Bad news for charities

Following the Panorama program into some big name charities last week, more bad news has followed with the Charity Commission investigation into Afghan Heroes charity.

Panorama focussed on Red Nose Day Appeal and Amnesty International amongst other well-known and well-loved UK charities, explaining that firstly, like the BBC, that the latter had paid more than it was legally obliged to release one of its top employees. Many would consider this to be a waste of hard-earned money raised by the public and its dedicated fundraisers.

Red Nose and other charities were criticised for boosting their funds by using unethical investments to increase their funds. They were accused of having financial portfolios that were involved in the tobacco industry and the arms trade.

This is a more difficult issue. Director of Charity Expert, Andrew Butler, was interviewed on BBC Radio WM last week to ask for his views on the subject. Andrew pointed out that whilst charities who portray themselves to be ethically sound might wish to distance themselves from such investments, other charities are legally obliged to seek the best possible return for their beneficiaries.

One researcher has claimed that Red Nose would have received £20M less in return for investments had it only taken on ethical investment opportunities. It is really for the donating public to decide what is appropriate and it is likely that their views will be made via the collection tins.

The investigation into Afghan Heroes has a depressingly familiar ring to it however. Many charities buoyed by initial success and popularity grow very quickly but are not necessarily able to maintain a firm governance to fulfil its responsibilities to both donor and beneficiary alike.
Afghan Heroes financial return show some shocking figures. During the financial year ended on 31 December 2012, the charity received £548,440 in income and spent £516,288. However, it spent a shocking £474,924 on generating funds in 2012 and a meagre £15,153 on charitable activities.

This shocking statistic is not that extraordinary. There are far too many charities who abuse public trust and fail their beneficiaries. The UK public who have donated well over half a million pounds to help others deserve more than seeing the vast majority of frittered away on simply fundraising. There are far more cost-effective ways of serving beneficiaries.

Contact us today if you’re looking to set-up a charity that really does make a difference.

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