving, hovering Donors are now shifting attention The Behavioural Insights Team of around only one per cent of the gross to how foundations can use all their the Cabinet Office also provide insight domestic product (GDP) and coupled assets, including endowment, to achieve into factors important to individuals. with increasing demands for charitable their goals. There also appears to be They have identified four behavioural activities. The increase in demand a consensus amongst both the UK insights that could be used to sustain arises principally from the progressive government and the opposition about and improve the degree of altruism and withdrawal of the government from the introduction of social investment the amount of charitable giving in the the provision of social welfare, allegedly as an alternative way of enhancing and community4. These include making the because of the downturn in global sustaining the charity sector in the task of donation process attractive and as easy as economic activities resulting in austerity delivering social benefits to communities. possible, appropriately timing appeals for and retrenchment measures. One major achievement is the donations, and encouraging an association In addition, there has been a introduction of Social Investment through between giving and social norms (that is, significant increase, since the turn of instruments such as the Big Society making donations the norm). the century, in armed conflicts and Capital (BSC), which is the first of its kind political instability in several countries. in the world. Social Investment presents Corporate donors This results in displacements of large an alternative way of perceiving the The Centre for Charitable Giving and numbers of people and presents a global creation of social benefits as opposed Philanthropy (CGAP) reported that challengefor philanthropists7. Donors have to the traditional method of viewing corporate donations to UK charities are responded by forming Working Groups philanthropy as the only means of estimated at around £1.6bn annually5. such as the Centre for Social Justice, achieving results. According to the latest Coutts Million which are non-partisan and comprise Social investment is an avenue for Pound Donors Report, UK philanthropy prominent academics, practitioners and obtaining returns that focus not only on is buoyant. Indeed, the highest level philanthropists. financial returns but also on the longer of £1m-plus donations since the 2009 While the performance of the charity term impact of the investment on society. financial crisis was in 2012, rising 9 per sector in the UK is impressive, there is Therefore, the donor community in the UK, cent from 2010/11 to £1.35bn in 2012. still a great deal of work to be done supported by the government, have taken Not only did the value of donations in terms of government intervention. on board the challenge of providing the increase, but so did the average donation Debates about major philanthropy right type of finance that will encourage size. More than half (56 per cent) of all both inside and outside the House of recipients to engage in activities that million pound gifts were worth £2m or Commons have often focused on the provide lasting benefits to the community. more. Higher Education remains the nature and scale of donations. The BSC commenced in 2012 with a most popular destination for million pound donations, accounting for 42 per cent of all million pound donations in Philanthropy buoyant 2012. Arts and Culture fell slightly from 8 per cent of all donations in 2010/11 to he sixth annual Coutts Million Pound Donors Report, in association with the 7 per cent in 2012. TUniversity of Kent, found UK philanthropy is buoyant with the highest level of The increase in corporate donations has £1m-plus donations in the UK in 2012 since the financial crisis in 2009, rising 9 per cent been influenced by the growing realisation from 2010/11 to £1.35bn in 2012. Not only did the value of donations increase but so of corporate social responsibility — did the average donation size as more than half (56 per cent) of all million pound gifts the role organisations are expected worth £2m or more. to play in the community. The Guide to Higher Education remains the most popular destination for million pound donations UK Company Giving (DSC, 2011)6 gives accounting for 42 per cent of all million pound donations in 2012 while Arts and advice to companies on the best models Culture fell slightly from 8 per cent of all donations in 2010/11 to 7 per cent in 2012. organisations should adopt in the For example, they are: fulfilment of their social responsibilities Working together — UK donors are working together more than before to tackle and suggests yardsticks for the measure- emerging challenges. ment of Corporate Community Investment Foundations using all their assets — While debates about major philanthropy often (CCI) — philanthropic contributions, focus on the nature and scale of donations, greater attention is being given to how whether in cash or in kind, given to the foundations can use all their assets including endowments to achieve their goals. voluntary and community sector. Social investment — The UK is one of the leading countries developing the thinking However, this is against the backdrop and practice of social investment which aims to generate measurable social and/or of the static nature of estimated environmental impact as well as a financial return. www.charitytimes.com 41 PHILANTHROPY
Foundation grant-making rises by 10% in real terms
oundation grant-making has risen by 10 per cent in real grant-making, the report also provides fresh insight into the size, Fterms, despite a drop in income of around the same amount – shape and nature of foundations’ contribution to UK civil society. demonstrating the adaptability, resilience and vitality of the UK’s The picture that emerges is of a deeply diverse sector, using charitable foundation sector in the face of falling donations. its independence in order to respond flexibly to need, make bold The finding has emerged from the first of a new series of interventions in line with its charitable purposes , and support annual research reports, Foundation Giving Trends, led by Professor advocacy. Cathy Pharoah of the Centre for Giving and Philanthropy at Discussing the value of the report, which also draws on the Cass Business School, published by the Association of findings from a ACF Member Survey and features a range of guest Charitable Foundations, and substantially supported by the commentators, ACF policy advisor Richard Jenkins, says: “Over the Pears Foundation. coming years this programme of research will track key indicators The report reveals that foundation giving to charitable of the health of the foundation sector: its giving, its income and causes grew by £271 million, or 10 per cent, whilst income fell by the value of its assets. the same amount. “This vital research will help us see the patterns of change in This highlights the importance of foundation assets, which have order for philanthropists, practitioners and policymakers to make enabled several larger foundations to fund ‘counter-cyclically’ better decisions based on an understanding of the factors that through a time of elevated need and reduced government drive the sector.“ expenditure. Professor Cathy Pharoah adds: “Better data on philanthropy is However, such spending decisions have been made at a time increasingly vital. It helps provide a realistic context for assessing of low investment returns, intensifying the pressure on trustees to the feasibility of political aspirations for the role of private balance today’s pressing issues with maintaining their spending philanthropy in public welfare provision. We also need to know power for future generations. whether philanthropy is growing at a time of increasing private As well as ranking the top 300 foundations by the value of their wealth, but continuing social inequality.”
