A bad joke: British charities under scrutiny

Comic Relief holds Red Nose Day, which involves wearing plastic or foam red noses in exchange for money to raise funds. The British charity faces backlash for investing in alcohol, tobacco and arms firms. Photo by: Phil Thomas / CC BY-NC-ND

A media report has put into question two British charities’ investment and campaign strategies — and is expected to raise a bigger issue over NGO activities.

In its report on Tuesday, the BBC revealed that Comic Relief, a U.K. charity providing grants to NGOs, had invested millions of pounds in managed funds held by alcohol, arms and tobacco firms such as weapons manufacturer BAE Systems and alcoholic beverages producer Diageo, respectively. The network also alleged Save the Children toned down or shoot down campaign ideas on rising energy prices in fear of jeopardizing its partnerships with British Gas and French energy giant EDF.

Almost immediately after the report was aired, both charities have been severely criticized.

Comic Relief — which supports initiatives related to health and projects that help provide livelihoods to people in conflict-afflicted countries — argued its actions were in in line with the U.K. Charity Commission’s guidelines, which calls on charities to invest money in those that would provide “the best possible financial return” and “only adopt an ethical investment approach with specific justification and not on the grounds of individual moral views.”

“This sounds counterintuitive, but it is the law. The broader the issues a charity supports the more difficult it is to justify ethically screened investment – as the range of industries that might need to be excluded would seriously impact on the fundamental requirement to maximise returns,” former Comic Relief chair Peter Bennett-Jones argued in a statement, adding that every pound raised by the charity went to charitable causes, and only those generated through investment returns or sponsorships are used for running costs, for instance salary of staff members.

“We choose not to take chances with the public’s money in overly risky investments and we choose not to stick it under our mattress where it would generate no income and be eaten away by inflation. An independent analysis shows that our approach has delivered strong returns at a lower risk than any other charity assessed.”

Save the Children, meanwhile, is questioned over its commitment to independence from its partnerships with private firms, which CEO Justine Forsyth has denied.

“We would never decide not to campaign on something because of a corporate partnership. And we’re quite explicit when we go into these corporate partnerships that we won’t muzzle our voice,” said Forsyth.

The investigations underscored once again the importance of aid transparency, as was the case when the BBC also unveiled issues of hidden corruption allegations among Global Fund contractors. But while that controversy seems to have not shaken donors’ support for the funding organization, the latest report threatens future private contributions to Comic Relief — and perhaps other British charities — with the public expected to be more exacting and cautious with their donations.

This is sure to concern U.K. NGOs, particularly organizations that get a significant portion of their budgets from private donations, as opposed to grants from the Department for International Development.

The report also questioned NGO-private sector partnerships, at a time when aid organizations are opening up and engaging more with companies in their poverty-eradication activities. In a recent interview, the international director of Danish NGO DanChurchAid told Devex that while there is clear value in partnering with the private sector, aid groups still has a watchdog role to fill.

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About the author

  • Ravelo jennylei

    Jenny Lei Ravelo

    Jenny Lei Ravelo is a Devex Senior Reporter based in Manila. She covers global health, with a particular focus on the World Health Organization, and other development and humanitarian aid trends in Asia Pacific. Prior to Devex, she wrote for ABS-CBN, one of the largest broadcasting networks in the Philippines, and was a copy editor for various international scientific journals. She received her journalism degree from the University of Santo Tomas.