1970s >> 1978 >> no-881-january-1978

How sweet is charity? (part 2)

The purpose of this article is not to look at the phoneys and frauds who operate in the area of charity work, although there are many examples. Neither is it to make cheap gibes at the dedicated work of many voluntary charity workers who mistakenly devote time and effort for purely altruistic motives. (Those who make a career of running charities must answer for themselves. An advertisement in The Times on 28th September, 1977 sought a “social secretary to the Director-General of a well established charity”. The salary offered £6,000 per year. What is the Director- General paid?) This article is concerned with the respectable charities, to examine their development and rôle in a competitive capitalist society, to question who benefits from them, and to show how all the effort and money expended will never cure, and does very little to relieve, distress.

Originally charities were set up and financed by the wealthy, but in their modern form they draw their income from several sources. Public donations are their mainstay, and their fund-raising activities are concerned with persuading the public to voluntarily levy a tax upon themselves. They may draw some income from foundations and trusts. These are set up by wealthy capitalists (e.g. Nuffield, Rowntree, Wolfson), and are more generous on paper than in fact: the capital remains tied up in the donors’ companies — thus they retain control and possible tax advantages, and the dividend is what is actually donated. These grants are subject to the whims and interests of the trustees of the foundation. The Government and local councils make grants to some charities. They often prefer to reimburse a charity for handling a social problem (however haphazardly), rather than have it become part of the social services. In addition charities draw investment and rent income on assets, and some dabble in commercial activities and sweepstakes.

Charities are legally obliged not to take political action or they lose their status, but the border-line is ill-guarded by the Charity Commissioners. Charities do indulge in political lobbying, and frequently get wide publicity when they make their erroneous opinions available. Recent statements include one by Oxfam that the populations of advanced countries should cut their intake of meat in order to solve the world’s hunger problem; and another by the Family Planning Association that too many children are the cause of poverty. Shelter is trying to persuade local authorities to make condemned slum clearance properties available for occupation.

It is not easy to discover how much charities collect and distribute. J. P. Gallagher in his informative book The Price of Charity—which studies not the principle but the method and organization of charity—describes how difficult it is to obtain accurate figures. He gives examples of how “some very august charities indeed” show “net income” from local fund raising activities, so that it is impossible to know how much has actually been given and compare it with the amount that reaches headquarters. He shows how they try to hide legacy income; they may decide to allocate the whole of good-sized legacy to administration, and the ratio of expenses to revenue will drop sharply. Another ploy is for large legacies to be allocated to the capital account and not appear in the general income and expenditure account, so that voluntary workers are not tempted to take things easy. He writes:

  The whole philosophy behind a lot of charity accounts is that if they are made difficult enough, fewer people will bother to study them in detail and ask what will almost certainly be regarded as impertinent questions! The aim—which is understandable—is always to present the best possible face. But for charities this means emphasizing their heavy costs and playing down income, especially from legacies. It is true! There are charities who will say unashamedly that they like to show in their accounts the lowest possible routine cash income in the hope that it will inspire donors to give more. Another, sometimes conflicting, aim is to make the ratio of expenses, most especially the administrative bracket, appear as favourable as possible. There is a ‘low admin, expense league’ among charities today! There are several arguable ways of carrying out this exercise and almost all charity accounts will reflect one or more of the tricks of the trade.(The Price of Charity, J. P. Gallagher, p. 99. Our italics)

Having collected their unrevealed donations and paid their obscure expenses, it might be reasonable to suppose that the balance would then be speedily despatched to the unfortunates on whose behalf the appeal is made. But first the charities have more pressing needs. They must allocate money to cover the next year’s appeal for more funds, and then they must acquire assets so that they have stability for the future. Apparently they see no prospect of curing the distress they are seeking to relieve. Recorded assets of 100 of the big fund-raising charities at the beginning of 1972 were £200,994,000. In addition the Official Custodian for Charities held no less than £162,848,825 on behalf of various charities smaller than the leading 100. The assets of 50 of the major trusts and foundations totalled £712,717,000. These assets are in property, commercial and industrial investment, local authority and government bonds. A registered charity gets 50 per cent. rate rebate, and may at the discretion of the rating authority get up to 100 per cent. Legacies up to £50,000 are free of tax, and they pay no taxes on charitable income or assets. Some individual figures that can be quoted for 1972 are as follows. (Gallagher could not obtain later figures at the time of compiling his book.)

In 1976 Christian Aid, who were concerned about the future of sterling, sent £1,700,000 overseas into safer currencies (Sunday Times, 31st October 1976). From these figures it will be seen that charities have a considerable stake in the capitalist mode of production.

