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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in Need has significantly improved the quality of its reporting - which means a lot of the criticisms below are no longer valid.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. [0]) 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 [0]) 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 [0]) 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.
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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 [0], or Award-winners [0] or Experts' choices [0].
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 [0], 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 [1]. 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 [2]
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