capital of £600m obtained from dormant development of the Social Impact Bond 1 Charities Aid Foundation (2012): UK Giving 2012 bank accounts and investment from and the introduction of a UK Community online: www.ncvo-vol.org.uk/sites/default/files/ the Merlin Banks. It was established Reinvestment Act to encourage financial uk_giving_full_report_1211.pdf 2 NCVO/CAF (2010) UK Giving 2010: An Overview of with the aim of providing wholesale institutions to improve performance with Charitable Giving in the UK 2009/10, West Malling: banking products such as loans equities under-invested societies. CAF.www.cafonline.org/pdf/UK%20Giving%20 and bonds that will facilitate the The UK is one of the leading countries 2010_101210.pdf development of a sustainable social developing the thinking and practice 3 Ibid 2 (pp. 15–17 & 33) 4 investment market in the UK8. The of social investment. The next biggest Ibid 2 (pp. 8-13) 5 Catherine Walker and Cathy Pharoah, with Marina difference between the activities of challenge is generating measurable Marmolejo and Denise Lillya (2012) CGAP Briefing the BSC and other traditional banking social and/or environmental outcomes Note 9. UK corporate citizenship in the 21st century. institutions is that the BSC seeks to in addition to financial return. Centre for Charitable Giving and Philanthropy. develop an investment market in which Investors need to have a transparent www.cgap.org.uk/ 6 the ways that investees generate profit is way of assessing these outcomes and DSC (2011) The UK Guide to Company Giving 2011/12 (eighth edition), London: DSC. closely aligned to positive social impact. currently there is no universally accepted 7 Adrian Sargeant & Jen Shang (2011) Growing The creation of the BSC is only a part measurement scale, although the Social Philanthropy in the United Kingdom A Report on the 12 of the Government’s vision to provide Reporting Standard (SRS) and Impact July 2011 Growing Philanthropy Summit. Bristol: a structure and framework for a social Reporting & Investment Standards (IRIS) University of West England. 8 investment sector. According to the are the most popular metrics adopted by The Big Society Capital Social Investment Task Force, created by large investors. www.bigsocietycapital.com 9 Social Investment Task Force (2010) Social 9 Her Majesty’s Treasury the Government Investment Ten Years On. Final Report of the Social aim to raise at least £14.2bn for social Dr Nicola Davies is a freelance journalist Investment Task Force. London: HM Treasury investment obtainable from the £65.6bn 10 2006–07 investment assets held by charities – NCVO capital10 in UK philanthropic foundations, In association with: Civil Society Almanac (2009) 11 institutionally managed assets in the UK, ISA funds at August 2009, Investment Management Association: grant funding, and £86.1bn11 estimated to www.investmentuk.org/statistics/fund_statistics/ be invested in individual savings accounts. default.asp (accessed on 29 September 2009) Other government initiatives include the 12 www.social-reporting-standard.de
42 www.charitytimes.com Making progress
David Rowe says if we want to succeed in converting unnecessary jargon and superlatives: we more people to philanthropy we need to match their need to provide simple cost-effective structures that allow people to become expectation that giving money should be easy and philanthropists easily and with little understandable cost. We then need to explain where monies philanthropy can best be spent or ‘invested’ and show the impact of that Philanthropy continues to UK is considerable and to a large extent giving, focussing on long-term benefits. be buoyant with an increasing number avoidable if more of these merged their New and existing philanthropists should of banks, solicitors and other advisers administration and shared facilities. be able to commit to projects that address enhancing their offering to further enable The advisory community have been the problem that is at the heart of a social giving. However, for all the evidence of poor at explaining the outcomes and issue with confidence. Anecdotally we growing interest in philanthropy, are impact of what is proposed. The focus know that people won’t normally invest if we delivering the right basic solutions can either be too much on the immediate there is no confidence in the outcome — and are we making giving easy or too benefit and not on the long-term change philanthropy is no different and therefore complicated? a better description of the long-term Over the last 25 years I have seen many benefits and an undertaking to report wealthy individuals consider creating a on the facts of success, or failure, needs long-term pool of money from which to New philanthropists feel to improve. The role of banks, or other give to causes they believe in. I have seen what they are giving may advisors, is not just to scale up, but rather too few actually follow through. Why? not be really effective. There to demonstrate that a project will work There are, no doubt, many reasons, but the is a balance to be struck and focus on measurement in order to two reasons that I think are at the heart of provide proof. David Rowe, UBS this conundrum are that the process is too In conclusion, if we want to succeed in complicated and the outcome too unsure. converting more people to philanthropy The ‘complications’ start almost that well considered and researched we need to match their expectation immediately, typically from how to set-up projects can deliver; or the explanation of that giving money should be easy and a charity or from an advisers enthusiasm impact is simply not clear, if measured at understandable. Whilst philanthropy for maximising the social benefit leading all. Not surprisingly new philanthropists is undoubtedly increasing, compared to too a detailed, and even academic, feel what they are giving may not be really to the resources available we have expose of what projects to commit to. effective. Of course, there is a balance not really made much progress since to be struck as excessive measurement Andrew Carnegie said: “I resolved to stop New philanthropist can be seen as a waste of resource that accumulating and begin the infinitely To a new philanthropist these complications could be better used elsewhere; getting more serious and difficult task of wise act as a barrier. They also come with finan- that balance correct so that impact is distribution.” cial costs that for some may be the straw easily understood is key to increasing David Rowe is managing director that breaks the camel’s back. However philanthropic giving. at UBS Wealth Management there are simple solutions and they can In association with: start with the more effective pooling of Long-term monies committed to philanthropy. The In order to capture more of the effort and money that is spent in adminis- potential philanthropy giving we need tering in excess of 180,000 charities in the to simplify our language, remove the www.charitytimes.com 43 INVESTMENT ANALYSIS Good investments
Andrew Holt analyses Charity Times research of high inflation and owning either that shows charity investments are of a broad bonds or cash. asset allocation but with a view to change Dose of diversification investment direction going forward It is therfore beneficial that charities show a healthy dose of diversification: equities come top at 47 per cent, alternatives not far behind on 24 per cent, property is on In 2012, the Charity Finance Group in the UK and foundations in Europe. 9 per cent, fixed income of 6 per cent and issued a report, Managing in the new The picture of charity investments is of a multi-asset/balanced 3 per cent. Such 80 normal — a perfect storm? which broad asset allocation and, in general, one a positive diversification, it would seem, 70 highlighted that leading charities had of long-termism, with a view to change highlights the understanding of charities been suffering from a ‘perfect storm’ of investment direction going forward. surveyed and their investments. The level 60 increased demand and reduced funding Of the charities surveyed few hold of alternatives is an interesting one, in 50 and support. One of the conclusions was cash: only 4 per cent. Nothing destroys terms of a potential increase, and could more should be made of investment a charity investment portfolio like see growth going forward, as is indicated 40 opportunities. holding pure money. One only has to in the future outlook. 30 This is heeded by the charities surveyed. look at what happened in the last century Within the asset allocation, the 6 per The field of investments in our survey is to many charities and endowments, cent of fixed income proportion is, for 20 a significant one: totalling £64.2bn, caught out, whether in the First or Second both charities looking to invest and 10 including some of the leading charities World War or the 1970s, by a combination fund managers, one to focus on for 0
Charities and their views on investment approach: changes over the recession
Charities were asked: “How has your investment approach changed over the recession?”
