Four things wrong with Pudsey

Adam Rothwell
  Adam Rothwell
Intelligent Giving Researcher
The IG toddler

 

Editor's note: This article was published in November 2006. Since then, Children in Need has significantly improved the quality of its reporting - which means a lot of the criticisms below are no longer valid. Good work Pudsey! (See our latest thinking.) On the other hand, though, the DEC (which we praise in this article) has in fact got less transparent recently - a sad step in the wrong direction.

LOATH AS WE ARE TO knock the stuffing out of a one-eyed teddy, the fact is that supporting Children in Need (see profile) is a lazy and inefficient way of giving.

Here are the four reasons why:

1. Pudsey will spend your cash on administration

Giving your cash to a grant-giving charity like Children in Need is, 90 per cent of the time, a bad idea. Why? Because, with a grant-giver, you pay two sets of admin costs: one to run the grant-giver itself, and the other to run the charity which actually does the work.

Pudsey's website implies that this isn't an issue, claiming that 'every penny you give' will go towards charitable work. But that's just clever wording. CIN does just the same as all the other big (clever) charities: it invests your pennies (for six months or longer sometimes - do you want that?) and uses the interest to cover costs.

Grant-givers: not all bad?
A grant-giving charity we like
The Disasters Emergency Committee (see profile) is the outfit that hoovers up donations during emergencies (like the Asian tsunami) and distributes them to 13 aid agencies, including all the big players. Our research shows that the DEC is open about how it distributes its cash, monitors how effectively it's being spent, and saves member charities a fortune by running co-ordinated ad campaigns during appeals.

2. With Pudsey, you lose control over where your money's going

This is another problem all grant-givers face. If you give to Children in Need, then some of your cash will support projects you wouldn't normally give to. Hands up people in Gateshead who'd like to see their cash spent on projects in Guildford.

It will take you a minute, maximum, to find charities which suit you via our Charity chooser, or Award-winners or Experts' choices.

3. He's lazy

The law requires Children in Need to submit two documents to the Charity Commission each year. Neither of them need be long or complicated. So this makes it all the more surprising that, last year, it made a monumental hash of the shorter one. Its 'Summary Information Return' contained information that was in some parts incomplete, in others plain false.

How could the CIN bigwigs let this happen? We asked Pudsey's chief money-man, David Howley, but all he could say was that they had some 'staffing issues' last year. We're pretty understanding people, but for a big charity this lack of attention to detail just isn't good enough.

4. He's not very good at providing information to donors

We've given CIN a "Quality of Reporting" score of 64 per cent in their detailed profile, which is frankly underwhelming for a charity this big. Pudsey isn't keen to let you know how he judges the success of the projects, and there's scant information on future plans.

Our criticisms of CIN's reporting (not for the fainthearted)
Our problems with CIN's SIR: strictly for charity anoraks only

It's hard to know where to start when pulling apart this shambolic document. It's probably easiest to say that it's almost all wrong, in one form or another. But, if that's not enough, here are our detailed criticisms. Numbers refer to the section of the SIR that CIN have incorrectly filled in.

- The Charity Commission says an SIR should 'direct readers to the more detailed information contained in their Trustees' Annual Report,' etc. Nowhere does the CIN one do this.

- For question 2b, 'You should briefly explain how your charity seeks the views if its beneficiaries or users.' It doesn't do this.

- 'A grant-giving charity would need to explain the ways in which it considers the needs of its grant applicants and grant holders.' It doesn't do this.

- 3b: It's supposed to outline what its plans are. It doesn't.

- 4: It doesn't really explain how the objectives were achieved. Instead it provides woolly statements that convey little meaning.

- 5: The wrong set of accounts data is used: these numbers don't include subsidiary-company activities, when they should.

- The Charity Commission says 'Your charity may have subsidiary undertakings which it controls and through which it carries out part of its charitable or income-generating activities. Where this is the case, the answers you give to each question in the SIR should encompass the activities and finances of the whole "group" as disclosed in your charity's consolidated accounts and not just the charity itself.'

- There's no breakdown of the types of grants given: The Commission says there should be.

- The figure quoted for 'Total expenditure on charitable activities' is the same as that given for 'total expenditure,' even though £555,000 is given as the 'cost of generating funds' elsewhere.

- The 'cost' of a '7hr television show' is given as £555,000. This is incorrect for two reasons:

1. The notes say that this money was expended on more general fundraising - so there's clearly an inconsistency here.

2. The £555,000 figure taken from the Annual Report includes investment-fund management fees. The correct figure for fundraising activities is in fact £498,000 (using the charity-only accounts page, which in itself is wrong).

