Kirsty Weakley: Does charity suck? Maybe, but so do some businesses

21 Oct 2016 Voices

Charity Sucks, by Iqbal Wahhab

Kirsty Weakley highlights some of the factual inaccuracies and misconceptions about the sector in the latest ‘must-read’ book about charities.

Charity Sucks - that’s not my opinion but the title of a new book by former charity trustee and restaurateur Iqbal Wahhab. It’s a title guaranteed to have most of the sector up in arms, which was the point - it’s part of a series called Provocations. But that doesn’t me we shouldn’t try to address the issues. 

The thing is he’s right. The Victorianesque, top down, patronising organisation where the act of ‘doing charity’ was primarily to make the philanthropist feel better about their lives, rather than reform the system to make the world fairer for everyone is pretty 'sucky'. 

The trouble is that the the picture of the charity sector does not exist anymore. In general the book is poorly researched, relies heavily on sweeping statements, anecdotes, long quotations, and is too simplistic in its core argument that businesses are just better than charities to be taken too seriously. At just 100 pages long it would be difficult to provide a really detailed and thoughtful analysis of the charity sector.

Nevertheless it has been printed, which means its arguments are likely to repeated elsewhere, so it’s important to address the issues being raised head on. Indeed Wahhab discussed the book on the BBC Asian Network and a wrote an article for International Business Times summarising his arguments. 

Factual inaccuracies 

Before getting into the philosophical debate about the right legal structure to deliver socilal good, we need to address some of the factual errors made in the book: 

  1. “Funding for charities is in seemingly irreversible decline” - latest figures from the NCVO Almanac actually show an overall increase in income for the voluntary sector, including a slight increase in both grant and contract income from government. Granted previous years have shown a decline, but last year’s rise surely demonstrates that the trend is by no means irreversible. 
  2. “Following the suicide of Olive Cooke, a 92-year old poppy seller who had been pursued by a staggering ninety-nine different charities in the last year of her life, the commission commission recently did a spot check of ten charities that used direct mail for fundraising.” - This was not a "spot check" but a group of charities that came under scrutiny because they used direct mail as their main source of income. 
  3. “I don’t know why they’re calling themselves ‘the voluntary sector’ since most people who work for charities are paid to do so,” - according to the latest Charity Commission statistics about the sector there are actually 964,839 employees compared with 3,456,284 volunteers (and 943,944 trustees - although some of these will also be employed at other charities). 

These were just the ones I spotted on first reading so there may be more. 

Charity vs social enterprise 

The underlying theme of the book is that charity is ‘bad’ and social enterprise is ‘good’, mainly because it is a lot like business. 

Wahhab concludes that where charities are not sucking it is because they have turned into social enterprises, using the example of the Big Issue and Hackney Community Transport. It misses the point that both these organisations are still charities - and are no less charitable than those relying on a donations model. 

What makes a charity a charity is not how it derives its income or how it delivers on its objectives, but what its purpose, or reason for existence is. 

Equally the social enterprise model is not right for every charity. At the same time not every social enterprise should be a charity.

Karl Wilding, director of public policy and volunteering at NCVO, laments that if the arguments hadn’t been written as a “polemic” there could have been some constructive debate. 

On the solutions outlined in the book, namely that mission-led business can make a valuable contribution to society and find that there are financial rewards to being more ethical, and that by measuring impact and being more accountable organisations can improve, Wilding adds “you would struggle to find anyone in the sector who would disagree”. 

“But just because social enterprise or mission-led businesses are a good idea it doesn’t mean that charity is a bad idea,” he says.

Ultimately the diversity in the voluntary sector, or maybe Wahhab would prefer civil society (we certainly do here at Civil Society News), is one of its greatest strengths, and to pit different parts of the sector against each other is downright dangerous and irresponsible.

Some charities can and should do better 

There is no doubt that some charities do suck, I come across enough of them by reading the Charity Commission’s operational compliance case reports.

I’m sure that many in the voluntary sector for whom Wahhab’s complaints of duplication, inadequate scrutiny by trustees (though the sector does seem to be turning a corner on this after Kids Company thrust the issue into the spotlight) and lack of unrestricted funding will resonate. 

The problem I have with this book is it doesn’t feel as though it was set up to be constructive. It was written by someone who has obviously tried - and failed - to successfully engage with the charity sector and is now embracing social enterprise with gusto. 

Perhaps the sector should reflect on how someone who has been involved with a number of charities has become so disenchanted with the entire sector, that he decided to write a book about it. 

Business can take over from charity?

Wahhab’s conclusion is that as charities are worse at solving society’s problems than businesses with social mission, it should be left to business, unless charity reforms itself. 

“Charities aren’t evolving in the way businesses have to. They expand by the amount of hope and faith by which they can convince largely uninformed, if well-meaning, donors and philanthropists to finance them. Businesses expand through success. Success wins over hope. Businesses win over charities in our ability to improve the world.”

This is a dangerous idea - while business should have a part to play, I think it’s highly unlikely that we’ll see the disappearance of the charity sector any time soon.   

Just as there are examples of badly run charities, there are examples of badly run businesses. In fact this year alone the businesses pages have filled with examples like BHS, which was run into the ground by failure to invest its pension scheme, Sports Direct, which got caught paying workers below minimum wage, and Hermes, over similar low-pay allegations. 

Wahhab argues that more businesses should follow his example - and it is a good example of recruiting from prisons and encouraging staff to be engaged in the community - but the simple truth is that not all will. Businesses are ultimately accountable to shareholders. Charities on the other hand play a vital role in holding those in power, whether it be businesses, government or anyone else to account. 

They can do this because one of the distinctive, and important traits about charity is that they are ultimately accountable to their beneficiaries, not to shareholders. If they were replaced wholesale by businesses with social purpose I fear society would be a poorer place. 


More on