Topic: BusinessManagement

Last updated: May 7, 2019

Once upon a time, a man walking along a beach saw a boy picking up starfish and throwing them into the sea. He asked the boy why he was throwing starfish into the sea. The boy replied, “The tide is going out”.

If I don’t throw them in, they’ll dry up and die.” The man smiled patronisingly and said, “But, there are miles of beach and thousands of starfish on every mile. You can’t possibly make a difference!” They boy smiled, bent down, picked up another starfish, and threw it into the sea. “Well,” he said, “I made a difference for that one.” One might think this was an effortless act of kindness. Others might identify the principle of morality that the story passes on. It is a very common one, which multiple charitable organisations from the UK conform to in their activity.

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But to what extent is the principle functional in real life, not story wise? Donating to charity has become rather controversial in the 21st century, with skeptic reasoning of what used to be a utilitarian deed. But what awakened such polemic around “non-profits”? What’s the legality of their agenda? Is philanthropy a deeply communist phenomena? What’s the incentive of those demographics that donate the most? Where does the money actually end up? In this Extended project Qualification Research, I aim to analyse the purpose of charities as well as how they have developed over time to understand whether their goal is being satisfied and gratified by the 21st century British society. Taking into account the underlaying specific of philanthropy such as morality, ethics and dreams of an utopic world, I will further investigate the extrinsic factors that have challenged the primitive drive behind a charity’s goals.

At the end of this research, I want to be able to know whether I personally should give to charity and how to choose the “starfish” that needs my contribution the most. History of Philanthropy Philanthropy has been shaped by a lot of historical processes such as urbanisation, growth and development of cities and religion. It can even be traced back to Tudor times and the schism between Catholicism and Protestantism following the decision of Henry VIII to leave the Church of Rome. Whilst good old Catholicism was more focused on the act of giving and how it was a contribution to the donor’s path to Heaven, Protestantism focussed on what donations achieved in reality, which led to attempts of understanding the underlying causes of social issues. Previously, one could easily decide where and how to give, based on the obvious problems of those in need. However, urban settings made it harder due to the big number of those seeking assistance and impossibility to grant help to all of them. Decisions had to be made now logically rather than as random gestures of goodwill.

This was one of the driving forces behind the development of “associational philanthropy”, which began in the mid 17th century.According to David Owen, “it was out of the question for the philanthropist, however well disposed, to seek out the cases of greatest need and to become familiar with them. The consequence was, of course, to stimulate the growth of charitable societies serving as intermediaries between individual philanthropist and beneficiary… Thus the nineteenth century saw the charitable organisation come to full, indeed almost rankly luxuriant, bloom.” 1601 was one of the major checkpoints of philanthropy because of the introduction of the Statute of Charitable Uses, which outlined what could be labelled as ‘charity’ in the law and it listed: the relief of aged, impotent, and poor people; the maintenance of sick and maimed soldiers and mariners; schools of learning; free schools and scholars in universities; the repair of bridges, ports, havens, causeways, churches, sea banks, and highways; the education and preferment of orphans; the relief, stock, or maintenance of houses of correction; marriages of poor maids; support, aid, and help of young tradesmen, handicraftsmen and persons decayed; the relief or redemption or prisoners or captives; and the aid or ease of any poor inhabitants covering payments of fifteens, setting out of soldiers, and other taxes.

The 1601 Statute Law layed the foundation of a charity’s goal – to benefit the public, which is now entrenched in the UK uncodified Constitution. The public benefit remains as a main aim, outlined as an entire section in the Charitable Act of 2011 (Section 4). Thus, one could draw the conclusion that 400 years might have changed the interpretation as to what ‘public benefit’ is, but it did not alter its ideal. Modern CharitiesNowadays, there are 165 000 registered charities in England and Wales and as much as up to 900 000 informal community groups that might or might not have charitable purposes. That’s just one country with over 1 million organisations one can contribute to.

If an individual does decide he wants to help, what defines his choice?The drive to make philanthropy more evidence-based in the past had this controversial facade. Backing up everything with factual arguments provides efficiency and ensures aid to those with the greatest need. But how can we label “need”? There is no such thing as the ‘deserving’ and ‘undeserving’ poor. Charity is not just people getting together to build a school or clean up a neighbourhood anymore. This is the question of modern day charities and what stays in the way of hitting that goal – the complex process of deciding what is the most urgent issue.

