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Should charities act like private businesses to make more money?

Private businesses invest money to make money – so charities should take a leaf out of their book, a fundraising expert says.

SHOULD CHARITIES BEHAVE like private businesses – or should they operate in a different way?

Simon Scriver, who runs Total Fundraising, which works with charities, spoke to in advance of the Fundraising Ireland annual conference, which took place on Wednesday.

He poses the question of whether charities should act like businesses, and use some of the money raised to help them raise more money.

War on charities

Scriver said there is “a feeling that charities are sometimes picked on and treated very differently from the private sector”.

“Charities do such good work and are often discriminated against and compared to people who make fizzy drinks and drill for oil. I explore the way with charities we focus on the way they are run and their finances and we very rarely look at what they are achieving – they are achieving a lot of amazing things.

With private businesses, the focus tends to be entirely on their output and people don’t question how they are run, said Scriver – they just buy the product.

He said it can be a good thing to be cynical and ask questions about this issue, and find out what charities achieve.

It’s partly the charities’ fault; it’s partly our fault as the public. We don’t allow them to do that; don’t allow them to spend money on advertising, on measuring impact and showing impact. You have to keep costs down as low as possible, we say. The private sector has shown that doesn’t work. [The] private sector’s flourishing and making billions in profit.

Though he believes it needs to be taken on a case-by-case basis, Scriver said there is plenty of evidence a change of focus could work for charities.

He said the dilemma for the charity sector is: “If I take your donation I have a choice: spend €1 to save a life or put it into advertising to make €5 to save five people’s lives. Are we trying to look after as many people as possible or keep costs low?”

Social enterprise

One relatively new development are social enterprises – social businesses who are essentially operating in the same way as charities, but with a different name. “They are allowed to spend money in this way and allowed to change the world in same way businesses do,” said Scriver. “We are seeing social enterprises doing amazing work.”

He thinks charities may be afraid of broadcasting what they do, afraid that donors will turn on them because they don’t understand it. “We as a society and the government [also] needs to put money into measuring the impact. We are not really measuring impact,” he said.

We are asking charities what do they spend on salaries and rent, not how many people’s lives do you impact because of the amount of money you got last year.
I’m not saying charity CEOs should earn millions, but in the private sector you have people earning millions. It is sad that the whole world is run by money, but that is reality.

It is accepted that a person who earns a large wage deserves the money they get because of the work they can do.”Yet we are outraged if someone in charity sector earns that. Irish companies where people are earning [extremely large amounts], for me that is inexcusable when people are still starving.”

His first preference is that no one earns such outrageous wages – but if they are going to accept it in the private sector, why not the charity sector?

“In the private sector you can work drilling oil and make millions, and if you donate some of that to charity you are a hero,” he pointed out. But people in the charity sector who don’t earn a lot every week “are thought of as these parasites” for taking money out of donations.


However, even following the recession, Irish people have been generous in donating to charities. “From what we have seen it hasn’t been negatively affected. We are still seeing individuals who give small amounts each month.”

Meanwhile, he says businesses in the private sector and government are pulling money from charities. “That says a lot,” says Scriver. “A lot of research shows poorer people give a higher percentage to charity than richer people.”

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