Work 60 hour weeks for no pay!!! Woo-hoo!

Looking for consultancy and contract work for myself recently I cam across a set of listings for "jobs" in the voluntary sector that lowered my opinion even further of employment practice in the sector. Workers in the voluntary sector have been exploited for years: generally salaries are low, pensions are non-existent, workers work very long hours without extra pay, sick pay schemes are mean, maternity pay schemes are mean etc. There may be a small number of CEOs in the sector who earn big bucks, but generally no one in the voluntary sector gets rich. The expectancy on workers, managed by voluntary (unpaid) management committee members in a sector that prides itself on "volunteerism" are often huge. Obviously there are some exceptions, but they are few and far. And judging by the "job" ads I was looking at, things are getting worse. There are a huge amount of ads for volunteers, for interns, or even for workers or pay less than the minimum wage.

Let me explain in detail: (Extracted -and updated- from a guide I wrote for LVSC):

Employment StatusFirstly it is important to consider whether the person who is working for the organisation (or the organisation wishes to work for them) is actually an employee of the organisation, or is self-employed (i.e.‘freelance’).If the employer has:•    a duty to provide work
•    controls when and how it is done
•    supplies the tools or other equipment needed to do it
•    pays tax and national insurance contributions on the worker’s behalf

then it is likely that the worker is an employee.
If, on the other hand:
•    the worker can decide whether or not to accept work
•    how to carry it out
•    makes his/her own arrangements for holidays or sickness absences
•    pays his/her own tax and national insurance contributions
•    is free to do the same type of work for more than one employer at the same time 

This points towards the person being self-employed.

In simple terms, if the situation is that the organisation is obliged to provide work, and the worker is obliged to do it, then it is likely that an employment situation exists, and all the rules and laws applying to employees operates.  
An employee has an entitlement to certain rights. Many of these are set out in law, others in a statement of terms and conditions of employment and in other documents and policies.

Another sort of employment status that may apply is that of workers who are employed via an agency. 
Other workers who are not employees (eg self employed workers, agency workers) still have some rights, such as those related to discrimination law, health and safety (which includes working hours), and minimum wage.
Volunteers 

Volunteers are not employees, and therefore do not have the same rights as employees. However, some laws still apply to them, such as discrimination and health and safety law as outlined above. 
The key thing for voluntary organisations is to ensure they do not by mistake create an employment contract with volunteers, by creating the elements of a contract as outlined above. In particular this means
not paying volunteers anything over and above actual legitimate expenses i.e. not a general ‘allowance’ for lunch, or gifts or free access to training with a value (something that gives them a qualification), and
not creating a ‘mutuality of obligation’ – an expectation that a volunteer should turn up to work in exchange for anything.

If this happens they will not be considered a volunteer, and will in law be considered an employee, and therefore have employment rights like any other employee, including the right to a minimum wage (see below). Even if no written contract exists the simple existence of a ‘reward’ could be interpreted as signifying an employment relationship.
InternsInterns are quite simply employees and therefore all aspects if employment law apply, including minimum wage, entitlement to paid holidays, sick pay etc. It may be that an intern falls under the employment law definition of “apprentice”, and this impacts upon their wage entitlement – but on no other aspect of legal entitlement.

So all these ads for volunteers, interns etc? They are in all likelihood breaking the law. The jobs beng offered appear to be employment and therefore the people employed should be offered at least minimum wage plus (at least) minimum entitlements to holiday pay, sick pay etc. Oh yes - and health and safety at work law - which (amongst other things) limits working hours.

There are those within the sector who may be upset by this - a feeling that people should be prepared to be exploited by charities because its "a good cause" - I say charities should set an example and encourage - and promote - good practice as employers.

Worse than this, there are some in the voluntary sector who for unknown reasons believe that charities are exempt from all this legislation - well I have news for you, you are not. When you employ pregnant women they get maternity leave and pay, when people are sick they are entitled to sick leave, when people work, for goodness sake, they are entitled to reasonable reward. The Masters and Servant Act, I am glad to report, was abolished a long time ago. It's about time the voluntary sector realised this.

For further details see here (PEACe at LVSC) here (emplaw.co.uk) or here (NCVO) or here (Sandy Adirondack) .

Fundraising - how clear are you about it?

The fundraising industry is an interesting one. As I have noted before "face to face fundraising" (or "chugging" as most of us call it) is something I am not particularly enamoured with, but actually, the more I look at the whole industry of raising funds from individual donors, the less happy I am with the whole thing, the more questions I want to ask, the more information I want to know. The problem with donor fundraising is that the more you look at it the less straightforward it becomes.

On the face of it, it's great: charities carry out a lot of work the world needs, and people give money to pay for it. Want to help starving children in Africa? Give money - it helps!  I know I do.