The New York Times proposes a scenario in one of its 2013 articles that explains the toughness of reaching such a resolution. “Suppose your local art museum is seeking funds to build a new wing to better display its collection. The museum asks you for a donation for that purpose. Let’s say that you could afford to give $100,000. At the same time, you are asked to donate to an organization seeking to reduce the incidence of trachoma, an eye disease caused by an infectious micro-organism that affects children in developing countries. Trachoma causes people to slowly lose their sight. You do some research and learn that each $100 you donate could prevent a person’s experiencing 15 years of impaired vision followed by another 15 years of blindness. So for $100,000 you could prevent 1,000 people from losing their sight.

“”Fast forwarding ahead, suppose you have a choice between visiting the art museum, including its new wing, or going to see the museum without visiting the new wing. Naturally, you would prefer to see it with the new wing. But now imagine that an evil demon declares that out of every 100 people who see the new wing, he will choose one, at random, and inflict 15 years of blindness on that person. Would you still visit the new wing? You’d have to be nuts. Even if the evil demon blinded only one person in every 1,000, in my judgment, and I bet in yours, seeing the new wing still would not be worth the risk”This sort of synopsis puts things in perspective. We are all giving up on that museum wing, because life is superior to it. But what if there’s no museum wing? What happens when there are two lives at stake? How do you measure worth of life? Solving effects or dealing with the causes?No matter what the profile of the charitable organisation is, they’re all allegedly fighting for a common goal – save life or improve it. You can’t help everyone.

Fact. Are there lives more worthy of saving? Not a fact. Is saving more lives later worth of sacrificing a few at the present moment? Who knows. Philanthropists keep analysing the above, most probably looking for an answer that would excuse potential momentary or even permanent failures of charities. As history itself concludes, the debate over reactive actions versus cause treatment traces back to the 16th’s century schism.

For instance, charities such as ‘Save the Children’ or ‘British Red Cross’ provide shelter, first aid and medical assistance to children all over the UK, and not only, to diminish the poverty gap. However, children live with adults and rely upon those adults for their economic well-being. By and large then, children are poor because they live with adults who are poor. Thus, to understand child poverty one must look to the causes underlying adult poverty, such as economic and demographic forces and factors affecting individual earning capacity.5 million working age adults were in absolute low income BHC in 2016/2017, proportional to the 2.7 million children. The graphs go almost hand in hand, supporting the idea that children are dependent on adults, therefore, their poverty is as well.

So offering poor children temporary shelter or first aid will not prove efficiently, because it doesn’t target the core of the problem. It is believed that such charities are offering only short-term solutions, whilst being dysfunctional and money wasting in the long run which is why, charities might be failing to meet their purpose in the modern day society. But should we and charities such as the Red Cross and Save the Children then quit helping them and invest all efforts in culturally, politically and socially exterminating poverty? Here’s where the story you read in the beginning comes into play. Would you ‘save’ directly one single starfish today or ‘save’ indirectly all the starfishes out there but see results only in 20 years time? Up until the point where all starfish are safe, a lot will inevitably die. Would you still choose the second option? That’s the morality question behind so many modern charities. Some abide by the short term method, some by the long term practice. However, I side with those who find their existence purely symbiotic.

Philanthropy’s goals are to benefit the public. By benefitting it today promptly, but also investing into its latent solving is how we will serve out charitable goals. Inefficient methods of charitable giving? Having studied History A Level, I found a great correlation between Stalin’s Russia, collectivisation and Five Year Plan and the way charities operate nowadays. What is their common denominator? Both do not fully serve their goal due to inadequate approaches. Stalin’s five year plan aimed to make everyone’s wealth uniform, without taking into account the particular needs and abilities of each individual and what their contribution to society could have been.

The idea that charities are deeply communistic struck me, the parallel seeming impossible. After all, Stalin had ulterior motives while charities’ desire to provide relief comes from a good place. However, this article I stumbled upon confirmed the similarities I distinguished. Amanda Achtman argues that “even private charity can be communistic when private givers allocate resources completely ignorant of the particular circumstances of the recipients”. She puts forward simple examples noticed in her own community. “… at Christmastime, homeless persons in my city received an overwhelming amount of cakes, cookies, and pastries.

