The Charity Sleuths

We have moved

2006-11-15T18:00:00.000Z

As the Intelligent Giving website is now fully up and running we have created our own blog so our findings and comments will be posted there from now on.

The address is: http://www.intelligentgiving.blogspot.com

We look forward to seeing you there.

Ta-dah!

2006-10-31T19:53:00.000Z

Thanks for keeping up with us.

The site is live. I hope it meets expectations!

http://www.intelligentgiving.com

Dave

Hello world (nearly)

2006-10-27T09:24:00.000Z

Four days to go... and we decided it was time to show the charity world what we have been doing for the past year.

Yesterday we emailed the 332 charities we have profiled so far, asking them to look at their entries and let us know what they think. Their replies - good or bad - will be displayed on the site.

The 22 responses received so far have been encouragingly positive, many congratulatory. We were expecting a barrage of angry emails from fundraisers convinced we are out to get them, but it hasn't happened.

Barring one addled response from someone who seems incapable of navigating the site, people seem to have grasped that the purpose of Intelligent Giving is positive, and that we are not some evil force intent on destroying the charity world.

November 3rd is the official launch date but you'll be able to see the site on the 1st. We can't wait...

Neill

The Donkey Sanctuary

2006-10-12T14:24:00.000Z

In our quest to unearth the truth about how charities work, we’ve been tracking down rumours doing the rounds. And one of the most enduring of these is about The Donkey Sanctuary.

The Donkey Sanctuary is big: it spent over £13m last year. It looks after a lot of donkeys in Britain, and has ambitious plans for expansion overseas. First impressions are, it is well-run.

But closer inspection reveals that - as the rumours insist - it's sitting on a massive pot of money. When we opened up the Sanctuary’s annual report we discovered that they had over £38m (no, really) in the bank.

This might not have worried us if it they had concrete ideas of how this money was going to be spent – but apparently they didn’t (ie it wasn't designated for a particular purpose). As far as we knew, they were saving up for a donkey health spa, or an extra-large donkey Christmas party. They could spend this money any way they liked, and, as potential donors, that worried us.

So we went to a quiet place and took another look at the report. After some head-scratching, we discovered that they were, inexplicably, counting everything they owned as part of the cash they had to spend. If this sounds strange, you’d be right: it’s like protesting to your bank that they weren’t counting the value of your house in the balance of your current account.

What was the Sanctuary playing at? We rang their finance director, John Carroll, to find out.

Refreshingly, John admitted there was a problem with how they were doing things at the moment, and told us that next year’s annual report would be a lot clearer, even going so far as to tell us what they were going to spend on specific projects.

This is great news. So the Donkey Sanctuary is not a fat-cat charity, after your money to enrich itself. Rumour quashed.

Adam

Status report

2006-09-28T07:19:00.000Z

We've been very busy, hence the silence for the last month. We look set to hit our deadline of 1 November. We currently have a three-quarter-built site, which we are user-testing, with the following attributes:

Over 1150 pages
967 charity profiles uploaded
267 detailed charity profiles uploaded
27 original articles received/written; 12 uploaded
Searchable listing of 100+ experts' recommendations in place
Searchable listing of over 100+ award-winners in place
Searchable listings of volunteering sites, challenge event sites and"where to give stuff away" charities in place
Charity search & filter functionality working
Personalisation module working
Comment module working
Discussion board working
Consistent design applied across 90% of pages

Why annual reports?

2006-09-11T13:43:00.000Z

People ask us why we put so much stress on annual reports rather than web sites, since the latter are written for the public. The answer is simple:

Websites are not useful tools to compare charities. Each is very different, created for different purposes (some to help beneficiaries rather than to inform donors, for example), there's no statutory guidance on what should be in them or what they are for, and they can cost a lot of money to build and maintain. So if we compared by website we'd penalise charities that don't understand, or can't afford to create, or don't need, a research-friendly web site.

The annual report meanwhile is the legal document that all charities ought to know how to write. It's the only document they have to produce by law and the only one which has comprehensive guidance on what it should contain. It has certain types of information that no other kind of publication will carry. For example, the top salary, who the trustees are, the risks facing the charity - generally information that organisations don't willingly disclose. It's the only place where the nuts and bolts of the organisation should be described.