Admin costs

But there's all sorts of problems. Over the years the concerns have been about how much charities spend on overheads and administration - but for me, as someone who has worked in the sector for over 30 years,  that has rarely been an issue. I know that if you employ lots of workers and volunteers and do lots of things that are worth doing there are numerous costs you simply cannot avoid that get counted in this way. Managing projects costs money, employing experienced qualified staff costs money, good employment practice costs money, looking after your volunteers costs money, postage, electricity, water... EVERYTHING costs money -  everybody has to pay the rent, the heating bills etc. So no question: whether you are running a small local charity or a major international one you are going to have overheads you can't avoid. And actually, ensuring the core costs of running an organisation are met is a huge challenge for every charity.

Fundraising costs

But what does concern me is the cost of fundraising. Charityfacts  state that each £1 raised by a charity costs between 15 and 25p, whilst the penny per pound cost of gaining NEW donors is 50-70p (we'll come back to this later).  But as they also note, this is based on an unregulated and inconsistent way of reporting how much fundraising actually costs - as costs can be included in project costs, organisation central costs or elsewhere on a balance sheet. So how accurate these percentages actually are, nobody is 100% sure.

The best place to find this information is on the website for CaritasData - or Charities Direct -  "the essential  uk charity information service". It lists fundraising costs as a % of total income and of total expenditure, and breaks down costs of raising "voluntary income" - i.e. donations (although annoyingly doesn't give this as a percentage). Given the variances of reporting this shows the rough accuracy of Charityfacts' estimates of 15-25% of income received actually spent on fundraising.

Now this on one hand may seem ok - people working hard to successfully raise money for a worthy cause - but what it really means in hard cash terms is that an organisation receiving a million pounds in donations spends over £200,000 on raising it. When that amount is extrapolated across the entire charity world it means tens of millions of pounds are being spent on raising funds. Hmmm. Does this seem right? Is that what you wanted to pay for?

Another interesting thing to consider is that in most cases these are pretty much fixed costs: the costs of hiring an agency, or employing staff, of mail outs, advertising campaigns are pretty much the same whether you raise a thousand or a million pounds.

How do charities get their money?

There is a standard way large national charities raise money (with one or two exceptions). Most earn some money from services they deliver, whether that is via payment from clients or contracts from government agencies (e.g. local Government, NHS Trusts), but rely on most of their income from individual donors. Some of this is received in the form of legacies, but most of this is via direct donations from individuals. A lot of this comes from Direct Debits people sign up to either by responding to an advert or an appeal, or by being chugged in the street. The standard method is signing people up to a regular small monthly payment ("Just £2 a week will prevent this child/donkey/dog from dying/being tortured/etc") - because it makes people feel they are achieving a lot by contributing what for them is very little, and getting people tied up for the long term is in fact the charities' instated aim. In actual fact, mostly with this donation they are achieving bugger all. The administration and fundraising costs (which as we have already noted are mostly fixed) are met by these donations, so the charity from here on in has no fundraising costs worth talking about. If you just give this £2 a month you aren't really doing anything other than paying for fundraising costs. But they have hooked you onto a mailing list as a supporter, and as anyone knows who has signed up to donate like this - boy will they badger you month after month for more of your money. The only point of the £2 a month is to be able to pay for the effort to get you to give more. So, as noted earlier, the cost of getting NEW donors is a lot more than of getting existing donors to cough up more money. Actually I'm willing to bet (since there is very little chance of anyone being able to challenge me) the cost of NEW donors is actually more than most charities care to admit, and that 50-70p per £1 is a major underestimate. The costs of donations raised by chuggers, for example is not usually met within the first year of donations: in other words, if you sign up for a year of donation on the street the charity actually gets .... nothing. Until sometime during year two. (See CharityFacts  and the Professional Fundraising Regulatory Agency (PFRA) for figures given by fundraising/charity organisations). Actually, until that point, none of this money even goes in the charity's pocket (unless they are doing chugging in house - rare but the Red Cross does it), but to a private fundraising agency.


Private Fundraising Agencies

And that's just chugging. There are a growing number of private agencies dedicated to raising money for the charity sector. For a list of agencies approved by the PFRA see here . To see which national charities are using their services you can go to the agencies' individual websites, but I can list a few I've noticed here: Amnesty, Greenpeace, Friends of the Earth, Guide Dogs for the Blind, Save the Children Fund, Shelter, NSPCC, Battersea Dogs Home, Great Ormond Street Hospital... and many more. Apologies to the ones mentioned if they feel singled out, but the point I am making is that it is clear from a very brief bit of research that there are large fundraising agencies making a lot of money from large national and international charities - and from your (and my) donations. How happy about this am I? How happy are you?

