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Stephen Hopgood
- Thursday, August 2, 2007
WHY DOESN'T OXFAM GIVE UP its charitable status and sell its brand for all it’s worth? It could lease marketing rights to any company willing to pay a good price, and produce and sell branded merchandise of all kinds as widely as possible. Then, with its larger cash pile it could do more emergency work, more development, and run bigger and better global campaigns that – freed from the shackles of not being political – can use any and every means to persuade donors to give money. If it makes commercial sense, why not?
In the post-Cold War world, private sector firms are increasingly involved in bidding for government contracts to do humanitarian work, and non-governmental organisations like Oxfam and Amnesty International employ ever-larger numbers of core staff with commercial skills ranging from management and marketing to website design and logistics.
"The charity line used to exist because no commercial firm could turn a profit from saving the poor"If both firms and charities are now in the business of helping as many people as possible, why would Tesco not be an acceptable bidder to do emergency relief if it can save more lives more cost-effectively than Oxfam? And if this is so, has the dividing line between commercial and charity work all but disappeared?
This line used to exist because no commercial firm could turn a profit from saving the lives of the poor, governments regulated access to these populations, and humanitarian organisations only survived by attracting smart people to work for next to nothing because they were committed to the cause. Now this has changed. Charities are being forced to professionalize to raise money, members and profile, raising the question of what separates humanitarian work from commercial service delivery?
The two obvious answers – that aiding those who suffer is an end for Oxfam and a means for Tesco, and that humanitarinism requires one to have altruistic motivations – don’t stand up to much scrutiny when, in saving lives and enhancing welfare, outcomes are what matter. Charities now pay closer to market rates for key senior staff, tacitly accepting that skills, not motivation, is what they are after. And as Oxfam is prepared to accept private capital to finance its business, whether from Starbucks or Royal Bank of Scotland or Mastercard, it presumably has no qualms about turning corporate greed into survival strategies for the poor.*Perhaps being a charity is a quality signal in the marketplace?** It says, ‘Give us your humanitarian pound, you can trust us to spend it in the way you want. Tesco will cut costs and divert your money into profits.’ If this is the reason to stay with the charity label, then it too is about enhancing Oxfam’s money making capacity. Is there nothing about Oxfam’s identity – a specifically moral ethic – which means it must remain a charity because that is what it is, intrinsically?
Would we still give Oxfam money if it said, ‘We’ll save fewer lives than Tesco but do it for the right reasons? Oh, and by the way, we want you to give money for the right reasons too'?
What is going on if working out the real difference between Oxfam and Tesco can be so difficult, and if the money of saints and sinners is just as welcome for charities? And should we care?
• Stephen Hopgood is Senior Lecturer in International Politics, School of Oriental and African Studies, University of London
* For Oxfam’s remarkable tie-in with Mastercard, for example, see this YouTube clip.
** See ‘Not-for-profit entrepreneurs’, Edward L Glaeser and Andrei Shleifer, here.
Amen to that Martin. Business really isn't the great evil. As long as any relationships that you build don't tarnish the reputation of your charity and you don't allow the corporate partner to determine your aims, objectives and mission ,then corporate fundraising really is a win-win. Not only can you secure ongoing income based on mutual benefit (rather than a handout), but you're also demonstrating a willingness to help yourself.
Don't shoot the messenger
Exactly what is wrong with running a charity as a business?
The same requirements regarding bill paying, salaries, having to get money in and so on exist both in charities and business.
I've come across some great charities in the past that operate as charities not businesses. None exist now, all folded due to concentrating on running services and not concentrating on getting cash flow at a reasonable level.
Without being able to pay the bills, can a charity exist?
I've met some great trustees of charities. And rather more trustees that have no experience of business, no idea about how a business runs. Yet run what is in reality a business.
Perhaps if more charities copied the likes of Tesco, which grew from tiny beginnings to having a large share of its market then we wouldn't have quite the same problems regarding being able to afford charitable services. Or their logistics. :)
Martin
Spot on anon, but what's your point Gutenberg? You state that 'big players' have stopped being charities because "they are run as businesses" and employ "PR and marketing firms" - well if that's the most efficient way of securing a return for the good of their beneficiaries then so what?
Should a charity really be defined by a culture of well-meaning incompetence and inefficiency? To my mind that's selling the organisation and its beneficiaries down the river just so that the staff and volunteers can feel smug about themselves. In my experience there's a prevailing sense of moral superiority in the charitable sector and it's totally counter- productive.
Don't shoot the messenger
If all that Oxfam did was tender for work from governments, then you might have some point. Likewise if all that Oxfam did was deliver aid.
However Oxfam raises money from the public to spend on three strands: disaster relief, long term development and campaigning. The first strand is increasingly susceptible to market pressures as DfID and the like put more contracts out to tender. The other two are much less likely to work through a market.
Oxfam needs its camapigners and supporters to work for nothing - not even Tesco has managed that yet!
Yes Oxfam uses commercial talents. The salaries are still pitiful in comparison to their commercial equivalents.
The danger in such a debate is that the part of Oxfam that is really effective - challenging and lobbying governments and institutions across the world - would disappear under such an arrangement. This might be covenient for governments, but very bad for the poor.
Whilst it is a fair point that Tesco may be able to deliver aid more efficiently than Oxfam - because of their extensive experience in logistics - Hopgard is forgetting that a company that essentially sells groceries in rich countries (over 3/4 of Tesco's profits come from the UK) has no experience in identifying who needs aid. This is not as simple as it may appear, OXFAM and all other relief agencies have through a process of trial and error created a number of different techniques to deliver aid to the most needy. Perhaps in a few years we will see Tesco and OXFAM forming a spin off company OXCO, with Tesco creating a more efficient supply chain and OXFAM identifying who needs help!
I think Hopgood misses an important point: that Oxfam, and other big players, have already stopped being charities in the way most people think of them. They are run as businesses, they employ City PR and marketing firms to sell themselves, and they even run customer loyalty schemes for their donors. Oxfam's staff I'm sure want to do good. But it's only their motivation that distinguishes them from a company, even now.
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