It has been suggested that we also look at charities' Annual Reviews. Well, we do, where they exist and when they are referred to in the annual report. But very few charities actually produce them and, again, there's no guidance on what they should contain.

Do tell us if we're repeating ourselves.

Dave

The contents of our charity review pages

2006-09-01T14:06:00.000Z

The review page template is still being designed but these are the elements we are planning for it:

The page will be headed by the charity name, eg "FARM-Africa"

There will be a headline, eg "FAIR HARVEST FROM AGRICULTURE PROS"

Then a paragraph eg:
"A crew with big ideas, working with everyone from community groups to the World Bank to help African farmers manage their land more efficiently. A well-rounded annual report suggests it's in a strong position all round, with money in the bank and plans for the future, although the report could benefit from more detail of activities."

Then some figures and relevant smiley graphics (yes) to indicate:

The quality of the reporting (pivoting on the quality of the annual report) (%)
The number of months of expenditure in reserves (# months)
Whether or not there is an ethical investment policy (Yes/No/No investments)
The organisation's highest salary (no smiley used here)

Each of these entries will have a link called what is this? leading to an explanation.

A lower-profile section called "Misleading figures" will contain (no smileys):

Administration costs (%)
Fundraising costs (%)
Charitable expenditure (%)

Each of these entries will have a link called Why misleading? linking to an explanation.

Then the heading, "If you like this charity, you might like these" followed by five similar charities.

Then a section called "The charity replies" where the charity can write 50 words of its choice.

And finally a link to the annual report, to the GuideStar entry, to the charity's website and to the charity's donations page (on its own website).

Behind this page there will be two more tabs with more financial details and more ways to help (volunteering and challenge events, as provided by the charity).

Responses welcome via the comments option...

Which is the real pink charity?

2006-08-26T08:38:00.000Z

The Breast Cancer Research Trust says it is "the only Charity specifically promoting research into breast cancer".

Breast Cancer Campaign says it is "the only charity that specialises in funding independent breast cancer research throughout the UK".

Meanwhile the huge Breakthrough Breast Cancer clearly does a spot of specialist breast cancer funding itself, and The Genesis Appeal does the same. And there are doubtless others.

What we could use is an organisation that presents all these charities side by side so people can compare for themselves. Oh hang on, that's what we're doing...

Dave

The opinions carousel

2006-08-17T14:14:00.000Z

Big charities are lumbering and wasteful, big charities are professional policy-changers
The contract culture means charities are torn away from their strengths, the contract culture means charities can grow and influence policy
Three-year grants distract charities from their work, three-year grants keep charities on their toes
Chuggers are a cost-effective way of attracting donors, chuggers give the sector a bad name
And so on

I've worked in a variety of businesses (publishing, new media, business consultancy) and I've never known such a range of polarised opinion. Is it a reflection of the diversity of the charity sector. Or is there nor enough research? Or not enough debate?

Either way, it will all be on the web site in our "Experts Opinions" articles. Also each charity will be able to publish its own response to our review on its own review page. We're hoping the dialogue will be useful and lively.

Dave

The truth about non-charitable costs

2006-08-15T17:18:00.000Z

A year ago we - like many donors - had preconceived ideas about which financial figures would help point to the effectiveness of a charity. In particular we were planning to rely on those old chestnuts: administration and fundraising. But the more research we conducted, the more we were convinced that they are almost meaningless.

The truth is that admin and fundraising costs are often plucked from thin air. Discussions with a wide range of charity workers indicate that - for all the guidance of SORP 2005 - both figures are guessed at, then reduced, and are therefore utterly misleading. One CEO said they could get away with presenting their fundraising costs as two per cent of total expenditure, when in reality they would be nearer 50 per cent.

If we presented these figures as a comparative option, we'd probably end up penalising honest charities. It's a sorry situation - and for the time being we'll respond by garlanding the admin figure with caveats and hiding the fundraising figure in the back of our reports.

Neill

The grass is always shorter...

2006-08-11T11:27:00.000Z

One of our most important pieces of work is writing short overviews of each charitable sector so the public can get some context on their favourite charities. We are having these pieces checked by (some very accommodating) experts - and are finding some interesting things.