Many of these went to waste because there was a surplus of sweets when what persons were lacking was a healthy meal. Many children gave blankets to the homeless through their schools. “It’s the thought that counts,” some will say.

However, for many of the homeless, they have blankets, but need, for example, jackets.””…local Christian churches donate hundreds of sandwiches for the homeless. There are many immigrants at this shelter and many of these immigrants are Muslims. Christians donate hundreds of ham and cheese sandwiches, but do not realize that these do not get eaten by the Muslims who do not eat pork as a religious dietary restriction. To say, “Beggars cannot be choosers” (as often happens) is disrespectful of the basic human dignity  that truly generous persons should not deny, but rather affirm by their giving”.If the communist principle of the greatest happiness for the greatest number were to be followed in the society, this is what it would look like. Impersonal allocation of resources is not an act of kindness, it’s a waste. Tim Harford, British economist makes a case against philanthropy in one of his articles, stating that:”Even the way we choose to dole out cash betrays our true motives.

Someone with $100 to give away and a world full of worthy causes should choose the worthiest and write the check. We don’t. Instead, we give $5 for a LiveStrong bracelet, pledge $25 to Save the Children, another $25 to AIDS research, and so on. But $25 is not going to find a cure for AIDS. Either it’s the best cause and deserves the entire $100, or it’s not and some other cause does.

The scattershot approach simply proves that we’re more interested in feeling good than doing good”.He builds his case around altruism and how that is not the true motive behind volunteering, NGOs, donations and so on and so forth. However, my investigation proves that altruism was never part of the official equation. It was motivation for some, but charity was ultimately about benefitting the society, no matter what everyone’s personal reason was to do so. Perhaps, this is where inefficiency roots in -lack of altruism. One can donate simply because he is moving house and needs to get rid of some stuff. This doesn’t make him altruistic, and it’s not a given that there will be someone needing his stuff. However, if at least 5% of his donations end up in a place where they are essential, than charity has met their goal, even if only to a minor degree.

Are charities self-serving?A study conducted by Konow and Earley, known as the “Hedonistic Paradox” states that homo economicus, or someone who seeks happiness for him- or herself, will not find it, but the person who helps others will. But the study also examines how it’s not giving that makes people happy, it’s happiness that makes people give. Opposingly, Cialdini (1987) showed that watching another person suffer a mild electric shock motivates helping in an observer through a sense of heightened empathy and increased personal sadness.Therefore, giving occurs either because we are fueled by well being or because we feel pity. The human ability to empathise is increased when it lis linked to an issue or a cause the individual has personally dealt with. By taking a look at the contributions of the wealthiest UK donors we can confirm that with precision:Lord Sainsbury went to Cambridge University, has donated £127m to the institution. He is now Chancellor of Cambridge University.Michael Moritz, graduate of Oxford Christ Church College has donated £25 million to Oxford Christ Church College.

Robert Edmiston, an evangelical Christian, funds Christian Radio across Africa.John Templeton, served as an elder of the First Presbyterian Church donates exclusively to church charities.Peter Cruddas, the son of a market trader donates to enable children who have a background like his to succeed.JK Rowling, famous for being a single mother and whose mother battled multiple sclerosis donates to One Parent Families Scotland ; Multiple Sclerosis Society Scotland.The correlation goes on indefinitely. We don’t choose to give to the most deserving, we choose to give to the most like ourselves. We only identify emotionally with the struggles we have had, we only truly recognise suffering when it is suffering we have felt.Moreover, a lot of rich people donate incentivised by their own sins.

Imagine your friend brings a banana with him at school. You eat it without asking permission, they get mad and you feel guilty afterwards. AT the lunch break, you buy him two bananas in return. Not that great of a sin, is it? Now imagine that the only reason your friend got that mad was because he is a diabetic and he faints because of low blood sugar levels if he doesn’t get regular sugary snacks. The two bananas won’t help him much now, will they? This parallel shows, even though on a much smaller scale, why some donate to feel themselves feel better about their own self and actions.The “oh-so-philanthrophic” individuals that donate almost to themselves are not a rarity nowadays either. Even Facebook co founder, Mark Zuckerberg and his wife have launched own Limited Liability Company, which they donate/invest 99% of their Facebook shares. This gives them more control over their own “donations” that are now liable from tax.

