[Closed] Comic relief invests in arms and tobacco..

Seems a bit 'trying too hard to make a story' to me if their "investing in arms" equates to investing a couple of hundred grand of their billions into BAE Systems.

Agree with Cougar. Read the story and thought... oh.

I do like the way you've sensationalised it with your thread title though.

Can't see a problem with this myself. Looks like a shrewd investment. I'm in. 😉

I dunno, it seem a bit like its turned into a cash cow without thought to the aims and principles that it's about.
Helping people and children in war zones while investing in arms company's is a bit rich IMO..
And [i]only a couple of hundred grand[/i] is couple of hundred grand that people have donated to help others not to invest in arms.
And the thread title is taken from the BBC...

I applaud the BBC for bringing this out, especially since the 2 organistions are so closely linked. It's seems they're finally learning about proper journalism and unbiased reporting after the savile scandal. A ways to go yet but a step on the right road.

And they seem to think its ok

the charity uses a number of[b] managed funds[/b] which invests that money on the charity's behalf, including in the stock market.

my money's on "not aware"

I applaud the BBC for bringing this out, especially since the 2 organistions are so closely linked. It's seems they're finally learning about proper journalism and unbiased reporting after the savile scandal. A ways to go yet but a step on the right road.

Utter balls, more like a journalist trying to create a sensational story when there is none.

I do see a problem with it, holding equity in companies that put their profit above the health of the consumers that use their products is not ethical. People give to charity assuming the beneficiaries will be the people that motivated them to donate not corporates that may then go on to sell them addicitive drugs/their governments the weapons do them harm. Pretty straightforward really:

Give money to cause =+1 social benefit
Invest money in ethical business =+1 social benefit
Invest money in non-ethical business =-1 social benefit

'Do the math'(s)

[i]And the thread title is taken from the BBC[/i]

Minus a crucial word?

the charity uses a number of managed funds which invests that money on the charity's behalf, including in the stock market.

my money's on "not aware"

Yeah, I thought that too.

'not aware of where the money is going' is not a phrase that should be in a charity's vocab. If you're claiming that 'every single penny is going to those who need it' then you need to be aware of where every single penny is going. Also, why are they investing money and not using it to purchase goods and services for those that need it?

Give money to cause =+1 social benefit
Invest money in ethical business =+1 social benefit
Invest money in non-ethical business =-1 social benefit

'Do the math'(s)

1+1-1=1 still better than 0

Managed funds, so someone at Comic Relief didn't go off any buy some cluster bombs to keep in a cupboard - they gave their cash to a fund and said "try and make us some more money with this". They probably should have added "without doing anything too embarrassing", but as said by others its a a bit of a non-story.

Something similar was reported about Newcastle?? council last week, with a separate entity running their pension investing a few thousand quid out of the several billion that they manage in Wonga.

I'm surprised you think it's ok, keep chucking your money in then, it'll keep it on the telly for years to come..

'Chewie, take the profesor in the back and plug him in to the hyperdrive'

Pretty sensational headline IMO.

If the BBC article is correct, then seems to be a failure on the part of the trustees to ensure that money is invested in line with aims and principles. Investing in managed funds can and does involve these kind of issues which is why trustees are appointed. More fool them putting money into managers funds instead of indexing them as well, but that's a different story.

Still there is quite a stretch to what is happening and the headline even if the latter may be factually correct.

[i]'not aware of where the money is going' is not a phrase that should be in a charity's vocab.[/i]

this.

saying 'Oh, it's all done at arms length' isn't an option.

*everything* they do should help support their stated aims and ethos.

Minus a crucial word?

[quote=khani said]I'm surprised you think it's ok

Whilst I don't think it's hugely OK, I also thing that it's very very difficult to keep track of every pound out of the millions they get/invest etc.

Like someone else said, it's not like they're going to an arms dealer and buying a job lot of bullets and land mines, it's a managed fund, and it's arguably the fault of the firm doing the managing, which I very much doubt is anyone inside the Comic Relife charity.

they gave their cash to a fund and said "try and make us some more money with this"

Is it right that a charity can gamble with donations like this in the first place - I think this is the elephant in the room.

