We have moved

As the Intelligent Giving website is now fully up and running we have created our own blog so our findings and comments will be posted there from now on.

The address is: http://www.intelligentgiving.blogspot.com

We look forward to seeing you there.

Ta-dah!

Thanks for keeping up with us.

The site is live. I hope it meets expectations!

http://www.intelligentgiving.com

Dave

Hello world (nearly)

Four days to go... and we decided it was time to show the charity world what we have been doing for the past year.

Yesterday we emailed the 332 charities we have profiled so far, asking them to look at their entries and let us know what they think. Their replies - good or bad - will be displayed on the site.

The 22 responses received so far have been encouragingly positive, many congratulatory. We were expecting a barrage of angry emails from fundraisers convinced we are out to get them, but it hasn't happened.

Barring one addled response from someone who seems incapable of navigating the site, people seem to have grasped that the purpose of Intelligent Giving is positive, and that we are not some evil force intent on destroying the charity world.

November 3rd is the official launch date but you'll be able to see the site on the 1st. We can't wait...

Neill

The Donkey Sanctuary

In our quest to unearth the truth about how charities work, we’ve been tracking down rumours doing the rounds. And one of the most enduring of these is about The Donkey Sanctuary.

The Donkey Sanctuary is big: it spent over £13m last year. It looks after a lot of donkeys in Britain, and has ambitious plans for expansion overseas. First impressions are, it is well-run.

But closer inspection reveals that - as the rumours insist - it's sitting on a massive pot of money. When we opened up the Sanctuary’s annual report we discovered that they had over £38m (no, really) in the bank.

This might not have worried us if it they had concrete ideas of how this money was going to be spent – but apparently they didn’t (ie it wasn't designated for a particular purpose). As far as we knew, they were saving up for a donkey health spa, or an extra-large donkey Christmas party. They could spend this money any way they liked, and, as potential donors, that worried us.

So we went to a quiet place and took another look at the report. After some head-scratching, we discovered that they were, inexplicably, counting everything they owned as part of the cash they had to spend. If this sounds strange, you’d be right: it’s like protesting to your bank that they weren’t counting the value of your house in the balance of your current account.

What was the Sanctuary playing at? We rang their finance director, John Carroll, to find out.

Refreshingly, John admitted there was a problem with how they were doing things at the moment, and told us that next year’s annual report would be a lot clearer, even going so far as to tell us what they were going to spend on specific projects.

This is great news. So the Donkey Sanctuary is not a fat-cat charity, after your money to enrich itself. Rumour quashed.

Adam

Status report

We've been very busy, hence the silence for the last month. We look set to hit our deadline of 1 November. We currently have a three-quarter-built site, which we are user-testing, with the following attributes:

• Over 1150 pages
• 967 charity profiles uploaded
• 267 detailed charity profiles uploaded
• 27 original articles received/written; 12 uploaded
• Searchable listing of 100+ experts' recommendations in place
• Searchable listing of over 100+ award-winners in place
• Searchable listings of volunteering sites, challenge event sites and"where to give stuff away" charities in place
• Charity search & filter functionality working
• Personalisation module working
• Comment module working
• Discussion board working
• Consistent design applied across 90% of pages

Why annual reports?

People ask us why we put so much stress on annual reports rather than web sites, since the latter are written for the public. The answer is simple:

Websites are not useful tools to compare charities. Each is very different, created for different purposes (some to help beneficiaries rather than to inform donors, for example), there's no statutory guidance on what should be in them or what they are for, and they can cost a lot of money to build and maintain. So if we compared by website we'd penalise charities that don't understand, or can't afford to create, or don't need, a research-friendly web site.

The annual report meanwhile is the legal document that all charities ought to know how to write. It's the only document they have to produce by law and the only one which has comprehensive guidance on what it should contain. It has certain types of information that no other kind of publication will carry. For example, the top salary, who the trustees are, the risks facing the charity - generally information that organisations don't willingly disclose. It's the only place where the nuts and bolts of the organisation should be described.

It has been suggested that we also look at charities' Annual Reviews. Well, we do, where they exist and when they are referred to in the annual report. But very few charities actually produce them and, again, there's no guidance on what they should contain.

Do tell us if we're repeating ourselves.

Dave

The contents of our charity review pages

The review page template is still being designed but these are the elements we are planning for it:

The page will be headed by the charity name, eg "FARM-Africa"

There will be a headline, eg "FAIR HARVEST FROM AGRICULTURE PROS"

Then a paragraph eg:
"A crew with big ideas, working with everyone from community groups to the World Bank to help African farmers manage their land more efficiently. A well-rounded annual report suggests it's in a strong position all round, with money in the bank and plans for the future, although the report could benefit from more detail of activities."

Then some figures and relevant smiley graphics (yes) to indicate:

• The quality of the reporting (pivoting on the quality of the annual report) (%)
• The number of months of expenditure in reserves (# months)
• Whether or not there is an ethical investment policy (Yes/No/No investments)
• The organisation's highest salary (no smiley used here)

Each of these entries will have a link called what is this? leading to an explanation.

A lower-profile section called "Misleading figures" will contain (no smileys):

• Administration costs (%)
• Fundraising costs (%)
• Charitable expenditure (%)

Each of these entries will have a link called Why misleading? linking to an explanation.

Then the heading, "If you like this charity, you might like these" followed by five similar charities.

Then a section called "The charity replies" where the charity can write 50 words of its choice.

And finally a link to the annual report, to the GuideStar entry, to the charity's website and to the charity's donations page (on its own website).

Behind this page there will be two more tabs with more financial details and more ways to help (volunteering and challenge events, as provided by the charity).

Responses welcome via the comments option...

Which is the real pink charity?