- Question 7 is supposed to uncover what plans the charity has for the next year. CIN doesn't seem to have any.

Quotes from the Charity Commission are taken from their leaflet, Guidance Notes for the Summary Information Return

 
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Reader's comments

Submitted by Martin Davies (not verified) on Fri, 16/11/2007 - 7:24pm.

Children in need probably do give to NSPCC. To find out if they do, or how much, check the accounts of either.
However, few funders (and CiN is a funder) will cover everything a charity needs. Often grants cover at best a single project, often only part of a project and not covering anything else.

Funny really, charities need money to cover everyday things like electricity, gas, rent, phone bill, salaries etc.
The £2 a month (which is only a start, individuals can be asked later to increase it) will help pay for the background costs as well as campaigning and direct action.

CiN give to many charities, but cannot afford to totally support the large ones.


Submitted by Ron Clayton (not verified) on Fri, 16/11/2007 - 2:15pm.

I have a further comment

Children in need are attracting millions of pounds

Why do the NSPCC still have to beg for a £2 a month donation?

Do Children in need give aid to NSPCC


Submitted by Anonymous (not verified) on Wed, 18/07/2007 - 7:11pm.

BBC News: "In a segment called Raven: The Island in the BBC's Children in Need appeal's Scotland broadcast in 2005, viewers were led to believe that a phone-in competition, open to the audience, had been won by a viewer. In fact, due to a technical mistake, calls from the public did not get through and the name of a fictitious winner was read out on air."
http://news.bbc.co.uk/1/hi/entertainment/6905095.stm
How did you miss that one IG? ;)


Submitted by ordsallcafe on Thu, 24/05/2007 - 9:52am.

adam rothwell contradicts himself, he complains that they do not do cover their administrative duties, then he says they spend too much on admin.


Submitted by Editor Dave on Wed, 22/11/2006 - 9:21pm.

We *want* to raise the profile of good, smaller charities but the big problem is: which criteria do we use to choose them? We get enough grief as it is for our criteria for choosing the larger charities, and we thought they were pretty watertight. Selecting small charities arbitrarily is not feasible. We'd love people's suggestions for criteria :non-existent shoulder-shrug emoticon:


Submitted by LMC on Tue, 21/11/2006 - 11:51am.

http://society.guardian.co.uk/voluntary/story/0,,1952787,00.html

(Good publicity for IG)

So when you guys going to review some of the smaller (but still "of general interest") charities then? :non-existent angel emoticon: - not necessarily the very locally-focussed or obscure disease ones, but there are many others that do good work which could be of wider interest

--------------------------------------------------------------
... they nearly thought I am Vlad the Impaler


Submitted by Peter Heywood on Fri, 17/11/2006 - 5:01pm.

The figures Intelligent Giving gleaned from Children in Need's annual report and other filings indicate an annual income of £37,163,025 and admin costs of £1,869,890.

If CIN kept donations for an average of six months then it would have to be getting an interest rate of around 10 percent to cover the admin costs, which is about double the best rate I can get.

Am I missing something here?

Peter Heywood, Intelligent Giving


Submitted by emilyalice on Fri, 17/11/2006 - 12:59pm.

I agree with you Neldo that Adam's argument that his grant-giving charity is different to CiN is correct. That was not my contention. What I said is that he didn't make that differentiation between government and public funded in his article, merely saying that in 90% of cases giving to grant-giving charities is a 'lazy donation', whilst giving no yardstick to judge which 10% qualify as an example of 'intelligent giving'. Now, it would appear that the organisation that funds this website is to be considered intelligent giving as it is mostly government funded (they don't seem to be turning down public donations either). However, I say again, the article in question did not say that government funded ones were ok, it rather made a very sweeping statement that giving to grant-giving charities was on the whole bad. I was warning against the possible oversimplification of the message, and you can tell me till you're blue in the face that the institution funding this is different to CiN, but according to the article, under which we are only given 'grant-giving' vs 'non-grant giving' as a variable, they are the same. Their differences, and the significance of these differences which are not mentioned in the article in fact prove my argument, so I suggest that it is you who may not have been listening.


Submitted by LMC on Fri, 17/11/2006 - 11:13am.

In response to Neldo - it's all in the wording.