For me the issue is this: I don't mind charities employing fundraisers. I accept this is necessary to an extent: but I expect them to be straightforward and honest about how they do it, and how they spend it. I don't like them telling me that "£2 a month is all it takes to save this child's life" when they know that my £2 a month will go straight in the pockets of a fundraising agency. I don't mind if my contribution goes towards paying the salary of a fundraiser for a big charity, but I do mind that it is going in the pockets of a private fund-raising agency. Why? Because I have had dealing with these agencies, and they aren't the most transparent, straightforward, or even charitable, organisations I have dealt with.

Let's compare them to the charities we noted above: as I reported, all information on charities and their income and expenditure is pretty transparent. Information about any of these companies, and the profits they make, is pretty much invisible.

Chocolatey goodness

The fundraising part of the charity sector is, in some ways by necessity, the most commercial part of the sector. Those working in fundraising are working in the least admirable part of the sector - their job is raise money, not to rescue kittens - and people working as fundraisers know this. If you ever meet a more defensive group of people I will be amazed: fundraisers feel they often have to get their hands dirty to raise the funds to ensure the work gets done. Fundraisers will portray a charities' clients as victims suffering (preferably with big puppy eyes) whilst other charity workers will emphasise the strength and dignity of those they work with. In my experience, in many large charities those actually working with clients don't mix very often with the fundraisers, the fundraisers often feel they are looked down upon. This is unfair.

On the other hand fundraisers often (it seems) view those they raise funds from with little respect. They target individuals and groups of individuals in the same way the advertising industry does - and in truth the connection between marketing and fundraising is huge, with often many cross overs. In the private sector, the similarities are even closer. So what's the difference between an advertising agency and a fundraising agency? In essence the difference is only one thing: product. So here's the question: do you mind giving 25% of your money spent on a chocolate bar to an ad agency? Of course not, that's not your business, as long as you get your chocolatey goodness. 
What then is the problem with 25% of the money you give to a charity going an ad agency?

There is a big difference between buying a chocolate bar and giving to a charity. In the first transaction you are totally buying into a capitalist transaction for entirely selfish reasons. In the second transaction your actions are charitable, benevolent: even assuming modern cynicism people do not donate to a charity to gain from it: there is no chocolate for them, but instead for someone else. The whole transaction is different, with different intentions, and thus it is not unreasonable to expect different outcomes. People assume when giving to charity that individuals are not profiting, just as they assume U2 are not being paid when they perform at LiveAid.

Furthermore, when you sign up for a charitable donation, mostly charities will get you to sign Gift Aid forms to ensure they gain an extra 20% from the government instead of your money going as tax. Now hang on a minute - this means two things:  if the charity gains 20p in every pound you give from the government, the amount you were giving is actually even less useful (e.g. they were only making 50-70p out of every 80p you gave not £1), and secondly this means that government money is going in the pockets of these agencies - instead of to schools, hospitals and, ok, royal yachts and bank bailouts.

Regulation and transparency 


As noted earlier there is information published regarding the income and expenditure of charities which helps to some extent regulate and ensure the transparency of how charities operate. Fundraising agencies are regulated by being members of various fundraising regulation bodies: the previously mentioned Professional Fundraising Regulatory Agency (PFRA,) the Institute of Fundraising (IoF) and the Fund Raising Standards Board (FRSB). This is supposed to ensure that they are a professional group of regulated organisations, but lets take a further look at this. What are these organisations exactly?

The FRSB says it is "the independent self-regulatory body for UK fundraising" and was set up in 2006. It is supported by the governments of England, Scotland and Wales, and on its board it has representatives from charities, from the PFRA and various "lay" members with experience in the sector. It  has over1,000 members and manages complaints from individuals regarding fundraising. In 2010 it recorded 18, 442 complaints. I don't really know what to say about this except the following: it seems like a worthy organisation, it doesn't have many members (given there's more than half a million charities in the UK),  and that's a hell of a lot of complaints!
The FRSB plays the amount down by using a formula of number of complaints against numbers of donor transactions . For example only 103 complaints about cash collections against 2,110,317 individual donations thus giving a percentage of 0.005%. Now you don't have to be Einstein to see this is shite. The truth is this: people don't tend to complain, so to get over 18,000 reported complaints in a year IS A LOT!! Anyway, the organisation's role seems to be one of reporting and advising, rather than regulating, and it has no powers whatsoever. Of the fundraising agencies noted above only one or two said they were members of the FRSB.

The IoF is a different animal altogether. It is actually a membership organisation for fundraisers, and thus is the organisation that represents the interests of fundraisers, and fundraisers alone. It claims to "set standards" and to "educate" fundraisers - but offers no regulation.