In sport, for example, there are Community Amateur Sports Clubs - organisations that encourage local participation by keeping fees low and providing facilities. They are not-for-profits but many avoid registering as charities as the Charity Commission can, allegedly, apply unwanted restrictions.

We were quoted the example of a cricket club being forced to allow the grass on its pitch to grow to a certain length so that members of the public could sit comfortably on it. Thereby providing sitting access for all - but cricket access for nobody.

Or is this just a non-charitable urban myth?

Neill

And now for something completely different

2006-08-07T23:10:00.000Z

Fancy yourself as a circus enthusiast or daffodil connoisseur? Maybe you want to campaign for courtesy or send cows abroad. Whatever your passion (as long as it's legal), be assured there's a charity for you.

Flower-lovers have a choice between The National Association of Flower Arrangement Societies and The Daffodil Society. The cosmically-minded will find kindred spirits at The British Interplanetary Society. A predilection for puppets or a bent for balloons? Then join the ruck at the Norwich Puppet Theatre Trust or British Balloon Museum.

We pondered the question of how to categorise charities for months, and we kept finding charities that don't fit neatly into our major sections ( 'Children', 'Education', 'Human Rights' and so on). Not wanting to ignore the diversity out there, we created a 'Curiosities' section for organisations whose aims are out of the ordinary. Examples above.

We hope that donors who aren't sure who to support will find something there that tickles their fancy. And that we get a smile out of everyone else.

Anita

Sensitive CEO salaries

2006-08-03T11:58:00.000Z

We have reviewed 500 charities and have decided to stop - for the time being - to check that our financial figures are correct. We have taken the diligent but difficult next step of asking each of the 500 charities to check we've got them right.

We are having many positive responses but one contentious issue keeps raising its head: the Chief Exec's salary.

For charities whose CEOs earn over £50,000 there have been no issues since those salaries are disclosed in the Annual Report in bands (e.g. £50,000 to £60,000). But for CEOs who earn less, we are getting a few indignant responses. This is because the majority of Annual Reports simply state, "No employee earns more than £50,000". Without an exact figure, all we can do is state that the CEO salary is below £50,000. But we are requesting the actual figure. And this is ruffling feathers.

Donors would doubtless like to know what the CEOs' salaries are, especially as they are paying towards them. But we've had several alarmed responses from the charities, saying that this is private information and... how dare we?

In phone conversations it quickly becomes clear that many of these charities don't realise that their accounts are already in the public domain on Guidestar and the Charity Commission Register. We are just presenting them in a way that is more accessible to the public.

As for the CEO salaries, we, as donors, want to know them and we can't easily understand why a handful of charities won't disclose them. Do they have something to hide?

For the record the CEO of Intelligent Giving gets £33,000 and he doesn't care who knows (he says).

Neill

Unrestricted fun

2006-07-31T14:05:00.000Z

We have recently found that a number of the smaller religious charities have really quite large unrestricted funds (the money that the charity has and is free to spend), relative to their expenditure for the year. This has been quite puzzling: it seemed at first that they were simply hording their money or saving for a rainy day. Raining frogs, perhaps.

However, on closer inspection it appears that some of them have included in their ‘unrestricted funds’ the value of their buildings. The theory being, presumably, that if it came to it they could sell their buildings and use the cash to continue their good works.

There is a certain logic to this. However, other charities do not include their buildings’ value in this, presumably feeling that these are integral to their work and/or that it is not easy to get their hands on the money tied up in them.

I do not know which method of accounting is more useful for donors. However, it is just this sort of variation that makes comparing charities by their figures alone difficult, and this highlights the need for charities to be absolutely clear about where they get their figures, and what they refer to.

Adam

Terrorist questions

2006-07-30T22:27:00.000Z

On Friday I scribbled our basic summary of UK-registered Palestinian charity Interpal. It reads thus (and here's an example of the word length and style we're using for our 500 reviews) :

"MUSLIM FUND WEATHERS THE STORM
Despite having been completely cleared of allegations of aiding terrorists, this development and relief trust has endured a heap of bad publicity. Ignore that; we found little to complain about in its clear and informative annual report."