Am I naive to think that when I donate my £1 for a red nose, that money is used to help someone in need and not passed to an investment manager to gamble on stocks and shares?

dan1980 - Member 
I also thing that it's very very difficult to keep track of every pound out of the millions they get/invest etc.

I am not sure I agree dan, that is the whole purpose of having trustees. Maybe Ballantyne was "out" at the time.

Am I naive to think that when I donate my £5 that money is used to help someone in need and not passed to an investment manager to gamble on stocks and shares?

Errr...invest in an ethical fund*? Hardly bleedin rocket science is it

*Yes this may give you a lower return but you should factor in the additional damage done by supporting exploitative organisations to the stated aims of your organisation. That may not be a pounds and pence value but would include reputation and long term sustainability

Apparently so..

Damn it. now I've got more reason to be cynical. I tell thee - I'm gonna be Victor Meldrew before I'm 35 at this rate!

So if arms manufacturers lob a few K of their billions of hard earned profit to the war affected does that suddenly make them ethical? Likewise for tabacco companies and cancer sufferers. One thing affects another.

Still there is quite a stretch to what is happening and the headline even if the latter may be factually correct.

Surely it's impossible for them to go and spend every penny donated all at once. They don't have the telethon and then go shopping the next day with £60 million in cash.

So since they have all this cash waiting to spend it makes sense the try to make a return on that capital before it's spent on stuff.

Whether they should simply maximise their return on investment or try to restrict the funds they invest in to fluffy benign things is then an ethical debate but the fact they have funds to invest is just common sense.

Am I naive to think that when I donate my £1 for a red nose, that money is used to help someone in need and not passed to an investment manager to gamble on stocks and shares?

My understanding ( from a quick listen to the news this morning ) is that investing the money is _exactly_ what allows Comic Relief to pay out every penny that it receives - the costs of the running the charity are taken from the profits made by the investments.

DONK, charities (should) appoint trustees to ensure that investments meet certain guidelines. It seems in this case that this may not have happened, but we need to see the details. However, there is a stretch IMO between investing in managed funds that invest in a diversified portfolio of companies (correctly) and "implying" that CR directly invested in arms and tobacco companies.

Is there an algorithm (or even a simple equation or sum) that can tell us definitively whether using unethical money for good causes, offsets the harm that the dodgy company will inevitably cause..?

(please bear in mind that I had trouble working out the ages of my sons classmates based on the September intake etc so I'm no mathematician.. a yes or no answer will suffice 8) )

Am I naive to think that when I donate my £1 for a red nose, that money is used to help someone in need and not passed to an investment manager to gamble on stocks and shares?

Pretty naive, yes - after all, the money you donate to any charity will go into a bank account paying a certain amount of interest - where do you think this interest comes from? Some of it comes from mortgages and the like, but not all. And that's the simplest case: for a large charity with large sums of money it would be unethical for them not to invest it - after all, that investment generates more money for "doing good".

I don't know how anyone can say this does not matter.

If I give money to a charity that purports to care for people, especially children, I do not expect that money to be used to develop bombs to blow up children and their parents, nor do I want it spent on supporting alchol and tobacco industries - who are more than happy to exploit youth drinking and worse the enticement of children in the 3rd world into a (short) life time of smoking. Its not like there are a lack of other industries around the world to invest in.

Its deeply immoral and I will never give to this charity again, much as I cease giving to any charity I see exploiting the vulnerable and not very bright by 'chugging' in the street.

I don't know whats happened to so many charities - so many seem motivated by profit, perks and salaries and have lost all sight of their supposed purpose. I guess thats why politicians/MPs seem to be moving into 'managing' them - same big talk to the public but with a total lack of morals and lots of pay.

My understanding ( from a quick listen to the news this morning ) is that investing the money is _exactly_ what allows Comic Relief to pay out every penny that it receives

But if the money is being invested, shirley that money is at risk of being lost - there's no such thing as a sure thing in investments, especially ones as contentious as BAE systems.