Become more 0 conservative 19% 08 Decreased 07 allocation to alternatives 6% 06 Restructured Increased 05 Investment Portfolio allocation to No significant alternatives 19% Other 6% 31% change 50% 04 03 02 01
44 www.charitytimes.com INVESTMENT ANALYSIS
Breakdownother costs of of putting charities on assets the event. under administrationrestructured by asset their allocationinvestment portfolios, Direct investments make up the lion share of invest- ments by vehicle, with 57 per cent using this approach Other, 8% 80 70 Property, 9% Multi-asset / Alternatives, 24% balanced, 3% 60 charity portfolios. Bonds have produced substantial returns over the last 15 50 Fixed Income, 6% years, but as inflation increases, the Cash, 4% 40 purchasing power of fixed income decreases and real returns can be poor. 30 Direct investments make up the lion share of investment by vehicle in Equity, 47% 20 the survey, with 57 per cent using this approach. This makes sense, given that 10 each charity has different investment 0 requirements and in turn a wide range of portfolios with different risk profiles, return objectives and income yields. We found in this survey that 71per cent most have increased their allocation to Segregated accounts and pooled hold 10 per cent or less of their allocations alternative products: with an increase to funds are 22 per cent and 21 per cent in ethical investments or funds. This is alternatives to 19 per cent and a decreased respectively. This latter figure, can in because many SRI funds have traditionally allocation to alternatives of 6 per cent. part, be explained due to the fact that performed less well than key asset classes. While this indicates some sort of shift funds invested for the short and medium But SRI advocates would point to that towards alternatives, it shows a level of term should be relatively risk-free as changing, with some substantial returns to caution towards alternatives that is not charities will want to avoid sudden drops boot. A point though lost on our surveyed shared by American counterparts. A recent in capital values which could reduce their batch of charities. SRI in charity investment poll by Boston-based consulting firm available funding. portfolios is therefore one still to be won NEPC highlighted that foundations in the And a drop in capital value for funds and for SRI-inclined asset managers, it is States found 81 per cent were planning invested for the longer term is less critical one that could be an opportunity to put to increase exposure to multi-strategy because such investments can be held a strong argument. funds, credit-linked funds and specialty until their value has recovered. Many ETFs are seldom used as well. 93 per hedge funds. Such an aggressive outlook respondents indicated the importance cent of respondents said they made up is not shared here. That said, 44 per cent of long-termism, in additional written 10 per cent or less of their allocation. are looking at a change in investment detail when qualifying their approach. This is a shift from some years ago, when direction going forward, 31 per cent not, ETFs were able to address the narrow and 25 per cent unsure. Charities that Unpopular ethical investment management approach of have a permanent endowment must keep Social and ethical investments are some charity investment, something, as the capital fund invested. Only the income frequently being mentioned as a central we indicate is not really an issue in the earned from the investment of the capital part and essence of the charity sector, current analysis. fund can be spent on the charity’s aims. 01020304050607080 whether via negative or positive screening. Index funds are more broadly but lowly And charities with permanent Comic Relief was criticised in a BBC spread: 38 per cent hold less than 5 per endowment should be aware that some programme for not employing an ethical cent, 38 per cent hold 5-10 per cent, 15 assets may be more likely to provide investment approach and in fact investing per cent for 11-15 per cent and more than capital growth over a long-term period in weapons firm BAE Systems. Comic 15 per cent accounts for 8 per cent. while others might provide better Relief’s effective investment approach Since the financial crisis, 50 per cent of income returns. This means that it is means that every pound donated goes to charities have seen no significant change important when putting together a the allocated charities, as the investment to their investment approach while 19 per portfolio of investments to balance: the returns pay for the administration and cent have adopted a more conservative need for enough income to meet the returns pay for the administration and stance. Of the 31 per cent that have charity’s current needs; and the need www.charitytimes.com 45 0
08
07
06 80 70 60 50 05 40 30 20 10 04 0
03
02
01
INVESTMENT ANALYSIS
Charities and their views on financial reasons for investing the main, or only, source of income. Charities spending above 3 per cent Charities were asked: “For what financial reasons do you invest?” of the value of their long term investment portfolios each year face the material risk of eroding the real value of their capital, according to a paper: Sustainable Portfolio ‘Withdrawal Rates’ for Charities Other, 33% by Newton Investment Management. The paper found that even a small over or under-distribution can have a significant To boost income, 67% effect on the real value of a portfolio over
To finance a 20 years. particular project, 33% With 2 per cent taken out of the portfolio above the 3 per cent sustainable level its value would be reduced by 33 per cent over the period. Conversely, under- To add to your reserves, 47% spending by 2 per cent per annum would add nearly 50 per cent to the real value of the portfolio after 20 years. This has real implications that ties in with the survey results. Having reviewed all 10 and 25-year periods over the last 113 to increase the value of the investment over three and 10.3 per cent over one years, Newton found that holding more in (capital growth) to produce a sufficient year. Impressive, considering the context. equities increases the overall probability level of income for future beneficiaries. Targeted returns averaged out to 9.5 of maintaining the purchasing power The satisfaction levels highlighted in the per cent, across the board over the same of invested capital, albeit at the cost of process part of the survey (see page 47 timeframes. greater volatility in the short term. onwards) indicate that asset managers are This is indeed a decent target return A point highly relevant to charities dealing with such matters impressively. given the economic situation. Clearly and asset managers connecting with these are challenging to asset managers charities in this survey. The implication Income boost to offer such returns, but it highlights of the Newton analysis is that charity And here, 67 per cent of charities use what big charitable organisations trustees should address this topic as part investments to boost their income; 47 per expect. It also reinforces that charities of the regular review of their portfolio; cent to add to their reserves; 33 per cent to are moving away from their conservative a key area for this survey and a key area finance a particular project; with another allocation mind set. Some respondents for some asset managers and charities to 33 per cent listing issues around helping stated they are comfortable with look at shifting the emphasis for their own to: “Boost the distribution of money such Consumer Price Index (CPI) + 4 per cent, return benefit. as helping charities we fund and help and on a rolling 5 year basis, as a long-term On the wider investment front, there is to generate the maximum return for our objective for either a traditional ‘income a hope we have entered a new investment grant-making”. and capital growth’ or ‘total return’ era that could open up a period of When it comes to using the number requirement. dynamic asset allocation. This was of fund managers, charities use the full highlighted in the eras identified by the potential of investment expertise, with 63 Challenging assumptions Barclays Equity Gilt Study that 1982-2008 per cent of respondents using 10 or more The most recent financial backdrop has was The Great Moderation; 2008-2012 mangers at any one time; 6 per cent use increasingly challenged the assumptions The Great Crisis; with 2013 onwards being between 7-9; 13 per cent between four investors make about future returns. something of a question mark. and six; and 19 per cent use between one The key question for charity trustees In Euro Vision – Equities Growing Up, and three. This in part explains the range is: what is a reasonable level of annual Peter Oppenheimer, chief global equity of investment approaches. withdrawal to take from a portfolio strategist at Goldman Sachs, and his On the investment returns, they present without depreciating its long-term value? team, argue that there will still be enough a real challenge to asset managers going This is particularly relevant to the momentum to generate a 15 per cent total forward. Historical returns ranged from endowed charitable sector in the UK, return through the coming year. The future 8.9 per cent over five years, 8 per cent where investment portfolios represent could well look bright.
