“It’s for charity,” they say, whether it’s a fun run for heart disease, a cake sale for women in Bhutan or shaving for donkeys. But does being “charity” make it a good cause? Do some get more done with our money than others? Do we just give and trust, or hold them to account? With 180,000 charities to choose from in Britain alone, how do we make that choice? And do some ways of giving to them help more than others?
Caroline Fiennes is committed to providing answers to these questions. She is the director of Giving Evidence, a company which offers advice on giving, based on evidence, and the author of It Ain’t What You Give, It’s the Way That You Give It. She gave Reform some of her time at Somerset House in London.
You started out as a physicist. How did you end up weighing up charities?
I was brought up in a churchy, volunteeringy kind of household. I have three older cousins – one is in the church, one is a human rights academic, one is a social worker – so social engagement is very normal for us. I did a load of charity work at school and university. So no one who’s known me for 30 years is amazed that I’m doing this stuff now.
I worked in strategy consulting, and that’s when I got interested in the question of: “Oh look, some charities are better than others, wouldn’t it be good if we worked out which are the better ones and which aren’t, and directed resources to the better ones?” And I’m applying the empirical method to these issues, so I still feel quite like a physicist.
British people gave £9.3bn to charity last year. Was that
Some of it was. But there’s huge potential to improve the way charitable resources are used.
So I’ve got £100 to give, I’ve got 180,000 UK charities to choose from. What questions should I be asking?
You want to make sure the organisation is doing something you think is important, and it’s difficult to get an objective answer about that, though not impossible. You want to make sure it has a good idea and is implementing it well. You want make sure it has a clear sense of what it’s trying to achieve, that it has a clear set of activities and that there’s some reason to think that those activities will result the change that it’s trying to create.
And you want to make sure it’s effectively run. People often talk about “efficiency” – by which they usually mean the charity doesn’t waste money. I’m not very interested in efficiency. Its importance is completely overrated. If you’re doing something that doesn’t need doing, it doesn’t matter how little you waste, because the job doesn’t need doing.
What you want to know is that your £100 is going to achieve as much as possible. And minimising waste isn’t a very good proxy for achieving as much as you could do. So suppose you have two organisations distributing anti-malarial bed nets. One could waste a lot of money while the other doesn’t, but if the “less wasteful” one buys its nets from a supplier which is really expensive, it’s going to get much less done with your £100.
What’s really important is that people often conflate waste with administration cost. What Giving Evidence has shown is that charities that do a great job often spend more on administration than charities that do a less good job. We produced the first ever data that showed that.
It’s about false economies. If you’re trying to run an organisation without spending any money on decent computers or decent printers, then your admin costs are small, but you may waste a lot of staff time which is more expensive in the end.
We’d probably expect some charities to work better than others, but you say in the book one initiative might achieve 250 times as much as another.
Yes. That that figure’s an outlier, but it’s quite common to find these multiples. Dealing with cholera in Kenya some programmes achieve ten times as much with your £100 as
others. So it’s really worth looking, because every time we put money into one of the less effective programmes, a load of people miss out, who could have been helped if we’d done our homework a bit better. That’s a massive tragedy. That’s what all my work is about.
But how accessible is that information? When someone from Barnados comes up to you on the street with a clipboard, how realistic is it to read through financial spreadsheets before making your mind up?
Not very! For individual donors, I often think the best way to choose a charity is to find someone who’s done the analysis already and just copy them. It’s like medicine. As a member of the public, you don’t want to go reading reports in the Lancet about which is most effective. You trust your doctor and the National Institute of Clinical Excellence to have done the analysis for you.
So if you’re interested in children’s organisations, you might look at BBC Children in Need, because it has done extensive analysis of the organisations it funds and the chances are they’ll all be fine.
Or if you’re interested in international development, or human rights, or sexual violence a good place to start is the list Comic Relief puts together of the work it supports. You don’t have to do it all yourself. Someones’s done it already.
Does that logic extend to saying that big organisations like Christian Aid and Oxfam, because they’re such a big deal we can assume they’ve done the research and know what they’re doing with our money?
No, you can’t – which is not to be rude about the two examples you’ve used there, just about that assumption. A charity has two different businesses: one is serving its beneficiaries; the other is dealing with its donors. Often organisations that are good at one are not good at the other. A charity that’s got big may have got big by organising fun runs or dealing with hedge fund managers, which is quite different to being able to serve vulnerable children or rescue pandas. A charity may be big simply because someone died and gave it a load of money. So there’s no reason to think that at all – though some big organisations are very good.