However having just watched Panorama's report on the searingly obvious links between Hamas and the schools which Interpal funds, I'm going to have to rewrite it. The situation raises several questions for us:

Our overviews are supposed to be based primarily on what we find in a charity's annual report, relative to that financial year. We don't intend to touch them until we see the following year's annual report. Under which situations do we revise the overview?
Each review will have a "right to reply" area where charities will have space for 30 words to respond to the review. Under which circumstances will we offer an update on that?
Our reviews will carry links to related websites. If a website carries potentially damaging information about a charity - again, in which circumstances will we publish its address?

Suggestions by comment link below please...

Dave

Weighty stuff

2006-07-27T14:05:00.000Z

We spent three months, on and off, deciding which criteria to use to judge the transparency of charities. We ended up with a blend of the Charity Commission's document, "Hallmarks of an Effective Charity", the Commission's guidance to accounts ("SORP 2005"), plus tips from work done by Charities Evaluation Services and the New Economics Foundation. We shared these with the voluntary sector via an article in Third Sector and an online survey. We then finalised them based partially on how easy they were to use.

We decided to apply them to Annual Reports & Accounts only - not websites or other documentation - for reasons mentioned in our earlier entry.

We have just spent a whole day debating the weightings of our final 42 criteria. Is the fact that a charity has its Annual Report on its website more important than say, whether or not it lists its trustees within the report? You've not heard discussions like it.

We've done our best. We're not going to publish the weightings partly because we don't have the time or capacity to keep debating them but mainly because we know it will be too hard to reach consensus. Significantly, we will apply the same criteria to all our reviewed charities - and it's only one of several ways you'll be able to rank charities.

Next year we will look at the criteria again.

Dave

Small but good

2006-07-20T10:16:00.000Z

Take a look at the Galapagos Conservation Trust Annual Report for an example of a small charity (expenditure £441,000) that has produced a comprehensive report which enables it to communicate effectively with donors.

Not flash, not fancy, but it works.

Neill

Some conclusions

2006-07-18T19:02:00.000Z

Having reviewed 400 charities in the blistering heat of East London, we have come to a consensus. These findings are not for the faint of heart. We name names and rank results.

In order of competence and based purely on outcomes, our ranking is as follows:

Twister - loved for its retro styling as well as the combination of creamy indulgence and zesty refreshment.
Fruit Pastille Lolly - a multi-coloured explosion on the palate, this cheeky little number boosts reviewer productivity. And brightens the place up.
Magnum - the nemesis of the ordinary choc-ice. Extra points for the exquisite first bite. Almond variety particularly commended.
Banana Lolly - a surprise entry for the Intelligent Giving team, but a fast favourite for its exotic flair.
Feast - the chocolatey core sends you straight back to school, but reviewers couldn't agree if it was real chocolate. May drop off the rankings if found to be phoney.

Faced with such difficult work, feedback is essential. However rigorous the criteria used, reviews are always partly opinion, and we look forward to hearing yours...

Anita

Why Annual Reports?

2006-07-18T05:57:00.000Z

Increasingly people are asking us why we are examining the Annual Reports of charities rather than other public-facing material. Here's the answer:

1. Every charity has an Annual Report, because it has to publish one by law. Not every charity has a Review or a web site or other publicity materials.
2. There is clear guidance from the Charity Commission on what should be in an Annual Report. There is no guidance, or norm, for what should be on a website or in marketing materials.
3. The smallest charity can produce a transparent and informative Annual Report more cheaply and easily than it can produce a transparent and informative web site.
4. And so.. wealthier charities tend to have better web sites than smaller charities. The playing ground is more level with Annual Reports.
5. A peripheral point, but significant: it takes far longer to review a web site than to review an Annual Report (I know - I used to review sites for Internet Magazine).

We plan to refine our criteria next year. I welcome suggestions on how we might do that.

Dave

No donations, please

2006-07-10T09:44:00.000Z

Charitable donors may well be nervous about where to direct their money, but apparently they aren't half as anxious as the charities who receive it.

