The charity sector has come under increased scrutiny from national newspapers. David Ainsworth asks which of their criticisms have some merit, and what the sector should do about them.

Increased scrutiny of the charity sector from the national media began in the summer of 2013 when the Daily Mail and Daily Telegraph launched separate exposés of what they termed high pay in the charity sector.

Since then the media criticism has intensified, and last year’s sector news was dominated by it. Fundraising regulation and the fall of Kids Company were the biggest issues, but there have been attacks on many other fronts, too.

Nor is the media alone. Clearly there is widespread dissatisfaction among the public, many of whom feel that large charities have grown too corporate, too far from the cause, too apt to squander money, and too rapacious in their fundraising.

This suggests a disquiet the sector should address, although its importance is not to be exaggerated too much. The public are also unhappy with most other major institutions, including health services, businesses, politicians, newspapers and local authorities. Only the army and the royal family appear relatively immune to censure.

Still it begs a question. Should the sector respond with a PR offensive? After all, some of the press, public and political opinion is founded on pretty poor information.

Individual charities’ response when they have come under attack has mostly been to retreat into their shell. As of late, a few have found more success by striking back. Bryn Parry, chief executive of Help for Heroes, neatly skewered The Times when it wrote his charity was spending millions on empty beds. “We are not running a Travelodge,” he said.

In the sector itself there are the early stirrings of a united response. The Understanding Charities Group was formed to propose solutions, and Acevo and NCVO have announced they will launch a counter-offensive. As yet, however, the issue has not been granted a high priority.

It is also worth saying that while there is currently increased scrutiny, this does not necessarily represent a paradigm shift in charities’ treatment in the media. The media focuses its attention on particular issues for a while until individual journalists lose focus, or retire, or the public grows bored. Dangerous dogs, MMR jabs and MPs’ expenses have all come and gone as sources of column inches.

In most cases, though, the media focus does not swing away until something has been done – sometimes something positive, sometimes unnecessary and harmful.

This article is an attempt assess the various accusations levelled at charities and to work out what should be about them. To what extent is the charge reasonable, and should the sector’s response be to change itself, ignore the problem, or to launch a PR offensive?

'Millions wasted on fat cat bosses'

The most long-running and ubiquitous argument made by the media is that charities pay their staff too much.

The problem here is donor perception. People are giving away money they worked hard for, and they want it used well. They hate to see it squandered, and they feel that no one, really, is worth a six figure salary. In business they cannot prevent it. In politics they do not like it and lobby against it, but they still have to pay their taxes. Charity is the one sector they can choose whether to fund, and they can vote with their feet.

Above and beyond that, the public give their time to charities for free, and they do not see why others should not do the same. This misses the vital argument that charity workers do it as a full time job, whereas volunteers mostly do not.

This is one aspect of a ubiquitous problem for the charity sector: charity is a complicated thing, which requires careful thought, but most people’s reactions to it are unconscious and instinctive. Charities need to act in the real world, balancing complex and contradictory incentives, but donors do not want to balance complex questions when thinking about charity. They want simple answers, and react poorly to equivocation of any sort. High pay does not fit into a simple narrative, and so they dislike it.

This is an area where charities need to push back hard. It is a good idea to spend money on salaries for good people who deliver social good, and charities should say so.

The arguments already exist. Charities do what is best for the people they help, and do not hire staff unless they will be useful. Charities are careful stewards of every penny of money they receive, they understand how important this gift is to the donor, and promise to spend every penny carefully. Vulnerable beneficiaries deserve the best people helping them, not the cheapest. And you should not be paid less because you do good; if anything, you deserve more.

'Not enough money is going to the cause'

Every time I read this phrase it makes me think of a famous George Best quote: “I spent a lot of money on booze, birds and fast cars. The rest I just squandered.”

Are charities supposed to be like this? Does the media believe they spend half their money on beneficiaries and the rest on parties?

This is very closely connected to the argument about pay, above, and the answers are much the same. Charities spend money on the things which will best help their beneficiaries. That includes effective technology, appropriate offices, and effective communication with those who can do the most to influence the law.

What’s frustrating is that the sector itself has been complicit in this process, with many charities offering their own spurious calculation of how much is going direct to beneficiaries.

The truth is, all the money goes on the cause, and the sector needs to say so. We need better statistics of our own to present to the world at large – a better and more effective calculation of how money is spent.

There’s clearly a major PR job to be done here, because the public consistently think charities are inefficient and wasteful, with more than half their donations going on back office costs such as rent, IT and finance departments, whereas in fact most of the money in the sector is spent on the front line.

'Fundraisers hounded my budgerigar to death'

This issue has been addressed extensively elsewhere. Some of the individual allegations are overblown and it is crystal clear that Olive Cooke did not kill herself because of fundraisers. But equally, it is apparent that the public has lost patience. While fundraisers may argue otherwise, it is unlikely to be a good long-term tactic to alienate your supporter base.

Nor can the sector say it was not warned. Successive reports from inside and outside the sector have called for change, and have been rebuffed. Frequently the fundraising sector’s preferred tactic has been to attack the probity and loyalty of the critics. Trustee boards have either been wilfully ignorant or they have been sleeping on the job.

It is rare that the Daily Mail is in the right and charities in the wrong, but on this occasion the sector must accept the truth. It is questionable whether the regulatory changes imposed are exactly the correct ones, and smaller charities may have cause to feel hard done by. Their larger brethren, however, had ample opportunity for reform before government stepped in, and it is hard for them to complain.