@ Yunki - No, you can't buy absolution, if you've ****ed somebody over theyre still ****ed even if you help someone else

but you can buy damnation ie if you do aload of good and **** somebody over then guess what? They're still ****ed

Many years ago, before the term "ethical investing" was widespread, I was the trustee of a charity which would be equally outrageous to be investing in arms or tobacco firms etc. We had a policy which meant that direct investments were scrutinised for suitability, that is we would not hold shares directly in an arms company or a tobacco firm. IIRC we did hold shares in drinks companies, and Nestle (who at the time were a bit controversial for their baby milk policies in the developing world) - which generated some discussion within the trustees. The conclusion was if we looked hard enough there would always be something that could be criticised in any investment choice.

We did invest through a number of funds as well, and there was no scrutiny at trustee level on the composition of the funds, so it is likely that indirectly we held arms and tobacco shares. This was also discussed but it just wasn't considered practical to withdraw funds any time the fund manager decided to make an individual investment we didn't approve of (this was before the internet was widespread, and realistically to manage the investments with that level of scrutiny would have required additional full time staff). There was an overarching responsibility to make sure that the investments were also profitable. Whilst there are now ethical funds, even they may not be as rigorous as some would like in investment selection or may return less money.

Investments we once might have seen as 'clean' are now tainted. Financial services have had their issues! Chemicals or oil carry a stigma of environmental pollution. Telecoms, coffee bars, on-line book sellers etc all avoiding UK tax opens up another angle of ethical concern.

Finally its likely that any successful investment itself holds cash which it invests potentially not following your own ethical principles.

yunki - Member 
Is there an algorithm (or even a simple equation or sum) that can tell us definitively whether using unethical money for good causes, offsets the harm that the dodgy company will inevitably cause..?

Yes, the Bentham Algorithm (aka consequentialism)

for those that have said "they're not aware, it's not a story" any self-respecting fund manager - part. if it's for a charity - would have asked them to fill in some kind of Q&A sheet on ethical stuff.

So it doesn't wash IMO - they've been caught out being lazy, they could, and should, have thought about it. Sure it's not much in factional terms, but even for managed funds they really shouldn't be in there at all, plenty of other ways to invest ethically.

kcal - Member 
plenty of other ways to invest ethically.

Actually as poly (I think) noted, when you dig down there are actually very few.

Arent we all investing in the arms industry in the state subsidies of BAE

the entire arms trade couldnt be more hypocritical, see Jets to saudi cover up and continued arms sales to most of the repressive middle eastern dictatorships, all fully endorsed and promoted by the Prime Minister.

and comic relief should know much better

Fair point, but they'd have at least avoided the headline stuff - arms companies FFS. Someone's just been pretty lazy really.

Yes, the Bentham Algorithm (aka consequentialism)

Philosophically interesting but requires all the harm and benefit to known inadvance to perform the 'calculation' so effectively useless

Up there with Ayn Rands philosophy of rational self interest and the Laffer Curve.

OK so maybe being a bit short there but you do have to take a risk with investments on both financial and ethical grounds. The thing is in my view charities that promote the geberal and wide ranging kind of stuff that comic relief does need to stack that risk away from 'non-ethical' business, where that line lies is a judgement call but tabacco and weapons, for me, are clearly on the wrong side of it. So called 'ethical' business will act outside your original brief but that may be out of you sphere of influence and anciallry to their main purpose.

But if the money is being invested, shirley that money is at risk of being lost - there's no such thing as a sure thing in investments, especially ones as contentious as BAE systems.

Yes that's precisely why you need to invest in a range of funds and a range of company types to mitigate that risk. If you pick one sector you think is quite clean, or focus one one fund type your portfolio becomes unbalanced which makes people twitchy.

The lowest risk investments might be things like government bonds, but are we sure that governments are ethical?

@Poly - sounds like a justification for apathy to me. Not that it's necessarily CRs fight to turn capitalism to the path of righteousness but I think the public handing over the stake would expect it to be not to be bet on the 'the baddies'.