I put my foot down with a *very* firm hand on our "100% of donor money goes to projects" statement. Whenever I issue such a statement, it reads "As our original endowment covers our administrative overheads, we can guarantee that 100% of your money will go to projects". Project-specific administration is included in project costs - i.e. any office-y stuff that would not happen if it was not for that particular project (as opposed to overall management, administrative, accounting or fundraising costs, which are paid for by the original endowment not donor money).

As explained elsewhere on this site, some charities bank donors' money and pay admin overheads out of the interest earned before that money is paid out - which means that they can promise that the original donation will go entirely to the project.

However, I strongly believe that such things should be clarified as too many people have a false impression that what businesses have to pay for, charities get for free. I wish. I hate statements which imply that charities have no costs with a passion.


Submitted by jtlross on Thu, 16/11/2006 - 7:52pm.

Am truly delighted that www.cavyrescue.co.uk will be able to stop my arthritic gerbil getting any worse; I presume that profiling this charity is a high priority task for Intelligent Giving?

Also, thought you'd like to know that having spent a few hours nosing about your website, I *finally* got around to setting up a direct debit for the CF Trust (www.cftrust.org.uk), which I've been meaning to do for years - and albeit indirectly you spurred me on to doing it. So 1-0 to you. (Though they don't yet have a profile - are they going to be done before or after the gerbils? Those tricky decisions you face...)

Thanks for all the info.


Submitted by Anirudh on Thu, 16/11/2006 - 6:19pm.

If, as Adam points out, the grant-giver that supports this website is wholly funded by government then it receives no donations from the public and is therefore a very different case to that of CiN.

Also, I fail to see how any organisation, grant-giving or otherwise, can make the promise that every penny donated goes to charity, as there must always be administration costs. As far as I can see it is only clever accounting and misrepresentation. For organisations that are wholly funded by voluntary donations, it is simply impossible. Somewhere along the line, somebody's money had to be used to cover the costs of running the charity.


Submitted by emilyalice on Wed, 15/11/2006 - 4:33pm.

I am indeed interested in charities, but I do not see grant-giving institutions in such a harsh light. They may also seek to regain their admin costs from government or benefactors, the same as the organisation that funds you, and this is the kind of differentiation you must make when giving such a widespread criticism. Some grant-giving organisations may be able to keep the promise of every penny donated going to the cause, that you consider CIN to not have delivered. Without making that kind of differentiation, the charity that attributes you grants is as bad as CIN (aside from their documentation record) and a donation to them should also be considered 'lazy'. This is exactly what I meant when I referred to the potential to oversimplify your message.

Also, your point about grant-giving organisations holding on to money for up to 6 months seems a little alarmist. Charities are not seeking to make a profit, and quite frequently in terms of grant-giving, a staggered distribution of donations is most prudent and effective. If you give a 10 year project all the money in one go and it falls flat on its face then that money is lost. If it is given in installments then progress can be monitored and risk of wasting money is less.


Submitted by Adam Rothwell on Wed, 15/11/2006 - 4:01pm.

Not all donations to grant-givers are bad. But most are.

If you give to one of these charities, you lose control of where your money goes and you incur extra admin costs.

These are uncontroversial facts, and, as far as I'm aware, can't be argued with.

This means that, for the conscientious giver, there are almost always more effective ways to give.

But this doesn't mean that we think grant-givers are bad per se.

If you can't be bothered or don't have the time to make decisions about which charities to give to, then grant-givers can be very useful. We just think that, if you're on this site, then you're probably interested in charities, and so could do better.

And what about our own funding from a grant-giver? Well, that's a clever point, but it doesn't really apply here.

There's a big difference between grant-givers that solicit cash from the public, and grant-givers that distribute money given by a benefactor or government agency.

And the grant funding we get comes, in one way or another, from the government, which has to use intermediary agencies in order to make sure its cash is distributed fairly - which, in this case, I think it has been!

Adam Rothwell


Submitted by emilyalice on Wed, 15/11/2006 - 2:58pm.

Whilst I accept Adam Rothwell's points that Children in Need should have been better about it's reporting and in general more transparent about its donations, I would think he might have exercised more caution in so blanketedly criticising grant-giving charities. Whilst there is that small link mentioning one grant-giving charity which is approved of, this kind of ubiquitous criticism could be really harmful, particularly if over-simplified and taken out of context, by say the Daily Mail in today's paper. I certainly wouldn't imagine that Mr Rothwell meant that all donations to grant giving charities are lazy giving, in particular the local grant-giving charity that funds this website.


Submitted by robertpyke on Wed, 15/11/2006 - 1:48pm.