46 www.charitytimes.com INVESTMENT ANALYSIS
Favoured committee Within the process of charities getting The to asset managers, there are a number of things that investment professionals should observe. It is interesting therefore that it is an investment committee (63 per cent) that is the predominantly favoured process route by which to choose an asset manager. This has obvious advantages: a separate committee gives charities the option of having committee members Andrew Holt analyses the data which shows how with investment acumen who are not charities go about selecting an asset manager necessarily part of the main board, thus adding a level of both expertise and independence, perhaps in the role of the chair for example. It highlights that any All major charities invest, and to the charity’s needs, which respondents potential asset manager is dealing with investments have become a vital source in our survey understand fully. a committee of potential experts focused of funding and financing for charities. In that, when investing, a charity must on the investment process. During the recession many charities seek the best financial return appropriate After investment committee comes the looked to make the most of their existing to risk and trustees should consider their finance director (44 per cent), sometimes investment assets, by looking at possible charities particular circumstances and in combination with a committee and then wider investment opportunities. At the determine the appropriate level of risk investment director at 13 cent. same time, policy and practice relating and return. This makes sense: finance directors to investments have moved on and many For charities there are usually three and investment directors can helps charities now seek to invest in a way that things to consider: firstly, the time frame charities shape their strategies and can challenge traditional convention of over which it wants to invest. Secondly, maximise returns in the wider context of risk-return. it should think about the risk it wants the charity’s finances. Choosing a fund manager whose to take. A factor to consider here is the key philosophy involves exposure to risk or And thirdly, a cliché but truism, that reason in the survey for either the one that offers more stable, long-term charities need to recognise that there is investment committee or finance director income on investments will come down no such thing as a free lunch. having this role is explained as good
Charities and their approach to choosing investment managers
80% 80 The key reason in the survey 7070% for either the investment committee or finance 6060% director having the role to 5050% decide was good 4040% governance and efficiency 3030% 2020% 1010% 63% 44% 13% 13% 6% 0 0 By investment The finance Investment Other Trustees committee director director
www.charitytimes.com 47 INVESTMENT ANALYSIS
governance and an efficient and effective choosing an asset manager, which includes be borne to achieve the said return. process. This reflects a good positive using an investment advisor. Trustees Equally where portfolios are being run approach that charities are taking time account for only 6 per cent. for “rainy day” scenarios, charities should determining the right investment policy Trustees have overall responsibility for consider what scenarios would result and much thought on the part of the the investment of a charity’s funds. This in the need to dip into these assets and finance team and trustees. means that they have a crucial role to play importantly how the portfolio of assets will in making strategic decisions about how have performed going into this scenario. Trustees and investment to use a charity’s assets to achieve its aims, Working along the investment decision There is then a batch of others (13 per even if they are not the central players, as process, when it comes to the requests cent) in addressing the question of indicated here. for proposals, the finance director takes Yet trustees are seldom investment charge: with 47 per cent accounting for experts, and this should be also kept in this process, followed by investment mind, and the reason for their lesser status committee at 27 per cent, then investment An interesting set of notes in the overall process. consultants at 13 per cent. Others account made by some respondents, Where portfolios are earmarked for for 13 per cent. highlights too much jargon future use, charities have to carefully An interesting set of notes made by consider the timeframe for completion, the some respondents, highlights there is and opaque language flying required capital value, and the impact of frequently too much jargon and opaque about in the investment postponement and therefore the required language flying about in the investment industry investment return and level of risk that can industry, but a true adviser expert can explain the options in a clear and easy- to-understand manner. An important Charities reported the maximum number of investment managers factor for asset mangers to take note of here: keep information simple and understandable. 80 It is often said that charities seldom look 10+ 63% 70 to change their investment manager as 60 much as they should do, and so it proves in 7-9 6% 50 the survey. Changing a manager is as far out as every five and ten years’40 accounting 4-6 13% for 75 per cent of respondents. 30This seems to have a direct correlation with20 how 1-3 19% satisfied charities are with their investment 10 managers. Here, 56 per cent are very satisfied;0 44 010% 10%02 20%03 30%04 40%05 50%06 60%07 70%08 80%0 per cent satisfied and 33 per cent fairly % of Charities satisfied, meaning that no respondents were unsatisfied. This means a well- Charities reported the average number of investment managers deserved slap on the back for asset managers working in partnership with sector organisations. 80
10+ 19% 70 Benefit paradox 60 It does though present a paradox for asset 7-9 13% 50 managers: that it would help charities, and benefit investment managers,40 if the money 4-6 6% being managed could be more30 available more frequently. 20 1-3 19% But charities feel so satisfied with the 10 service they are getting, they seldom look to change. In short, asset managers0 are a 0%01 10%02 20%03 30%04 40%05 50%06 60%07 70%08 80%0 victim of their own success. On another % of Charities level, the important role an investment
48 www.charitytimes.com
0
10
20
30
40
50
60
70 80
INVESTMENT ANALYSIS
Frequency charities look to change their investment manager Satisfaction with the work of asset managers fed Charities were asked: “How often do you typically look to change your investment manager?” through evidently into the approach charities take to fee structures Once a year, 6% Every 6 months, 6%
manager plays in working with a charity to understand its investment objectives and provide solutions tailored for the specific Other , 50% Every five years, 25% requirements of the not-for-profit sector is clearly identified here. This satisfaction with the work of asset managers fed through evidently into the Every ten years, 25% approach charities take to fee structures. When it comes to the importance of fees, Every two years, 31% the most appropriate choice was summed up by 56 per cent of respondents who agreed with the statement: “Fees are considered, but only to check we do not overpay for a strategy we have decided to invest in”; showing that one eye is Charities reported satisfaction with received investment expertise kept on fees, but they are not in the main, a point of focus when choosing an investment manager. At 25 per cent is: “We do not pay attention to fees in the decision making process”, emphasising the clear distance Satisfied, 13% away from fees being a factor, with a quarter essentially dismissing it altogether. Very satisfied, 56% And 19 per cent agree with the statement: “Fees play an important but not decisive role in the decision making process”. This is clearly a positive reflection on Fairly Satisfied, 44% asset management firms in regards to their offerings and charges. If they were excessive, it would have been noted. It was also noted by some respondents that some charities offer ‘pre meetings’ to allow the prospective investment managers an opportunity to ask questions and to gain the complete picture. This manage its investments it is important to Having the right arrangements, be that will allow the charity and fund manager remind them where possible, to constantly through an investment committee or not, to gauge the interest and meet in an review their effectiveness and be prepared so that trustees can fulfil both their duty of informal setting. This is something for asset to change, if necessary. This is a vital final care and maximise return on investments managers and charities to find out more point for charity finance directors and to allow them to meet their charitable about, as it could benefit both parties in asset managers: that they can remind objectives, is vital, especially in the current, gauging the best approach going forward. charity trustees that doing something changing, climate. From a fund management perspective, because it is what has always been done is whatever arrangements a charity has to not good enough. Andrew Holt is editor of Charity Times www.charitytimes.com 49 CHARITY CEO PAY
Clarity on executive pay