So what is your point OP?

That we should stop donating to any charity that invests/saves a tiny fraction of its money in a way that you as an individual disagree with? And that will help who?

thestabiliser - Member 
@Poly - sounds like a justification for apathy to me.

Or realism based on experience as a trustee?

I agree that even the risk-free (sic) rate or a money market deposits is unlikely to be 100% ethical but practicalities have to take over (and be managed transparently) at some stage when holding cash IMO (and no I am not a Utilitarian!!!)

So what is your point OP?

That we should stop donating to any charity that invests/saves a tiny fraction of its money in a way that you as an individual disagree with? And that will help who?

Well.. Yes, it stinks to high heaven IMO, your donations should be used for the cause your donating to,
Maybe that's a little naive judging by some of the responses so far..
If I give a pound I expect a pound to be used for the intended purpose, not 90p and 10p to the devil..

Well.. Yes, it stinks to high heaven IMO, your donations should be used for the cause your donating to,
Maybe that's a little naive judging by some of the responses so far..
If I give a pound I expect a pound to be used for the intended purpose, not 90p and 10p to the devil..

Welcome to my world.

In reflection it is/was naive to think this judging by what I'm reading here.

If I give a pound I expect a pound to be used for the intended purpose, not 90p and 10p to the devil..

And there we have it.. 🙁

Right, final gambit before doing some actual work, Khani, Highclimber, you're not naive, that's how it should be......but charities, quite rightly-ish, appoint commercially aware individuals to their boards of trustees to manage the cash. You/I would think that those individuals would be briefed to invest that in benign (as far as can be reasonably established) organisations. They do maximise return for their charity however that may be at the cost of investing in businesses that may act contrary to the stated aims of the charity or the intent of the donators. This is an anathema and a consequence of monetising good will* as the markets are morally blind outside of legislative constraints*. Should we expect charities to have better scrutiny? In my view yes poportionate to the scae and resources of the organisation, local donkey sanctuary, not so much, CR, very much so.

*opinion

Ninja edit - what DONK said

Err if you have a pension you likely invest in tobacco and arms etc

If I give a pound I expect a pound to be used for the intended purpose, not 90p and 10p to the devil..

But what if it costs 10p to process that pound (be that fundraising overheads, transport costs, whatever). Where's that coming from? Would you rather 90p went to charity and 10p got lost in fees, or would you rather the 'devil' said "give me 10p now, I'll give you 20p back when you're ready to spend it"? Then every penny goes to charity, the people who need to be paid get paid, and the devil is 10p out of pocket.

Plus let's not forget, you're not actually giving it to the devil at all, you're giving it to someone who owns a devil's toenail. Ostensibly you're buying a bit of paper with "the devil" written on it, and selling it back for a profit later.

[quote=khani said]If I give a pound I expect a pound to be used for the intended purpose, not 90p and 10p to the devil..

Except that what you'll find actually happens is a pound to the devil who gives you 110p back to spend on the causes you wanted to benefit. Win, win.

Some people don't half seem to lack an understanding of the way finances work - and they work that way for charities as well. The charity would be failing in its duties if it wasn't investing the money to get the best returns - the only debate is over how rigorous it should be in making those investments. As mentioned, there is probably no such thing as a totally ethical investment, so it depends where you draw the line. For example would you think it OK to invest in a company supplying fuel systems to Rolls Royce for use on their engines (I was going to mention a specific company I once did some work for, but it seems that part is now effectively US owned, so this is a theoretical argument) - all those RR engines on Boeing and Airbus planes must be OK? Yet along with supplying stuff for RR Trent engines as fitted to airliners they also do stuff for the EJ200...

or would you rather the 'devil' said "give me 10p now, I'll give you 20p back when you're ready to spend it"? Then every penny goes to charity, the people who need to be paid get paid, and the devil is 10p out of pocket.

He would be a pretty smart devil and smarter than most CEOs and fund managers!!!

Cougar, aracer, the point is that the devil is not out of pocket though is he? He's used your pound to generate 2 given you a bit and kept the rest himself to fuel his endeavours.