'There are too many charities and they should all merge'

If you take a look at the charity register and see lots of charities with the same word in their name, and you don’t like to think terribly hard, it’s easy to draw the conclusion that there are too many charities doing the same thing.

The Financial Times, no less, carried an article earlier this year, saying there are six charities for red squirrels, and that they should all merge. There are actually nine or ten, all in different parts of the country, and it is unlikely that these disparate local areas would be served by a single London-based body – there being few red squirrels in London.

Similarly, the FT said there were 581 cancer charities (there are actually more like 1,500). It called for mergers here, too. But these bodies, too, are diverse. They deal with different types of cancer, in different parts of the country, and fund different services – notably palliative and research

It is unclear who the FT feels should enforce this new priority, although it appears in favour of massive government intervention to make the sector more efficient. The FT is by and large wholly opposed to government intervention in any other sector to make it more efficient, so this is an interesting viewpoint.

There are significant reasons why charities dislike mergers – two brands are often better than one; you lose expert staff; the cultures of the two bodies are different; it’s rare that two charities actually do exactly the same thing. And that’s not mentioning pensions, which derail more mergers than almost anything else.

There is also significant up-front expense – redundancies, the cost of unifying two sets of technologies, and the sheer management time dedicated to them.

There are also issues if a merger leaves only one charity serving a particular group of stakeholders. If that body loses its way, or falls out with a particular group of service users, then beneficiaries can be left with nowhere to turn.

Then there’s the problem that mergers only succeed when both chief executives back them. Since a merger usually involves a chief executive losing their job, it is perhaps unsurprising the sector doesn’t see more.

However despite all this, there are many in the sector – including myself – who feel more mergers would be a good thing. The way to accomplish this is through funding for change and support for the staff affected.

As to what the media response should be? Not much, really. This issue is a bit of a concern because it could be used as ammunition by those such as Chris Grayling who dislike the sector on principle. But it’s probably not worth engaging with. No supporter ever stopped giving because you didn’t merge, and those who write about this tend to have adopted an absolutist view of charities which is resistant to rational argument. Better to ignore them and focus on more pressing PR problems.

'Big corporate charities have lost touch with the public'

Interestingly, this is almost the diametric opposite of the previous criticism. It is also the most general and difficult-to-refute allegation, because it could mean almost anything.

While the people who write this in big national newspapers are arguably also pretty distant from the public, they probably have a point. Big charities have a particular image problem. The public do feel out of touch with the top 100 charities. They feel they’re being duped by slick ads, and wonder whether charities really deliver. Even many working in the sector feel the same way.

I have no idea whether corporate charity needs to rebuff its image, or actually do things differently – probably both. In any case, this is an issue where self-examination could be more useful than a good campaign.

'Charities spend too much campaigning and not enough helping people'

This criticism actually emerges more often from the mouths of Tory MPs than the papers, but the Daily Telegraph and the Daily Mail do probably agree with it.

On a lot of other subjects, the papers and the public are united in misunderstanding. But here, the people and those in power are wholly out of step.

I suspect many donors aren’t as keen on groups who do nothing but campaign – although the success of 38 Degrees shows there is certainly a place for it. But I’m also sure that donors want those who provide services to also have the freedom to voice what they have learned. People who care about poverty and inequality want Oxfam to speak out. People who suffer from motor neurone disease want the MND Association to do the same.

The sector seems to have decided to just keep on lobbying and completely ignore anything anyone says on the subject. In this case, this is probably the best solution.

'Charities rely too much on public funds'

We have heard it several times. There are too many charity shops, too many fundraising adverts, too much money hoarded in investments, and too many charities taking public money.
Sometimes, it is far from clear where the public would like charities to obtain funds.

There is perhaps a legitimate criticism of government here. Ministers have several times been caught using millions of pounds of public money to fund their own pet projects, and while it seems as if the sector could do with more grants, not less, it also seems clear that the best way to distribute them is through arm’s length bodies such as the Lottery and the Arts Council, rather than direct ministerial fiat.

When it comes to contracts, we could legitimately argue that many companies – Serco, A4e and Group4, for example – are more dependent on public contracts than almost any charity. Although the press and public, to be fair, dislike private outsourcing too.

This is one to push back on. Charities are entitled to compete for public funds, like everyone else, and there is a strong argument for government funding for charities providing a public service. There is a strong argument that this should be done more effectively, on a wider scale, with greater consistency, rather than the piecemeal way it is handled presently. Charities should say they are confident they are better at compassionately helping people than the government, or local councils, and intend to carry on.

'Charities are investing your money in guns and tobacco'

It is surprising that since the Comic Relief scandal, this accusation hasn’t been levelled at more organisations. There are great swathes of the supposedly ethical charity sector investing billions of pounds in companies run by real, genuine bastards – sweatshop owners, people who peddle illegal weapons to dictators, companies polluting the very ground they work on.

Given how little it costs to invest ethically, this is a significant failing on the part of the sector, and it is astonishing that more charities have not faced significant reputational damage because of it. If I was ever hired by a national newspaper to uncover corruption in the charity sector, this is the first place I would start digging (the next would be pension deficits).

So my recommendation on this one is to think carefully about your investment strategy before the next investigation.