Domestically, every UK subject that pays taxes is allowed by the Treasury to redirect a portion of his taxes to charity. The upper rate taxpayers, even though representing only 1.2 of the Britain’s population, contribute lots. However, reality tends to prove that those people who accumulate great wealth always do so at the expense of others. And if donations occur just so someone could further their own agenda or feel emotionally fulfilled, it takes the charitable out of charity. Benefitting the recipients refers to those who do need the help, not a singe individual, and this is where charities fail their goals.

Questionable methods Criticism of charities often include their questionable methods of fundraising, often immoral and opposing the values that the charities themselves carry. For instance, the annual Presidents Club Charity Dinner is an event/tradition established 3 decades ago and takes place at the beginning of each calendar year. In 2018, the gathering’s official purpose was to raise money for the Great Ormond Street Hospital, the world-renowned children’s hospital in London’s Bloomsbury district. It is well known that charities engage in legacy profiling – ranking and target donors based on their wealth. Looking past the hypocrisy of such a method, it turns out to be highly functional and this event was no exception. Auction items included lunch with Boris Johnson, the British foreign secretary, and afternoon tea with Bank of England governor Mark Carney.

The most audacious thing about the philanthropic evening wasn’t that it raised 2 million pounds, but the fact that it was men only. However, the event wasn’t lacking female presence, thanks to the 130 hostesses that didn’t know what they were signing up for when accepting the job. They had been groped, sexually harassed and propositioned by the attendees all night long. A spokesperson for Great Ormond Street Hospital said: “We are shocked to hear of the behaviour reported at the Presidents Club Charitable Trust fundraising dinner.

We would never knowingly accept donations raised in this way. The Presidents Club also commented, saying that: “The Presidents Club recently hosted its annual dinner, raising several million pounds for disadvantaged children. The organisers are appalled by the allegations of bad behaviour at the event asserted by the Financial Times reporters. Such behaviour is totally unacceptable.

The allegations will be investigated fully and promptly and appropriate action taken.” The dinner came under further fire from Labour MP Jess Phillips and other critics who were upset that it had excluded women guests in the first place. Reading all of this led me to question whether objectification and sexual harassment are justifiable when it’s for a noble cause? And are they absolutely essential for raising that money or is it just choosing the easiest way? This is not just making pretty girls sell lottery tickets, this is legally punishable behaviour meant to raise financial capital. Is it any different from prostitution if it’s done by high profile individuals or leads to children benefiting from health services? No. Same goes for the Oxfam prostitution related scandalthat made headlines in the winter of 2018.

Allegations against Oxfam workers have been made on the account that they paid underage girls for sex while on an aid mission in Haiti, country that was trying to recover from an earthquake. The rumours have been covered up and further allegations of sexual abuse, bullying, harassment and intimidation in the aid sector soon followed. Prostitution is not only against Oxfam’s code of conduct but also against UN guidelines for aid workers.This goes directly against the 2011 Charity Act where charitable purposes include the advancement of human rights, not their violation. Another form of rights violation is data stealing.

Donations are the main source of income that charities have and targeting each category of sponsors is done differently. Private information stealing is no wonder in the charities world. Donors might choose to provide a limited amount of information in surveys or when entering an organisation’s website. But the data we chose not to share still gets found out thanks to new tactics of filling in the gaps. For instance, your old telephone number could help find your new one out. Your email – direct access to your postal address. This aids their access to you and to a variety of sources to contact or spam you for money. It’s not bad to ask for money, but if it goes down to data stealing, it becomes problematic.

Moreover, a lot of charities are part of conglomerates or engage in partnerships, which leads to common exchange of donor information. Your data gets passed not only to charities with the same profile as the one you’re interested in, but also to random ones. Therefore, an animal care activist could get called by a humanitarianism organisation, homeless hospice, local church but also by a young footballers association, who in their turn will be passing your personal info as if it were an actual ball, not personal information. As I have concluded above, charities do not have to be fully about altruism when they’re fulfilling their goal. But the underlying particularity off their goal is paradoxically not undermining their own goal by engaging in something they are against. Prostitution and data stealing are just two examples of how the ends don’t really justify the means in the charity sector.