Not forgetting the pound was donated on the promise it was being used for good causes in the first place..

Need to type faster

They could just hold cash and use it as and when.
When i give my 5 ,10or20 pounds i don't expect it to be used at the casino first to try and make more money ( if you do not think the stock market is a casino then you need to wake up and smell the coffee).
If charity's are struggling to find where the money needs to be spent with all the problems we have in the world then i can only assume those problems are not as great as we are lead to believe.

Who'd have thought half of STW were devil worshippers, every days a school day..

[quote=thestabiliser said]Cougar, aracer, the point is that the devil is not out of pocket though is he? He's used your pound to generate 2 given you a bit and kept the rest himself to fuel his endeavours.

Actually no, because the charity part owns the devil along with lots of other people who have pensions etc. The ultimate beneficiary of any money made isn't the devil.

As I say, there's a debate to be had over the rigour of choosing where and how to invest money. No worthwhile debate over whether they should be investing money in the first place.

Cobblers. The shareholders get a share of profits, the bulk of the money is used by the business to perpetuate itself.

[quote=66deg said]They could just hold cash and use it as and when.

They could, but I suspect the charities commission might not be best pleased about the management if the did that. They are expected to use the money in the best possible way, and sticking it under the mattress doesn't count.

When i give my 5 ,10or20 pounds i don't expect it to be used at the casino first to try and make more money ( if you do not think the stock market is a casino then you need to wake up and smell the coffee).

I think it's actually you with a caffeinated drink aroma problem. Over the short term you might lose money on the stock market, but with the long term managed investments big charities are making, the return is pretty much guaranteed to outperform other alternatives. Presumably you're thinking about the 2008 crash? Well if you'd invested your money into a balanced share portfolio just before that you'd be able to pretty much get all your money back now, along with a steady dividend income over the past 5 years which easily beats the returns available from a bank.

Do you reckon they should have their money in the bank earning 0.5% instead?

[quote=thestabiliser said]Cobblers. The shareholders get a share of profits, the bulk of the money is used by the business to perpetuate itself.

Yeah all those nasty salaries they're paying out to workers. Devils.

Do you reckon they should have their money in the bank earning 0.5% instead?

Even that 0.5% comes from investment, and you have no way of knowing where.

thestabiliser said » Cobblers. The shareholders get a share of profits, the bulk of the money is used by the business to perpetuate itself.

Yeah all those nasty salaries they're paying out to workers. Devils.

Yeah, from the proceeds of tobacco and arms sales, effin right.

the point is money donated in good faith to charity is being invested in company's who are in part causing the problems the the charity's are trying to eradicate..
It's not hard, wtf are they thinking..

I think you will find nothing in the stock market is guaranteed,in fact the most you can loose is 100% not likely but possible.
The point is that the charity is the middle man between the donor ,who has given money because they went to help which ever person , child or animal is suffering and any investment be it a fund or holding individual shares is at risk and must be held for a long time to see any benefit , not what the donor intended , meanwhile the person, child or animal dies, but hey you made a few quid.
It is a question of morals.

Bit of a sensationalist report of a naive mistake, I fear. Comic Relief has raised getting on for £1 billion, I defy any group or person to keep a full and morally coherent record of that some of money, with the charity commission breathing down your neck to maximise investment returns with minimal costs

As someone who works in the defense industry, I'd just like to thank you all for your continued generosity.

Legend

[quote=66deg said]I think you will find nothing in the stock market is guaranteed,in fact the most you can loose is 100% not likely but possible.
Nothing in life is guaranteed. Put it in the bank and the bank could go bust and you could lose all but £85k (I'm not sure if that even applies to non-individuals). You might argue that didn't happen when banks went bust as the government stepped in, but neither has anybody lost everything investing in a balanced stock market portfolio. You could of course stuff it under the mattress, but I don't think insurance will cover that.

You still appear to fail to understand that they're working on stuff long term and will always have money to invest - it's the best way for them to ensure they can carry out the work you want them to. If the morally correct thing to do is spend the money in the best way possible to help those in need, then they're doing the morally correct thing. It is pretty naive to think that you give them £10 and they instantly spend it on digging a well or building a hospital.