Some charities are harder to judge than others, aren’t they? If one is giving meals to homeless people you can count how many meals it’s given, but if it’s challenging homophobia it’s harder to evaluate.
Yes, if you’re Stonewall, what’s the unit of homophobia? There sort of isn’t one, and even if you define the unit as the number of physical attacks, if there were a reduction that may be due to Stonewall or a bunch of other things.
But that’s absolutely not to say that donors shouldn’t fund that kind of work. There’s been loads of work over the last 10-12 years on understanding the impact of charities, an unintended consequence of which that is that people gravitate towards work that is easier to measure, which can be mistake. And the aim of the game is not to identify your effect, it’s to have an effect.
To my mind, one of the all-time best uses of charitable money is the Wellcome Trust’s work ensuring the human genome remained public. How many life years have been created by that? We’ve no idea! Only at the end of human time will we have any notion. Buts it’s reasonable to believe it will have a massive effect.
There’s always going to be a subjective element to charity giving, isn’t there? Some people care more about animals than others, some people have been affected by cancer.
Yes, I think there is. I don’t think you can get to a perfectly rational choice of which sector to invest in – but there is a role for rationality in it. Peter Singer, the Australian ethicist, made this argument: Suppose that we know to rescue one panda costs $10,000; I made that figure up, but I do know that to rid a Kenyan child of intestinal worms and help them go to school for a year costs 40c; that means that for the cost of one panda you help 25,000 children. Is your one panda worth 25,000 children going to school for a year? That would seem like quite a tall order. Ultimately you’re still entitled to say: “I care more about the panda”, but I’ve shown you using maths what trade off you’re really making.
What did you think of the story in the Telegraph in August about the number of charity executives paid more than £100,000 a year during the recession?
That was just a ridiculous story. And it was created by the Chair of the Charity Commission, who is paid £50,000 for a two-day week.
So what if they are? It’s an input measure, and any economist will tell you that you shouldn’t judge an organisation on input measures, you should judge it on output measures. So say a chief executive manages to reduce the cost of delivering meals to homeless people from £2 each to 20p with no diminution of quality. Well, good for them! In which case 100 grand on them is 100 grand well spent. The Charity Commission could more usefully be helping charities to best use their resources to support beneficiaries.
Do you give to beggars?
St Mungo’s ran adverts telling us not to. It’s one of the biggest homeless charities, and I trust their analysis. Homelessness is really complicated – how people get into it, how they get out of it? People who know a lot more about it than I do have ascertained that giving money to homeless people is not a good intervention. (e.g., here)
How about when a friend says “I’m doing a bungy jump for charity give me a fiver?”
This happened to me a couple of days ago. It depends. Sometimes I’m doing it to support them. It’s money I would not have given to charity otherwise, so it’s basically a gift to my friend. Fine. But I am interested in the question: how did you choose that charity? A close friend of mine did the marathon last year and asked me to sponsor him, and I said: “Out of interest, how did you choose that charity?” And he said, with laudible honesty: “At random.” Well, ‘at random’ is not my favourite process! But he needed to raise money for his marathon place so I gave him some as a gift. Then I gave some to a charity that I actually rate.
If the person is raising money for a charity which I rate, then I’ll often give a fair bit, and try to do so early and publicly (e.g., on their Just Giving page) because of the social norming effect which large donations have on other donors.
Are there particular issues when an organisation, like a denomination, gives large amounts to charity?
Yes, lots of other issues come into play. The most obvious thing is that if you’re giving a bigger amount, the difference between a good decision and a bad decision about which charity to fund becomes much greater.
And there’s loads of really peculiar bad behaviour that goes on. Suppose you give Christian Aid a sizeable chunk of their budget. That means that if they normally get your grant in February, and one year you don’t get your act together to pay it till April that would create a major problem for their cashflow. Or if you stop giving without a lot of notice. Those things can be peculiarly disruptive.
Often big donors want to know what the charity is up to – and that’s great, but as a donor you might ask for a report and, as your reporting year finishes at the end of April, you might ask for it then, but maybe Christian Aid’s year is the calendar year, so they have to write a report just for you. So some of your grant money gets wasted on producing admin just for you. That’s just waste.
Or maybe you want them to report on the ethnicity of their beneficiaries in a different classification than all their other donors do. In which case they’ve got to scurry around getting a load of data that’s completely useless. There’s a lot of that kind of stuff that goes on. It sounds trivial, but getting on for £1bn gets wasted in England and Wales alone each year through rubbish like that. We’re working on reducing that.
Part of this interview appears at: http://www.reform-magazine.co.uk/caroline-fiennes-interview-how-to-give-well/
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