So gerbils want your cash - all very well and good. But surely there should be a law against totally pointless charities like this? Why doesn't the Charity Commission stop this nonsense?

And, more to the point, why didn't they notice such big errors with CIN's dodgy accounts?? What's wrong with them!


Submitted by Jo on Wed, 15/11/2006 - 12:44pm.

I couldn't believe that this was a real charity but having searched the charity commission I find that IT IS!!!


Submitted by SimonK on Wed, 15/11/2006 - 12:22pm.

Submitted by jtlross on Tue, 14/11/2006 - 11:01pm.

Thanks Adam - I take your point. To the main question, then: How can I best help arthritic gerbils? All that time, running in wheels...it makes your heart break.
Toby


Submitted by Adam Rothwell on Tue, 14/11/2006 - 10:59pm.

I think you've got some good points there, jtlross. However, the errors CIN makes in its Summary Information Return are more serious than you suggest - even though it's true that few people read these things. CIN has a legal requirement to complete this document to the best of its ability, and its board of trustees has a duty to check over its contents and ensure their truthfulness. It's not clear that CIN did either of those things - which is why we take them to task for it. We're not saying all charities have to be perfect - but we do think all charities should obey the rules.

I'd also accept that, if you give to any national charity, then your money will be spread across the country. However, the point I wanted to make was that, in the case of CIN, you don't really know where your cash is going at all - so it could even support a cause you don't approve of, like helping asylum seekers, or providing family mediation in a form not compatible with your personal faith.

And as for your final point, I'd totally agree: if you're lazy, give to Pudsey. But if you've got a bit more energy - which is what I assume if you've made it this far - then there are far better options out there.

And if you want to give to arthritic gerbils, then we'd say: Fine, do that. It's your money - so you should control where it goes.

Adam Rothwell


Submitted by jtlross on Tue, 14/11/2006 - 10:20pm.

Hmm. I was never too keen on the one-eyed teddy thing in the first place (maybe it was just Sir Terry putting me off?), but I feel strengthened in my prejudice now. And obviously it would be great if they were well-staffed enough to do their reporting properly. But (and this might be controversial) I'd far rather a charity I gave money on really focused on distributing my money than duplicating paperwork that barely anyone really reads, if they were genuinely understaffed. And fingers-crossed they'll do a better job next year.

The bigger problem I have is with your parochialism: if you're giving to a charity, does it really matter whether they're going to spend it in 'Gateshead' or 'Guildford'? If I give money to Mind, I don't panic that they might help someone with a mental illness who happens to live in an affluent town. And charities ALWAYS act as filters/intermediators, to help you achieve a greater benefit from the money you'd like to give towards helping people. Complaining that you don't have any control over where the money goes seems a bit bogus to me. Maybe CIN will spend it better than I would if I donated it to the particular cause of my fancy (eg. arthritic gerbils?). Obviously some more accountability would help, but I don't think you should slag it off so much as a way of giving; if people aren't entirely sure about the specific ends they'd like to achieve with their donation, then it might well be a good option.


Submitted by JoshM on Tue, 14/11/2006 - 6:09pm.

I've got a lot of sympathy with Cameron's views on this, but it's also true to say that, if you CAN be bothered to make a choice about which children's charity to give to, then (it seems to me) that you should steer well clear of Children in Need. I'd rather not waste my money - though other, less informed people, might keep on so doing.


Submitted by cameronweaver on Tue, 14/11/2006 - 6:06pm.

So I get the message: CIN is run by a collection of lazy managers who don't care about what the public think. But can this really be true? Surely the organization encourages a lot of people to give each year who normally wouldn't - so in spite of the (admittedly valid) criticisms Adam comes up with here, there *is* some good in the old ted yet.


Submitted by Bafro on Tue, 14/11/2006 - 6:02pm.

Noggers, I have to agree. There was an article in the Observer last Sunday bashing CIN about their weird claim to have no admin costs - but this takes things a step further. I think it's time for the Beeb to adopt the same level of self-criticism for CIN as they normally show when covering other controversial work. The deference they show at the moment is just pathetic.


Submitted by Noggers on Tue, 14/11/2006 - 5:58pm.

What are these jokers playing at? If it's the law to submit two documents to the government then the dimwits at Children in Need should get their act together and Do It. If the people responsible for this cockup worked anywhere other than in a cosseted charity, then they would be out the door. This is almost unbelievable stuff, and just shows why charities sometimes need to realise they're responsible for large sums of money, and ought to behave responsibly with it.


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