Yeah, it's not like anywhere needs any more wells or hospitals anyway..

Two things.

1:

But what if the devil used my 10p to make 50p and after he's given me 20p he's got 30p to do his devilish work all the more?

What if, indeed. So you decide not to donate, the devil is 30p worse off, and the charity is a whole pound worse off. Which is the greater evil here?

2:

The plural of "charity" is "charities." It is not, and never will be, "charity's." Stop it, all of you, you're making my eyeballs itch.

There's a few misunderstandings in this thread that would benefit from clearing up:

1) Trustees - they aren't there to "manage" things, they provide governance, set strategy and scrutinise other people's management (i.e. the managers). Running a charity is a full time job, trustees put in probably a dozen days per year. The trustees will make decisions like: setting the investment policy, including saying that we don't want to invest in this or that sector (based on the charitable objects etc.), we don't want any risky derivatives, or whatever. They may also appoint the fund managers. There will be finance people who's actual job it is to manage stuff, Duncan Ballantyne doesn't rock up to the office once a week to process the purchase ledger invoices and prepare the management accounts.

2) Fund managers - if a charity says to them - here's £xM to invest, and we don't want it in booze, fags or risky derivatives, then they need to follow those instructions. It's not hard, there are lots of products on the market, and lots of off-the-shelf products like index trackers that are designed for charities, including ones that avoid "dodgy" investments. Do you think comic relief is the only charity that wants to avoid booze, fags and arms when it invests? No, there's loads, and the industry is ready to meet that demand.

3) What counts as booze, fags and arms? This is where it can get a bit more difficult. We don't want to invest in people who make profits from booze and fags, right? Okay, well that's pretty much the whole retail sector ruled out as well as the manufacturers and distributors then. (Tesco sells fags, presumably at a profit..) Or what about companies who provide services to other businesses. Financial services - best avoid anyone who provides any of their services to anyone in the booze and fags industry (including, as we have already seen, the retailers). Do you even know who that is? Anyone know Tesco use for their insurance? Me neither, but since Tesco profits from fags, then whoever profits from Tesco by providing their insurances is also profiting from fags.... you see the problem?

4) Investing at all. Of course they bleeding well should. There's a variety of legitimate approaches to this that a charity can reasonably take, from out-and-out maximisation of financial returns, through to investment in things close to their mission that might not even generate a positive return, and a variety of flavours in between (or a mixture of different flavours).

What if, indeed. So you decide not to donate, the devil is 30p worse off, and the charity is a whole pound worse off. Which is the greater evil here?

People generally don't give to charity in the belief that the charity should maximize returns they do it to help others that are in need .
so if their need is not so great and they can wait for ten years for investments to come good then i can assume that the charity concerned is not in need of many donations.

There's other charities,

Sure. I'm certain it's only Comic Relief who have the audacity and moral bankruptcy to invest 0.3% of its proceeds into shares in tobacco companies, or 0.06% into shares in an aerospace company.

In seriousness I do take your point, and it seems to be an ill-conceived move on Comic Relief's part. But it whiffs of a "slow news day" story to me, it's certainly not the ZOMG COMIC RELEIF IS BUYING GUNS!!1! that the headline would have you believe.

People generally don't give to charity in the belief that the charity should maximize returns they do it to help others that are in need .

Perhaps not. But if that's the case then it's a failure on behalf of the people donating, not the charity.

Do you really think any charity could take your money, have the opportunity use it to raise [i]even more money[/i], and go "nah, we'll just spend it all immediately instead"? Moreover, do you think they [i]should?[/i] Which is the most responsible, effective use of donations?

0.3 and 0.6 of a billion is a lot of money, I see your point though, but now these things are coming to light it might change a few attitudes on how these things are managed.

The plural of "charity" is "charities." It is not, and never will be, "charity's." Stop it, all of you, you're making my eyeball[b]ie[/b]s itch.

FTFY