After a series of controversies occurring within charities such as the Red Cross, Sean O’Grady looks at where our donations are really going.
The word charity is defined as ‘the voluntary giving of help, typically money, to those in need’ but charitable organisations, however, can often end up being something slightly different. By the very nature of charitable and voluntary bodies, they are non-profit unions. For many people this is a misleading title as it gives donors a view that charities do not keep a penny of their income for themselves. The fact is, they do. While this certainly doesn’t make a charity’s actions any less altruistic, it can be somewhat unexpected for people who were led to believe that all of the hard-earned cash they donated would be given to the cause itself.
If a charity wants to be successful and well-run, a considerable portion of the money they receive from the public will have to go into areas such as fundraising and administration. Although this is a necessary tactic if a charity wants to be a success, it can also be disheartening for donors. A common issue with many voluntary organisations is that the money they generate doesn’t go exactly where they had promised it would. It is not unheard of for charities to make donations to other organisation that their relatives or friends may run. They also have the ability to spend their donors’ currency on salary perks and other ventures separate to the cause they promote.
It is completely fair to say that nowadays, the modern face of charity is not the organisations themselves, but the omnipresent street fund-raisers known as ‘Chuggers’, or ‘Charity Muggers’. These overly friendly clipboard holders can regularly be found ambushing people on Grafton Street to donate to their cause of the week. Although such campaigners are promoting a good cause, to call them irritating would be a gross understatement. We have all been made to feel guilty because we ‘don’t have any spare change’ to hand when they suddenly appear in front of you of out nowhere. What many don’t realise however, is that they are not just doing their job out of the goodness of their heart, but because they are being paid. In the UK and Ireland, fundraisers often earn well over the minimum wage and they also receive additional cash based on how many signatures they collect. Street fundraisers usually do not work for the charity they claim to support, but are working for a fundraising third party.
Most surprisingly, the fundraising companies that chuggers work for can often charge up to ninety-five per cent commission in the first year for the charities they are supporting. This means that just five per cent of the money that a charity would earn would actually be donated to their cause, the rest all going into the upkeep and promotion of the organisation. It is no wonder that voluntary companies do not make this fact clear to their donors. This massive percentage generally drops down the longer a charity is active, and it is advisable to be cautious of charities that give over fifteen per cent of their income to administrators.
Charities such as the Red Cross have come under fire recently with claims that they are misrepresenting their assets. The criticism revolves around the diversion of donations from the Haiti relief fund, and allegations that €160,000 raised for the tsunami relief in Asia was held in a bank account in Co. Tipperary for several years. The story has forced the company to redraw its constitution and introduce new codes of conduct to prevent any similar happenings. The Red Cross has also come under fire in China, where a controversy came about in July 2011 after a senior member at the Chinese Red Cross blogged about her expensive clothes and luxurious lifestyle. Her actions ignited a firestorm in China and led to intense paranoia about corruption and political interference within Chinese charities. Philanthropy in China is still in its developing stages and has been seriously hindered by this woman’s seemingly harmless blogging about her life.
While it is clear that charities can lose sight of what they originally wanted to achieve from time to time, it should not discourage anyone from donating to a cause they feel passionate about. It should make them more eager to seek out organisations that they know will use their donations to assist worthy causes. Many people seem to give to charities that they, in fact, know little about. If those in need are really to be helped then those donating need to do their research and ensure that they know exactly where their money is going.