Maurice Mcleod says Government, the European Union, United Despite the negative headlines, the transparency is the key Nations and councils. inquiry found the vast majority of charities Charity Commission chair, William do not have any paid staff and, that even to arguments over Shawcross, warned that boardroom among those that do, the salaries quoted charity CEO pay excesses were risking the reputations of by the media are not typical. charities. It was found that even within charities He told The Daily Telegraph: “In these which paid salaries, executive pay was difficult times, when many charities are 25-45 per cent lower than equivalent roles Charities need to be more experiencing shortfalls, trustees should in the private sector. The remuneration transparent about the salaries of their consider whether very high salaries are strategies at most charities were designed senior staff if they want to retain public really appropriate, and fair to both the to attract and retain people who were trust, according to an inquiry into donors and the taxpayers who fund already committed to the charities’ work or executive pay by the National Council for charities. Disproportionate salaries risk who were working at similar organisations Voluntary Organisations (NCVO). bringing organisations and the wider within the sector. The inquiry, launched in the spring charitable world into disrepute.” On a pound for pound basis, charities and backed by the Charity Commission, Charities with yearly incomes exceeding are not competitive with the private sector. suggested that charities should publish £500,000 are already required to have In some circumstances, the inquiry the salaries of their senior staff on their their accounts independently audited. found that charities could not operate websites and this information should Annual reports have to declare how many effectively without highly skilled staff. be no more than ‘two clicks’ from their staff are paid over £60,000 per annum With the increasing complexity of many home pages. or more, in salary bands of £10,000, but charities paying higher salaries to attract Charities should also publish data charities are not obliged to name these top staff was becoming increasingly showing how CEO salaries compare to staff or specify their roles. necessary. the median pay for other staff members It was in the wake of stories like this In these cases though, the Inquiry so that the public can get a clear picture that NCVO brought together trustees suggested that the reasons for paying of how pay was distributed. and others to consider executive pay and above normal charity rates should be NCVO launched the study in August last draw up guidance. NCVO’s Inquiry panel explained clearly so that the public year after negative stories in the national represented a diverse range of views on understood why this had happened. media about the levels of pay that some the issue of senior charity staff pay. Transparency was a recurring theme of charity CEOs receive. A report at the time The inquiry tried to balance these the guidance. The inquiry recommended showed that 30 executives at Britain’s top divergent views, which ranged from that larger charities develop and publish a 14 foreign aid charities were earning six those who thought charities should be remuneration statement explaining their figure salaries. There were also 192 staff entirely led and run by volunteers to those pay strategy and stating the individual members earning over £60,000 and in who believed the pay of senior staff in salaries of their highest-paid staff by some cases senior staff salaries had risen charities needs to be consistent with their position and name. despite falling revenues and donations. peers in other sectors in order to attract Rather than hiding this information Many of the charities in question were and retain professional expertise. away in the basement of their websites, heavily reliant on public funds, having The starting point for the inquiry was the Inquiry called for charities to adopt received more than £1.1bn of public that all charities exist for public benefit a ‘two clicks to clarity’ strategy so that money over the preceding three years and ultimately trustees are ultimately information was easily findable. from a range of sources, including the accountable for decisions about pay. It argued that giving trustees the tools
50 www.charitytimes.com CHARITY CEO PAY
Where charities feel they need to pay high salaries in order to recruit the right people, they should be clear in explaining this to donors Martyn Lewis, NCVO
and confidence to explain executive pay in data on high pay in charities, which chief executive pay, from a large, rigorous, this transparent way would improve public showed, the charities most likely to pay randomly selected sample, overcoming understanding and confidence in charities. high salaries were independent schools, the limitations of simple benchmarking Martyn Lewis CBE, chair of NCVO, who business and professional associations and surveys. The Inquiry recommended a set chaired the Inquiry panel, says: “Many of healthcare providers. of principles for setting charity pay and the charities the British public are proudest NCVO estimated that only 1.9 per cent suggested that the overall aim should of are major operations employing of all charity employees earn over £60,000, be to offer fair pay to attract and keep thousands of people and managing tens compared to 4.5 per cent of public sector appropriately qualified staff. or even hundreds of millions of pounds. employees and 6 per cent of private Overall staff pay, the particular skills They need highly skilled professionals sector employees. needed and challenges recruiting suitable in order to run to the highest standard Around half of all charities that pay any staff all needed to be considered when possible and make the best use of our employees over £60,000 are organisations setting executive pay levels. In some donations. But we believe that where they less likely to be thought of by many as cases the Inquiry found that the prestige feel they need to pay high salaries in order charities, such as government bodies of particular senior roles was so great to recruit the right people, they should be with charitable status, charitable housing that executive pay did not need to clear in explaining this to donors. associations, and independent schools match other sectors. “Doing this will make it clear that we and hospitals. Senior charity staff are more likely to believe in being open and honest with The data on pay was gathered as part receive other benefits like honours or donors. We don’t want anyone ever to be of NCVO’s sampling of 10,000 charities’ kudos and that this would sometimes able to claim that charities have hidden accounts that it uses to create the UK make up for slightly smaller salaries. or obfuscated information about their Civil Society Almanac, the definitive Transparency on charity CEO pay though, salaries. I hope charities will consider this guide to charities’ finances. This data will is the key. And one all charity chief an extra opportunity to explain their work continue to be collected and updated executives should get to grips with. and the difference that they make.” annually providing a highly reliable and The report contained analysis of new authoritative source of data on charity Maurice Mcleod is a freelance journalist www.charitytimes.com 51 BANKING AND THE SECTOR
The borrowers
Paul Palmer and Harry Pope analyse the issue of For example where an appeal only banking and charities, noting that charities should reaches 60 per cent of its target, a loan to start the work could make sense consider borrowing, but, should understand why and reluctant donors may well be then prompted to give as they can see the project in development. In these circumstances, trustees should consider borrowing money to bridge the gap. Many charities may be an attractive proposition for lenders, especially those with a history of innovation and that deliver a strong social impact. Now that banks have become more cautious about unsecured lending, it is becoming a more expensive and less accessible source of funding. However, charities with assets that can be pledged as security are still attractive customers. The most common form of borrowing for charities is a loan secured on fixed assets. The facility normally takes the form of a term loan, an overdraft or a mortgage. There are two further types of loans that are less commonly used, namely a Charity Trustees are often charitable mission then the additional cost loan secured on an investment portfolio, reminded that, with the exception of of borrowing may be justified and then and a bond issuance (debt financing ethical criteria, it is their duty to maximise charities should be looking to borrow at through the issuance of a bond). the value of their investments. Surely, the lowest rate. Due to cost, the latter is normally the therefore the same should apply to the preserve of very large charities and most question of borrowing money. The duty Why borrow? commonly found in the social housing of trustees must be to ensure that their Charities are having to consider ever sector. cost of borrowing is obtained at the lowest more carefully and imaginatively what possible price. opportunities there are to fulfil their Inappropriate for charities? Social finance is opening a new market objectives. There are situations where such a strategy as an attractive alternative but is still in New initiatives normally would be deemed wholly out of place. its infancy and there have been recent require funding, which may not be The obvious point to make is that where adverse comments as to its cost over bank achieved through the traditional routes there is a risk that a charity would not be borrowing. If a case can be made that of fundraising alone, putting the able to repay the debt then any type of bringing forward strategic investment completion of any new initiative or lending facility should not be considered; is significantly complementary to the project at risk. borrowing to pay bills, or fund deficits
52 www.charitytimes.com BANKING AND THE SECTOR