The ethical consideration of what you did all along does not make someone a hero at the finish line. So when charities are benefitting a section of the public by harming another, it’s not only them not serving their goals, but also being hypocritical.Where does the money go?Having just talked about Oxfam and how their funding goes to hosting parties and paying minor prostitutions raises a question about where the public’s donations end up in reality. The CAF UK Giving 2018, published by the Charities Aid Foundation shows which areas of the public/private sector people choose to support and also what the givings consist of. The second graph shows in what form people choose to help the causes they support, which in 2015 consisted of 55% cash. In 2016 the numbers increased to 61%.In the UK, there are 600 charities seeking a cancer cure, included in Medical Research. There are also around 350 charities for birds, which links t so that’s o animal welfare.

People are donating to each and every of those charities, probably aware of the fact that they all have CEOs, paid workers, offices and what not. But don’t these charities compete with one another for the taxpayers’ money? Appealing to individual donors is expensive, especially when thousands others are trying to do so as well. This is not a sector where competition is beneficial.

By the time charities convince us to part with our money half of that donation has often already been lost simply because they have had to work on taking that money from us. Back in 2017, The Charity Commission has issued a stark warning to a Derbyshire charity – the National Hereditary Breast Cancer Helpline – after it emerged that the organisation spent just 3 per cent (around £27,000) of its total expenditure on charitable activities in 2014-15. Over £800,000 – went on “fundraising and other expenses”.The average CEO of the UK’s top 100 charities is paid £255,000 a year. Fourteen of those charities paid their highest earners more than £300,000.But a report by the National Council for Voluntary Organisations (NCVO) found that of all registered charities, 91 per cent have no paid staff at all and are run by volunteers.

The remaining 9% provide jobs for 800,000 people, which is a charitable act itself, decreasing unemployment rates. Nevertheless, let’s not forget about the statistics mentioned previously that state that only 165 000 out of almost a million charitable organisations are officially registered as charities. Gina Miller’s True and Fair Foundation has investigated all England charities that registered fundraising sums over £500,000 in 2014 (5,543 in total). The results showed that one in five organisations spent less than 50 per cent of their donations on good work, and that 292 charities spent 10 per cent or less on charitable activities..

Although coming from a good place originally, charities have become more of a business nowadays, if considering how the money people doante is spent in reality. Advertising, managment expenses, further investments and salaries take up circa half of the total amount of donations and charitable sepnding vanishes in the background. Consequently it’s not the case that money is needed in order to keep charity going, it’s charity needed in order to keep the money going. For this very reason, one can consider that charities are serving as a disguise rather than their purpose. Conclusion Having defined what charitable purposes are in the very beginning, I went through the technicalities, the ethics, the methods, the controversies, the surface and the depths of humanitarianism. As a result of the investigation, I can surely conclude that I would donate to a charity. However, the rationale behind my charity of choice would require thorough research and wouldn’t be such a random decision anymore.

In the ultimate instance, charities do serve their purpose. But at this point in time, it’s not the initial purpose. Each charity defines it’s own goal and has different ambitions. And so does every donor. Society has shifted into a deeply capitalist direction and charities had to follow through. The initial aim of philanthrophy is still there, it’s just humankind that have found their way around it in a modern era. All the questionable methods of fundraising, the not so altruistic desire to help, the inefficiency of giving and the business like management of charities are certainly reducing the extent to which charities are truly charitable. Nevertheless, the polemic around charities was not sparked by lack of ethics within institutionalised giving, it was sparked by human nature.

We have the tendency to talk about the bad and disregard the good. Centralization of help prevents maximal distribution of funds, but it also helped increase it. People can give more when they have more.

Help is now offered on a greater scale than it was back in the 17th century. One could argue that philanthropy was even more inefficient and random in the past than it is now, it’s just that we lack the records to prove it. The nostalgic way we view the past, thinking that people were better is wrong. Perhaps they were more altruistic and had no personal interest in offering help. HOwever, when there’s more interest to give, there’s more giving. We have to adapt to the way society works in the 21st century.

Going back to my question, as to what extent are British charities serving their purpose in the 21st century, I would argue that they are serving it fully. Maybe they’re not serving the 17th century’s purpose, but one must consider how the social, political and economic spectrums have changed. Charities are not doing their best, but they’re doing more than they did before. Criticism won’t make us help society, but being informed will. Choosing intelligently can maximize your efforts, adn that is what I intend to do in order to serve my personal charitable purpose.”You must not lose faith in humanity.

Humanity is an ocean; if a few drops of the ocean are dirty, the ocean does not become dirty.”? Mahatma Gandhi


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