Out of six charities I phoned, four of them had no idea whether or not they accepted donations from the public. It seems like a no-brainer: surely if a donor is waving a cheque at you, there isn't so much red tape that you can't just accept it? But two of the people I spoke to sounded utterly flummoxed by the question, a third said she wasn't qualified to answer, and a fourth explained that donations were usually made by 'big people'.

It seems that whereas most charities will beg for your money, some of them just don't know what to do with it.

Anita

Quis custodiet...

2006-07-07T16:28:00.000Z

Having made a previous entry about charities making enormous mistakes in their accounts (26/6/06), I feel I should make the point that the Charity Commission themselves make the odd error or two.

To take a random example (out of many):

Sisters of Mercy of the Union of Great Britain (Charity no. 288158)

The Charity Commission says their income for 2004-05 is £5,525,218

Actually, the figure is £6,189,457

Not exactly a finger slipping on a keyboard.

Adam

UPDATE: There is actually a slight difference in the use of terminology here. The Charity Commission (CC) uses the terms 'Gross Income' and 'Total Expenditure' on its 'Show charity' page but these headings do not feature in charities' Statement of Financial Activities or in the Notes to Accounts. They are terms borrowed from the Charities Act 1993. What their accounts show are the 'Total Incoming Resources' and 'Total Resources Expended'.

The differences between these are as follows:
While Total incoming resources are all resources available to the charity in the given year, Gross income is this amount less any gains from disposal of fixed assets, investments, or from revaluation of assets, minus amounts received specifically to increase any endowment fund. But funds released from an endowment fund are included.

Also, to get the Total Expenditure, the CC excludes items like loss on disposal of fixed assets, losses on revaluation and decreases in the endowment fund from Total resources expended.

Why does the CC use these terminologies?
Basically to help in establishing the thresholds of the charities used for determining the requirements for accounts' scrutiny (audits) and also whether the charity should prepare accounts based on the 'accruals' basis or the 'receipts and payments' basis.

Also, because these excluded items are not in the regular 'business of the charity', it helps the CC compare one charity with another.

We use Total incoming resources and Total resources expended as a way of judging the charity by 'the resources it commanded' in the year, and 'the total use of those resources'.

Hamis

What is it you do again?

2006-07-07T10:15:00.000Z

The Ramblers Association's Annual Report 2004/5 does not contain the charity's stated purpose (a.k.a. objects). Remarkable. It would be difficult for a donor to lend its support to an organisation when he/she has no idea what it does.

In this case it is not too serious as the report gives comprehensive details of their work, but it remains a glaring omission. We've never come across this before.

Neill

Losing their religion

2006-07-06T09:44:00.000Z

On our data capture questionnaire we ask, "Which religion is your charity affiliated to?"

Among our test responses, a charity which is a member of the Evangelical Alliance, and which clearly has a Christian ethos, replied "None".

When I emailed to ask them why, they replied: "Our board and senior management are Christians but we do not actively promote our organisation as a Christian Charity," followed by the somewhat contradictory rejoinder, "We do not hide what we are and clearly indicate that we are members of the evangelical alliance."

I suspect that most secular donors would feel misled to read that this charity was secular.

I also suspect that many charities with a religious ethos are afraid of losing secular donors.

We'll have to rephrase the question.

Dave

The wrong kind of donor?

2006-07-06T08:49:00.000Z

One of our criteria for deciding which charities to review is: do they accept donations from the public? Working this out is not as simple as you might think.

Yesterday I emailed the Wetland Trust to ask them if they accepted donations from the public, as it wasn't clear from their documents. They replied with one line: "Thanks for your inquiry. It would depend on who the donor would be."

Can anyone tell us what that means?

UPDATE: After further enquiries, the Wetland Trust has informed me that they will only accept donations from the public if they are over £100,000. Any lower than that and apparently it is not worthwhile. I wonder if the trustees and current funders agree on that.

Neill

Further information

2006-07-04T09:27:00.000Z

There is a limit to how much information we can get from the public-facing documents of major charities, but our user research has shown that there is a lot more the donor wants to know. Do they have ethical investment policies, for example? What about charity "Challenge Events"? Are they religious, and if so, how religious? What would £100 a year fund?

In order to get this further information we sent an online questionnaire to 15 charities randomly selected from our lists, and less than 24 hours later, we have received our first reply, hoorah!

Neill