without the means of generating sufficient income to cover the loan Borrowing can be a complex issue requiring a level of should raise concerns for trustees. expertise that some incumbent trustees may not have, A loan should only be considered if such as, not understanding the terms of the borrowing it is consistent with achieving the Paul Palmer, Cass Business School & Harry Pope, UBS objectives stated by the charity and is strategic or long-term in the impact it can achieve. Borrowing can be a complex issue • There may be no arrangement fee 2. Have the charity Trustees considered requiring a level of expertise that some other options for raising the money that incumbent trustees may not have, such • A loan will not distort a charity’s overall the charity needs? as, not understanding the full implications asset allocation of its investment of the precise terms of the borrowing portfolio 3. Has the charity looked at the range of arrangements, potentially leading to loan deals to help decide which is the long-term financial detriment. • Loans are available in different most suitable? currencies and tenors Borrowing trends 4. Has the charity got a realistic budget According to the National Council However the following risks should also be that shows that it can afford the of Voluntary Organisations (NCVO), highlighted: repayments on the loan? borrowing as a percentage of total balance sheet assets is less than 5 per cent. • The value of an investment portfolio 5. Is the charity getting professional help This may be because no initiative that can go down as well as up; hence in with checking the legal documentation requires funding comes with guaranteed times of market volatility lending values such as the Trust Deed and/or the Loan success. Risks such as an overrun of initial may decrease. Trustees are advised to Agreement? costs on capital projects will put pressure maintain sufficient headroom between on any financial facility in place, as will lending and the current value of their Conclusion overly optimistic business plans which investment portfolio to help reduce Bank borrowing is widespread in the fail to meet targets in attracting increased such a risk. private and public sectors but is a minor income. It may also be simply because finance source in the charity sector. The trustees are being too cautious and • If the value of investments does fall and concept of borrowing can often divide the not really considering the benefits that approach the maximum lending value, Board with some trustees preferring not to funding a truly strategic opportunity it may result in a margin call. pledge assets in favour of a loan. can deliver. A facility, even if not drawn down, can • The assets charities hold within their have the benefit of allowing the trustees Loans secured on investment portfolio investment portfolio will be pledged in to invest for the long-term while providing Secured lending is still relatively unused favour of the bank, as collateral for the the comfort that short term liquidity in the charity sector. This may be because loan, so are at risk if payments are not is available by drawing down on the investment managers do not always have maintained. facility. This can serve to provide higher a banking licence and therefore cannot investment returns for the portfolio as offer lending as an integral part of their • Past performance of investment trustees can invest while avoiding the service offering. portfolios is not a reliable indicator of need to liquidate assets in a downturn. However this should not deter the future results If appropriate, charities should consider use of an investment portfolio to secure borrowing but clearly as with all financial potentially cheaper and more flexible Charity Commission guidelines on transactions should understand why, the borrowing. Some of the key features of borrowing purpose and have taken appropriate advice. borrowing in this way are: The Charity Commission has issued some very sensible advice for trustees Paul Palmer is professor of Voluntary • Secured lending is potentially among considering borrowing: Sector Management and director of the the least expensive sources of credit Centre for Charity Effectiveness at Cass available as interest is chargeable only 1. Will the money that is borrowed Business School, City University London on the amount the charity actually help carry out one of that charity’s draws down purposes? Harry Pope is an advisor to charities at UBS www.charitytimes.com 53 SUPPLIERS DIRECTORY
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ASSOCIATIONS
The Association of Chief Executives of Voluntary Organisations (ACEVO) supports ACEVO members by providing access to: 1 New Oxford Street • Third sector leadership and governance resources to support boards and senior London management teams WC1A 1NU • Information, publications and reports on key third sector issues T: +44 (0) 20 7280 4960 • Conferences, courses and networking opportunities to enhance skills and F: +44 (0) 20 7280 4989 build knowledge E: [email protected] • Dedicated helplines and support services such as CEO in Crisis - a service for third sector CEOs facing disputes with their board. ACEVO also acts on behalf of members; connecting members to key contacts in government.
Charity Finance Group The Charity Finance Group (CFG) is the charity that champions best practice in finance management in the charity and voluntary sector. Our vision is a transparent and CAN Mezzanine efficiently managed charity sector that engenders public confidence and trust. With 49-51 East Road this aim in sight, CFG delivers services to its charity members and London N1 6AH the sector at large which enable those with financial responsibility in the charity T: 0845 345 3192 sector to develop and adopt best practice. With more than 1700 members, managing F: 0845 345 3193 over £21.75 billion, (which represents around half of the sector’s income) we are uniquely placed to challenge regulation which threatens the effective use of charity Company Registration No. 3182826 funds, drive efficiency and help charities to make the most out of their money. Charity Registration No. 1054914 For more information, please see www.cfg.org.uk
ACCOUNTANTS AND AUDITORS
Baker Tilly Your charity. Our focus. Nick Sladden Supporting your aims is our business National Head of Charities Audits don’t have to be onerous and our approach is to assess the size and complexity 25 Farringdon Street of your charity before we begin auditing – we want to know what makes our charity London, EC4A 4AB clients tick, not just ticking the boxes. With teams throughout the UK and a full range T: + 44 (0)20 3201 8313 of advisory services on offer, we are able to deliver innovative and sector leading E: [email protected] solutions to our diverse portfolio of clients, wherever you are based. W: www.bakertilly.co.uk
Wilkins Kennedy LLP Wilkins Kennedy deliver personal service and provide proactive and practical Chartered Accountants & advice to help charities achieve their objectives, improve profitability and overcome Business Advisers obstacles. John Howard Our dedicated Not for Profit group consists of a multidisciplinary team of experts T: 020 7403 1877 with first hand knowledge of and experience in the voluntary sector. E: [email protected] We understand the specific needs and ambitions of our not for profit clients and Michelle Wilkes adapt our services to suit each client’s circumstances. T: 01689 827 505 For more information on our services please visit our website E: [email protected] www.wilkinskennedy.com
CHARITY MARKETING
graffiti media group the modern art of no fuss, donor acquisition lead generation | data | media | creativePR The Barn Bury Road, Thetford Specialising in the charity sector, we offer a portfolio of products and services to help East Anglia charities maximise a return from their investment in donor acquisition marketing and IP31 1HG call centre services. T: 01842 760075 • data procurement and planning • media buying F: 01842 339501 • charity specific telephone lead generation • call centre services • customer and campaign management E: [email protected] W: gmgroup.uk.com A team of the industry’s best planners and strategists with open, honest, ethics and knowledgeable market expertise. Together we’ll build robust, consistent response rates.
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To advertiseTo advertise in the in Charity the Charity Times Times Suppliers Suppliers Directory Directory contact contact Cerys Cerys McLean Brafield 07766 07766662 610 662 or 610Aisling or Sam Davis Ridley 0207 0207 562 562 2426 4386
CONFERENCE
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INSURANCE
At Ecclesiastical, we’ve been insuring not for profit organisations for 125 years. Today, Ecclesiastical Insurance Office we insure thousands of the nation’s charities of all sizes and complexities. Beaufort House Voted best charity insurer* for the last five years running by both charities and brokers, Brunswick Road we’ve worked closely with both to develop a flexible, specialist product that meets the Gloucester GL1 1JZ varying needs of different types of charities. Visit our website or talk to your We also offer a complete package of guidance and advice that’s there to give you broker to find out more. support when you need it. T: 0845 850 0307 Speak to your broker for more information or visit www.ecclesiastical.com/CTimes E: [email protected] * In research conducted by FWD, an independent market research company, of those brokers and organi- W: www.ecclesiastical.com/CTimes sations who named an insurer in the survey, the majority voted Ecclesiastical as the best insurer for charity
Specialist insurance for the charity sector Markel (UK) Limited Markel protect thousands of charitable and commercial organisations who provide care, Verity House support and advice for disadvantaged or vulnerable people including: 6 Canal Wharf Charities Not for profit Care providers Leeds LS11 5BQ • • • • Community groups organisations • Trustees T: 0845 373 0405 Our specialist charity insurance provides cover against a whole range of risks, giving you the E: [email protected] peace of mind that if something unexpected happens, your organisation is covered by an expert. W: www.markeluk.com/socialwelfare We also offer a range of exclusive benefits and services for policyholders providing practical advice and professional help from industry experts to help prevent and manage claims situations.