The Breast Cancer Research Trust says it is "the only Charity specifically promoting research into breast cancer".

Breast Cancer Campaign says it is "the only charity that specialises in funding independent breast cancer research throughout the UK".

Meanwhile the huge Breakthrough Breast Cancer clearly does a spot of specialist breast cancer funding itself, and The Genesis Appeal does the same. And there are doubtless others.

What we could use is an organisation that presents all these charities side by side so people can compare for themselves. Oh hang on, that's what we're doing...

Dave

The opinions carousel

• Big charities are lumbering and wasteful, big charities are professional policy-changers
• The contract culture means charities are torn away from their strengths, the contract culture means charities can grow and influence policy
• Three-year grants distract charities from their work, three-year grants keep charities on their toes
• Chuggers are a cost-effective way of attracting donors, chuggers give the sector a bad name
• And so on

I've worked in a variety of businesses (publishing, new media, business consultancy) and I've never known such a range of polarised opinion. Is it a reflection of the diversity of the charity sector. Or is there nor enough research? Or not enough debate?

Either way, it will all be on the web site in our "Experts Opinions" articles. Also each charity will be able to publish its own response to our review on its own review page. We're hoping the dialogue will be useful and lively.

Dave

The truth about non-charitable costs

A year ago we - like many donors - had preconceived ideas about which financial figures would help point to the effectiveness of a charity. In particular we were planning to rely on those old chestnuts: administration and fundraising. But the more research we conducted, the more we were convinced that they are almost meaningless.

The truth is that admin and fundraising costs are often plucked from thin air. Discussions with a wide range of charity workers indicate that - for all the guidance of SORP 2005 - both figures are guessed at, then reduced, and are therefore utterly misleading. One CEO said they could get away with presenting their fundraising costs as two per cent of total expenditure, when in reality they would be nearer 50 per cent.

If we presented these figures as a comparative option, we'd probably end up penalising honest charities. It's a sorry situation - and for the time being we'll respond by garlanding the admin figure with caveats and hiding the fundraising figure in the back of our reports.

Neill

The grass is always shorter...

One of our most important pieces of work is writing short overviews of each charitable sector so the public can get some context on their favourite charities. We are having these pieces checked by (some very accommodating) experts - and are finding some interesting things.

In sport, for example, there are Community Amateur Sports Clubs - organisations that encourage local participation by keeping fees low and providing facilities. They are not-for-profits but many avoid registering as charities as the Charity Commission can, allegedly, apply unwanted restrictions.

We were quoted the example of a cricket club being forced to allow the grass on its pitch to grow to a certain length so that members of the public could sit comfortably on it. Thereby providing sitting access for all - but cricket access for nobody.

Or is this just a non-charitable urban myth?

Neill

And now for something completely different

Fancy yourself as a circus enthusiast or daffodil connoisseur? Maybe you want to campaign for courtesy or send cows abroad. Whatever your passion (as long as it's legal), be assured there's a charity for you.

Flower-lovers have a choice between The National Association of Flower Arrangement Societies and The Daffodil Society. The cosmically-minded will find kindred spirits at The British Interplanetary Society. A predilection for puppets or a bent for balloons? Then join the ruck at the Norwich Puppet Theatre Trust or British Balloon Museum.

We pondered the question of how to categorise charities for months, and we kept finding charities that don't fit neatly into our major sections ( 'Children', 'Education', 'Human Rights' and so on). Not wanting to ignore the diversity out there, we created a 'Curiosities' section for organisations whose aims are out of the ordinary. Examples above.

We hope that donors who aren't sure who to support will find something there that tickles their fancy. And that we get a smile out of everyone else.

Anita

Sensitive CEO salaries

We have reviewed 500 charities and have decided to stop - for the time being - to check that our financial figures are correct. We have taken the diligent but difficult next step of asking each of the 500 charities to check we've got them right.

We are having many positive responses but one contentious issue keeps raising its head: the Chief Exec's salary.

For charities whose CEOs earn over £50,000 there have been no issues since those salaries are disclosed in the Annual Report in bands (e.g. £50,000 to £60,000). But for CEOs who earn less, we are getting a few indignant responses. This is because the majority of Annual Reports simply state, "No employee earns more than £50,000". Without an exact figure, all we can do is state that the CEO salary is below £50,000. But we are requesting the actual figure. And this is ruffling feathers.

Donors would doubtless like to know what the CEOs' salaries are, especially as they are paying towards them. But we've had several alarmed responses from the charities, saying that this is private information and... how dare we?

In phone conversations it quickly becomes clear that many of these charities don't realise that their accounts are already in the public domain on Guidestar and the Charity Commission Register. We are just presenting them in a way that is more accessible to the public.

As for the CEO salaries, we, as donors, want to know them and we can't easily understand why a handful of charities won't disclose them. Do they have something to hide?

For the record the CEO of Intelligent Giving gets £33,000 and he doesn't care who knows (he says).

Neill

Unrestricted fun

We have recently found that a number of the smaller religious charities have really quite large unrestricted funds (the money that the charity has and is free to spend), relative to their expenditure for the year. This has been quite puzzling: it seemed at first that they were simply hording their money or saving for a rainy day. Raining frogs, perhaps.

However, on closer inspection it appears that some of them have included in their ‘unrestricted funds’ the value of their buildings. The theory being, presumably, that if it came to it they could sell their buildings and use the cash to continue their good works.

There is a certain logic to this. However, other charities do not include their buildings’ value in this, presumably feeling that these are integral to their work and/or that it is not easy to get their hands on the money tied up in them.

I do not know which method of accounting is more useful for donors. However, it is just this sort of variation that makes comparing charities by their figures alone difficult, and this highlights the need for charities to be absolutely clear about where they get their figures, and what they refer to.

Adam