Not content with the proceeds of investment and general fund-raising, some charities are now venturing into commercial activities. These are not confined to selling Christmas cards. Brian Walker, the director of Oxfam, says directly: “I’ve tried to make sure the commercial side is as effective as the compassionate side”. Oxfam’s retailing ventures (old bric-a-brac) had a turnover of £2.75 million in 1975, and Oxfam is buying —with charity cash—the freeholds of 200 of its 600 shops. Oxfam has been tempted to go into development projects, and in 1975 negotiated with Indira Ghandi a land development scheme in Orissa, the poorest state in India. A report in the Sunday Times Business News on 31st October 1976 stated: ‘‘the scheme involves forced land resettlement of the peasantry, a great deal of arm-twisting by the local government and far-away Delhi.” Another new Oxfam venture is Bridge, a subsidiary which helps sell handicrafts and some produce from the “poor third world”. Bridge made £81,000 profit on a 1975 turnover of £175,000. To quote the Sunday Times again, “Many a Parsee exploiter of the poor Indian peasant would have drooled at that.” Roy Scott, the Oxfam executive charged with building up Bridge, resigned in 1976 because he felt that “exploitation and corruption had crept into the project”. His statement indicated that too much of the profit came from the low wages paid to Oxfam workers in the rural factories. Although he has withdrawn himself from its murky activities, he concluded a letter about his resignation to the Sunday Times: “I wish it well.” Oxfam featured a starving Indian child holding out a begging bowl in its 1976 advertising campaign.

Considering that they are all supposed to be purveyors of “compassionate good works” there is a surprising amount of rivalry, jealousy, and squabbling in the charity movement. According to the Sunday Times report, Help the Aged has squads of car-borne fund-raisers scouring the country so successfully that their rivals Age Concern are speaking of them as locusts devouring all the charity cash in their path. The five leading overseas charities— Oxfam, Christian Aid, Save the Children, Red Cross, War on Want—were forced by the BBC to link their interests together and make joint appeals, because of the squabbles about who should get air time for special disaster appeals. The former communications director of Christian Aid, David Smithers, and the boss Dr. Slack are quietly threatening to sue each other over some uncharitable remarks each has said about the other. David Smithers wrote to the Sunday Times (7th November 1976) on his resignation and said:

  In the last financial year for which there are certified accounts (1974/5), of the £4.2 million received in donations, legacies, and interest on investments Christian Aid actually disbursed, on my calculations, less than 49p in the £ on physical help to the world’s poor. Yet its major appeal in the press during the year featured a distracted woman holding out a sick or dead baby, and rightly claiming that she and millions like her might be dead by Christmas unless help was given . . .
. . . My testimony after some years as a senior executive and chief globetrotter for Christian Aid. is that only a small proportion of the money disbursed actually reaches the “poorest of the poor” for whose benefit the money is given. So much of its spending is clerically orientated.

The Sunday Express on 3rd April 1977 reported on a vicar in Somerset who was running a Silver Jubilee appeal and found in three of the returned envelopes the respective sums of 1p, 2½p, and 7½p. He was angrily and publicly rebuking the anonymous donors for their “meanness”, when a parishioner reminded him about the “widow’s mite”. The vicar replied that allowing for inflation (perhaps he had divine help for his calculations), the widow’s mite would be worth at least 50p by now! His attitude is shared by most of the charities, who have a low opinion of those from whom they beg. Gallagher quotes charity officials saying that people donate as a “sop to the conscience” and “to keep up with the Joneses”, and says they use methods which in effect shame people into giving money. These range from highly emotive pictures and appeals to mild blackmail. The Trades Description Act of 1968 does not cover charity appeals if the appeal is solely to gather donations. We are all familiar with the forlorn pictures, hard-hitting advertisements, and sensational presentation. Parents of schoolchildren will be aware of the appeals they bring home frequently for national and local charities. They are often organized into task forces, finding sponsors for swims, walks, and other activities. As charities are presumably well aware that schoolchildren do not have incomes, they must also know that they are getting at parents through their children. Another insidious method of collecting, pioneered by Bamardo’s, is the scheme where workers are asked to have a small weekly sum deducted from their wages at source. A worker refuses to contribute at the expense of looking too mean to give 2p or 5p a week. In the Aberfan disaster of 1966 when 116 children and 28 adults died in a coal tip avalanche, £1.5 million was raised, which with interest grew to £2 million. Yet the final accounts list £150,000 paid out towards the removal of local coal tips—something it might be thought that the National Coal Board should have paid for entirely.

In 1876 the total income of endowed charities came to £2 million. Gallagher states that nobody can be certain how much goes to charity in the UK now, but he estimated for 1973 the sum of £800 million, which includes grants from public funds, but does not include the amounts raised on local or informal projects. What benefits reached the poor and needy (and at what cost to their self esteem) cannot be assessed, but it is significant that charities were begging even harder in 1974, 1975, 1976, and 1977. Is any further argument required about the failure and ineptitude of charity?

Socialism is a reorganization of society so that the means for all production and distribution will be held in common. Production will take place to satisfy the needs of all society. All will stand equal in relation to the wealth society produces. The begging bowl will disappear, and nobody need ever again experience the humiliation of charity.

Alice Kerr