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Stackhouse Poland look after 400 charities and “not for profit” organisations in the UK. Stackhouse Poland Limited Our specialist team arrange a broad range of insurance programmes for our charity clients, New House including property and liability as well as motor, charity trustee cover and travel policies for aid workers, etc. Bedford Road Guildford The Company also arranges insurance for a large number of corporate clients and has a GU1 4SJ specialist private client division advising affluent and High Net Worth clients on their personal insurance needs. T: 01483 407 440 Please see our website for the video outlining our services to the Charity sector or contact us to F: 01483 407 441 discuss our 10 point Charity checklist for Insurance. W: www.stackhouse.co.uk Insurance Broker of the Year 2013 Independent Regional Broker of the Year 2007 Finalist Independent Regional Broker of the Year 2009
Unity Insurance Services Insurance for charities with 100% of our profits returned to charity. Lancing Business Park As a charity owned insurance broker, Unity Insurance Services has a unique insight Lancing into your sector. For over 80 years, we have been protecting the people, property, West Sussex liabilities and activities of charities. BN15 8UG We view each charity as unique so we always aim to provide solutions that fit your media buying • T: 0845 0945 702 exacting needs. That’s why we will spend the time to understand in detail your call centre services • F: 01903 751044 activities and risks to obtain the best possible cover at the best possible price. E: [email protected] Visit our website or telephone to us to find out more. W: www.unityinsuranceservices.co.uk
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INSURANCE
Insight cover – Specialist charity insurance made simple Zurich Insurance plc Zurich works with over 10,000 charitable and voluntary organisations to provide insurance and risk management services. We have dedicated teams who work with charities to understand Zurich House their needs and provide the appropriate cover, guidance and support. We collaborate with a 2 Gladiator Way number of organisations, including NAVCA, ACEVO and CTN. Farnborough The Zurich UK business also support an annual £1.9 million grant programme to The Zurich Hampshire Community Trust (UK) Limited and around 35% of the Zurich UK workforce share their skills with the community each year. GU14 6GB Our Insight insurance cover includes: T: 07730 735394 • Property ‘All Risks’ • Employer’s Liability • Money W: zurich.co.uk/insight • Business Interruption • Public & Products Liability • Personal Accident • Trustee Indemnity • Professional Indemnity • Employee Dishonesty Visit zurich.co.uk/insight or call us for more information on how we can help your organisation. INVESTMENT MANAGEMENT We have been providing investment management services to the charitable sector since Baring Asset Management Limited 1926, and were one of the first investment managers to establish our own charities team in 1968. Barings now manages over £830.9 million on behalf of charities around the world1. 155 Bishopsgate We work in partnership with charities that operate in diverse sectors, whether you are London a national institution or a charity with more local aims. EC2M 3XY Our Targeted Return approach is designed to balance risk and return. We focus our Contact: Catherine Booth global perspective, experience and expertise with the aim of successfully meeting our clients’ investment management needs. T: 020 7214 1807 E: [email protected] We would welcome the opportunity to speak to you should you be reviewing your existing investment arrangements or merely want to hear a different point of view.
Issued by Baring Asset Management Limited (Authorised and regulated by the Financial Conduct Authority). 1As at 30/04/14 Investment involves risk. The value of investments and any income generated may go down as well as up and is not guaranteed.
Cerno Capital works closely with charities, helping them organise and manage their Cerno Capital Partners LLP investment portfolios. 34 Sackville Street, St James’s It is our view that the only way to obtain a reliable investment return is to identify London W1S 3ED the prevailing macro-economic themes and then follow a robust methodology for For more information, please contact selecting investments. We take a real world approach to risk, concentrating on the Mustafa Abbas, Nick Hornby, risks of losing money and not just the measurement of volatility. James Spence We invest globally, across multiple asset classes and take a long term outlook to T: 0207 382 4112 wealth preservation and growth. E: [email protected] We act as both discretionary managers and advisors to charities. W: www.cernocapital.com
Ecclesiastical Investment Management Profit with principles Ltd That’s what we aim to deliver. We believe that a company’s business activity, its environmental and community impact and the way it interacts with its stakeholders can 19-21 Billiter Street all positively contribute to returns, which is why these factors are integral to our global London sustainable investment process, and why Ecclesiastical has won numerous awards for its EC3M 2RY performance. Mike Goddings Call us for details on the Amity Charity Funds and learn how our charitable ownership Head of Charity Market Development helps us see things from your perspective, and how your investment can make a real difference. T: 020 7680 5839 E: [email protected] www.ecclesiastical.com/charityinvestments Ecclesiastical Investment Management Ltd is authorised and regulated by the Financial Conduct Authority
C. Hoare & Co. Independence, Stability and Integrity 37 Fleet Street We offer charities a full bespoke service across investment management, banking, London lending and cash administration. EC4P 4DQ • Fully independent with no in-house funds or products Simon Barker, • Stable family ownership for over 340 years Head of Charities • Strong risk-adjusted performance T: 020 7353 4522 • Simple fee structure E: [email protected] • Award-winning service W: www.hoaresbank.co.uk • Longstanding connection with the charity sector • Values supported by philanthropic family
directory_june-july2014.indd 4 01/07/2014 11:59:07 SUPPLIERS DIRECTORY
To advertiseTo advertise in the in Charity the Charity Times Times Suppliers Suppliers Directory Directory contact contact Cerys Cerys McLean Brafield 07766 07766662 610 662 or 610Aisling or Sam Davis Ridley 0207 0207 562 562 2426 4386
INVESTMENT MANAGEMENT
Strength, Scope & Commitment J.P. Morgan J.P. Morgan is dedicated to helping charities address their investment and financial 1 Knightsbridge needs. Drawing on our global resources and 50 years experience in the sector we offer London, SW1X 7LX services specific to each Charity’s needs. For more information please contact: Acting as both discretionary managers and advisors we work with charities to: Tom Rutherford, Head of UK Charities • Tailor investment policy statements and strategies T: 020 7742 2819 • Manage a range of portfolios across asset types based on capacity for risk E: [email protected] • Strengthen board governance guidelines W: www.jpmorgan.co.uk/institutional/ charities Our Charity team is one of the leading providers to the sector managing assets in excess of £1.4 billion for around 300 non-profit organisations in the UK.
Quilter Cheviot is one of the UK’s largest independently owned discretionary investment firms, Quilter Cheviot created by the 2013 merger of Quilter and Cheviot Asset Management. The firm focuses primarily on structuring and managing bespoke discretionary portfolios for charities, trusts, Contact: William Reid, Head of Charities pension funds, private clients and intermediaries. Our charity assets under management are in T: +44 (0) 20 7150 4005 E: [email protected] excess of 1.2b*, making us one of the leading charity managers in the UK. W: www.quiltercheviot.com We offer your charity: • Direct access to a dedicated team with the knowledge and experience to tailor your Quilter Cheviot Limited is authorised and regulated by the charity’s portfolio to meet its investment objectives. UK Financial Conduct Authority. • An investment process that can respond rapidly to changing market conditions. • Comprehensive reporting and access to portfolio valuations via our password protected The value of investments, and the income from them, website. can go down as well as up. Investors may not recover A competitive and transparent fee structure. what they invest. • *01.03.14
Waverton Investment Management Bespoke. Trusted. Boutique. 21 St. James’s Square Waverton, formerly J O Hambro Investment Management, provides bespoke investment London solutions combined with a highly personalised service. This allows us to deal with a range SW1Y 4HB of mandates from the straightforward to the more complex and demanding. All charity portfolios, whatever their size, are managed on a segregated basis. We do not run a single Contact: Francesca McSloy charity vehicle or model portfolios as this inflexible approach is the antithesis of our culture. T: +44 (0) 20 7484 2065 • Dedicated charity team • Tailored mandates E: [email protected] • Direct relationship with portfolio managers • Institutional investment process W: www.waverton.co.uk • Strong and consistent performance • Bespoke trustee training Waverton Investment Management Ltd is authorised and regulated by the Financial Conduct Authority. The value of an investment can fall as well as rise and you may get back less than originally invested.