Finally the PFRA.  This is the "Regulatory" body for chugging - sorry I mean "face-to-face" fundraising. However it is entirely a self-regulatory body -its membership (who pay fees that pay for the organisation's existence) is entirely made up of charities and fundraisers. It claims to regulate chuggers by monitoring their activity, and by offering an accreditation process. If you can't meet the standards they require, you can't be a member. Does this stop you from doing face-to-face fundraising? Er...no.  The PFRA appears to be more than anything a membership body working on behalf of fundraisers, ensuring they cabn all compete with each other ion a level playing field. What it does for donors is debatable, to say the least. What it does for its members its to argue and campaign in favour of chugging (they are very good at getting comments on blogs apposing chugging) Amusingly, it does a pretty poor job in arguing against charges raised against chugging: read the website here which gives you plenty of reasons to loathe chugging, and some very weak arguments in  its favour.

So there we have it: what there is is a proliferation of professional bodies that operate in the interest of fundraisers. There is no regulation, no responsibility taken by the Charity Commission or by anyone else. There used to be an independent organisation called Intelligent Giving that investigated things like this: but it was loathed by the fundraising industry (they used to spend an inordinate amount of time attacking it for no one's benefit but their own) but that un fortunately got closed down, and all that remains of it is here.

But where is the money going to come from?

This is the sad cry of the fundraiser who is under attack for their standards. Charities need to raise money to carry out their activities - even more now than ever given the enormous amount of stupid cuts implemented by the Government - I can have no argument with that. Can I argue about their methods? Yes I can, and will continue to do so. Like most people who are happy to give to worthy causes I expect those I give to to be honest and play fair with me. If they use a fundraising agency i want them to tell me. If they use a fundraising agency I want to know about that agency - its profits, its practices and attitudes. If I want to give to a cause, I don't want my money going in the pocket of some private profiteering agency.

Give local

One way around this is to give local. Local projects need your funds as much, and if not more than, these big national charities. Check it out on Caritas: whilst researching this article i noticed that one charity I have given money to before last year made a profit of over a million pounds which added to its healthy reserves (over11 million quid). The total annual income in most boroughs of small charities is only a few million (and getting smaller). Many have closed in the last year for want of a few thousand pounds. And very few of these can afford to employ a single fundraiser, let alone hire in an agency - their ability to gain donations is severely limited by their size: so if YOU care about ensuring your money gets well spent in a good cause, why not look to supporting those who need support in your local community.

Chugging...again

A couple of years ago I joined in a debate with various fundraisers and other interested parties on the lamented "Intelligent Giving" website (see blog entry http://sectorthree.blogspot.com/2008/11/chuggers.html). This week, whilst reading Third Sector magazine online I notice a piece on proposals from the council in Islington to ban chuggers off the streets of the borough. "Good" I thought, "About time", and added my two cents worth of comment. The next thing I knew was an email from Third Sector, and interview and today's lift;e article. And now I'm being contacted by a radio station in Dublin regarding this.

It is an interesting issue, as far as I am concerned, because I am unconvinced by the benefits of chuggers and chugging. Research by Intelligent Giving - and others - has shown that actually charities benefit very little from what chuggers bring in. Normally chuggers ask people to sign up to direct debits for a few quid a month. It has estimated that it is a year and a half into these direct debits, however, before the charities get a penny - before that all the money raised goes to the agencies paid to collect the funds. After that, if the amounts are in the £2 to £3 a month level, the amount the charity gets is not worth receiving - all it does is cover the admin costs of raising the money in the first place, and the costs of employing the fundraisers.

AS for the people on the street - they don't work for the charities they are collecting for, they work for the agencies that engage the charities, and are employed on a performance-related basis - in other words they don't get paid unless they get signatures. Thus good employment standards, minimum wage etc, go out the window.

There is a Professional Fundraising Association (yes, that's right, an organisation for fundraisers run by fundraisers) that oversees practices in the fundraising business - but frankly it is hard to see how they justify this - or quite a number of other - kinds of fundraising, except to justify their own existence. "Charities need the money" they wail, and of course it's true, and need it even more now they are losing Government funding (local, regional and National) for grants, contracts etc. And losing out on donations as the poor get poorer in all of Europe.

But who suffers as a result of chugging? Why should I object? Well I believe that actually, apart from fundraisers and private fundraising agencies, no one gains from chugging and everyone else loses. People in the street lose out because they are irritated and ironically a lot of the charities lose out themselves because of people's irritation; but most of all, in a place like islington it is local charities, local community groups and local people who lose out: Charities' names are tarnished in general, and those that DO give to chuggers give to national causes (or rather the agencies that collect on their behalf) DON'T give to local organisations. Street collecting for a local hospice or children's centre or other community project gets pushed out. Banning chugging from the streets (of Islington or anywhere) is something I can only applaud.