Rathbone Investment Management Rathbones’ history is grounded in philanthropy and for over a century we have been working alongside our charity clients to better understand their requirements, creating tailored 1 Curzon Street, London, W1J 5FB investment solutions to suit their objectives. From the local to the national, over 960 charities entrust £2.68 billion* of funds to us through our network of 13 regional offices, all managed For further information please contact on an individual basis. Francesca Monti: At Rathbones there is no relationship manager or customer service centre; you have direct E: [email protected] access to your investment professional for all aspects to the administration and management T: 020 7399 0119 of your portfolio. Providing comprehensive trustee training, seminars and collaborative W: www.rathbones.com networking opportunities, our dedicated charities team apply their expertise to develop discretionary portfolios reacting to market movements and delivering the returns desired Rathbone Investment Management is authorised through global opportunities. by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and (*as at 31 December 2013) For further information contact Francesca Monti on 020 7399 0119 the Prudential Regulation Authority. or at [email protected]
Ruffer LLP A focus on capital preservation and consistent returns 80 Victoria Street Ruffer is an absolute return investment manager. Instead of following benchmarks, we aim not to lose money in any single year and to deliver a return significantly greater than the risk free London alternative of cash on deposit. Capital stability is essential to provide a sound platform for SW1E 5JL income generation and for growth of capital and income. By aiming to avoid the cyclical gyrations of the market, we aspire to provide a less volatile experience for our charity clients. For more information contact: Christopher Querée We manage over £15bn of assets including £1.5bn for over 200 charities. Our charity clients span all major charitable sectors and include some of the largest endowments in the UK. A T: +44 (0)20 7963 8100 dedicated portfolio manager works with each charity to build an appropriate segregated F: +44 (0)20 7963 8175 portfolio, which may include ethical screening if required. We also manage a Common E: [email protected] Investment Fund, the Charity Assets Trust. Ruffer LLP is authorised and regulated by the Financial Conduct Authority
directory_june-july2014.indd 5 01/07/2014 11:59:10 SUPPLIERS DIRECTORY
To advertise in the Charity Times Suppliers Directory contact Cerys Brafield 07766 662 610or Sam Ridley 0207 562 4386
INVESTMENT MANAGEMENT
Sarasin & Partners LLP Sarasin & Partners is a leading charity fund manager managing £3.7 billion for approximately 275 discretionary clients. Significantly, this represents over 25% of our Juxon House overall business. In total, as at 31 December 2012, we manage around £12.4 billion. 100 St Paul’s Churchyard Investment philosophy founded on three main strands: dynamic asset allocation, the London EC4M 8BU importance of recurring income and our well-established global thematic approach to international equity selection. Contact: John Handford Tailor-made solutions; via segregated portfolios, single asset class funds or two Common T: 020 7038 7268 Investment Funds - the Alpha CIF for Endowments and the Alpha CIF for Income & F: 020 7038 6864 Reserves. E: [email protected] Sarasin & Partners LLP is a limited liability partnership incorporated in England and W: www.sarasin.co.uk Wales with registered number OC329859 and is authorised and regulated by the Financial Services Authority.
UBS Charity focused, performance driven 3 Finsbury Avenue Access all the investment insight and guidance your charity needs through our London dedicated team of experts, structured and ethical investment process and worldleading EC2M 2AN research. Andrew Wauchope - Head of Charities The value of your investments may fall as well as rise as a result of market and currency fluctuations. You may not get back the amount you invested. E: [email protected] T: +44 20756 70166 Authorised and regulated by Financial Market Supervisory Authority in Switzerland. In the United Kingdom, UBS AG is authorised by the Prudential Regulation Authority and W: www.ubs.com/charities-uk is subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. Details about the extent of our regulation by the Prudential Regulation Authority are available from us on request.
LOTTERIES
Lotteries are a fantastic way for charities to raise money and recruit new donors, Lottery in a box but setting it all up can be expensive. Fundraising Initiatives has the answer with Phil Sawicki Lottery in a Box; a fully managed lottery programme that allows charities to 2nd Floor Cavendish House increase their fundraising income and recruit new & long term donors. It’s fully 369 Burnt Oak Broadway compliant, easy to set up and includes on-going management, prizes/jackpots HA8 5AW and FREE Marketing Resources. With Lottery in a Box all the charity needs to do is decide how many new donors they wish to recruit and we take care of all the rest! T: 020 8381 2430, E: [email protected] W: www.fundraising-initiatives.org/en/ products-services/Lottery-Canvassing/
PENSIONS CONSULTANTS, ACTUARIES AND ADMINISTRATORS
Premier The multi award winning, nationwide provider of employee benefits & 8th Floor, AMP House independent financial advice. From de-risking to administering your pension Dingwall Road scheme, from educating your staff to reviewing your benefit strategy. Croydon Surrey Premier See Change CR0 9XA Contact: Ian Gutteridge T: 020 3727 9800 E: [email protected] W: premiercompanies.co.uk
TELEPHONE FUNDRAISING
ZEBRA TM A new breed of UK telephone fundraising agency with a specialist charity team both unique and distinctive. 1st Floor Providing you with outbound telephone services from our call centre in East Anglia, we The Barn offer all charities our core services of donor development, cold and warm acquisition. 11 Bury Road Thetford ZEBRA TM is ready to welcome you with a new flexible approach to deliver outstanding results that can test and roll out as your campaigns require, no matter how big or small IP24 3PJ your requirement is. Contact: Anne Short Supplying your acquisition programmes with passion and insight, we’ll work closely T: 01842 760075 with you to recruit happy and committed donors for lifelong supporters utilising a background of over 25 years’ experience in charity direct marketing. E: [email protected] W: www.zebratm.org Contact us now and join the herd, it’s so much more than black and white.
directory_june-july2014.indd 6 01/07/2014 11:59:12 7–9 July 2014 HILTON LONDON METROPOLE
THIS IS A NEW YEAR, A NEW BEGINNING, BE PROUD...
National Convention 2014 promises to beNational the most Convention exciting yet. 2014 There will be 132 sessions running across the three days, led by 215 speakers and inspirational plenaries including: • Loyd Grossman OBE, TV presenter, • Heritage Campaigner • Harpal Kumar, CEO, Cancer Research • Of course, it’s not just sessions that makes National Convention memorable, so make sure you don’t miss out on the opportunity to connect with your colleagues from all over the world. Network and share So what are you waiting for? So what are you waiting for? knowledge with old friends and fundraising If you’re not yet a member of IoF peers and take away valuable insight. – why not join when you book? You’ll not only benefit from the discounted member rates for the New for this year: New for this year: event, but you’ll also get a full • Masterclasses twelve months’ IoF membership • with all the services, support and • 1-to-1 career advice • further savings that brings. Check • Speed networking breakfast out the savings to be made Checknow! • out the savings to be made now!
BOOK NOW AT www.nationalconvention.org.uk BOOK NOW AT www.nationalconvention.org.uk
Untitled-2 1 28/04/2014 13:03:20 Rathbones is pleased to sponsor the Charity Times Awards 2014 and wishes everyone a wonderful evening
For more details please contact Francesca Monti 020 7399 0119 [email protected]
www.rathbones.com/charities
Rathbone Investment Management is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
1_00110608_Rathbones Ad_Charity Times Awards_271x204_v4.indd 1 13/06/2014 14:46