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

My belief is that charities should not be trying to behave like corporations constantly striving to maximize the bottom line , the impression given by charities is that the money is needed now ,Geldoff thumping the table springs to mind .
If it is going to be spent anywhere in the short to medium term then stocks and funds are not very wise.If it is to be kept for the long term then the worlds problems are not that great or can simply wait.
I also get the impression that the problems in Africa for example have been ongoing for decades surely the charities know where money need's to be spent after all they have been doing it for a very long time.

[quote=khani said]There's other charities,

There are

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

No, no, no - you've got it all wrong. When they get 66deg's tenner they should nip down the market and buy whatever they can get for it straight away. Better that than risk being morally bankrupt.

[quote=66deg said]My belief is that charities should not be trying to behave like corporations constantly striving to maximize the bottom line

Oh, so you'd rather they wasted your donations?

the charity's know where money need's to be spent

Your doing it on porpoise now are'nt you?

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

Just because you have money and opportunity does not mean that any investment will go up .
Before anyone gets on their high horse i know this is an extreme example but decades of donations and billions of charities cash was lost by one Bernie Madhoff.

 

If you've got a surplus of apostrophes it would be better to invest them, rather than splurging them in a single post.

My belief is that charities should not be trying to behave like corporations constantly striving to maximize the bottom line

Charities do behave much more corporately these days, and will strive to maximise the value of the funds they have available (like a business would). I fail to see how this can be a bad thing.

If it is going to be spent anywhere in the short to medium term then stocks and funds are not very wise.

In reality they will probably have a mixture of different types of investment, suitable for both short and long term cashflow requirements. You can assume that professional advice will be involved in those decisions.

I also get the impression that the problems in Africa for example have been ongoing for decades surely the charity's know where money need's to be spent after all they have been doing it for a very long time.

I think you will find that problems don't behave like that - if they were static and constant it would be a lot easier though. However, they (charities) will have a fair idea what would be a useful way to deploy resources, and when they plan that, and identify that some of the required funding doesn't need to be released for a while yet, what would be the best thing for them to do with that money in the meantime?

In reality they will probably have a mixture of different types of investment, suitable for both short and long term cashflow requirements. You can assume that professional advice will be involved in those decisions.

I am not against low risk short term sensible investing while money is waiting to be deployed , and professional advice should be taken ,my personal belief is that shares on their own or in share only funds are high risk and the FSA disclaimer is their for a very good reason.

Any fund manager will tell you that when buying shares the strategy is long term buy and hold. In order to get a return you must be prepared to be in it for the long term , money that may need to be released in the short to medium could have lost a fair whack in the stock market.
I would have thought that the needs of recipients would be on a short to medium term basis not in ten years time.

 

Donation=> charity=> funds management=> dodgy investments=> Interest earned => charity funds increase=> [u]research to more save lives[/u] => many lives saved=> fat pay cheques => executives and jobworths.

Dodgy investments=> create misery=> [u]more lives terminated[/u]=> fat pay cheques=> executives and jobworths.

Research to save more lives = more lives terminated = square one.

No donation=> no more increase in lives save = no increase in lives terminated due to dodgy investment = square one.

[b]The winner = executives and jobworths. i.e. bureaucrats.[/b]

🙄

My belief is that charities should not be trying to behave like corporations constantly striving to maximize the bottom line

I'm guessing You aren't responsible for running a charity.

Which is a good thing

because maximising the potential of the donations seems pretty important.

66deg - Member

I would have thought that the needs of recipients would be on a short to medium term basis not in ten years time.

But the charities will be holding funds regardless. It doesn't have to be the same money- let's imagine they receive £10 of donations, and decide to spend it on a 5 year project that costs £2 per year. Now they only have £8 to invest, on a longest scale of 4 years. In isolation, simple.

But next year, they get another £10 donation. And next year, another. So they will have an ongoing base of committed funds which, even though they're from multiple sources and committed on varying timescales, gives them a relatively consistent purse. Money they invested years ago can be used to fund commitments they made last year, and so on.

Northwind, stop being logical and actually knowing how things work.

Be outraged !!!1!

nealglover - Member

I'm guessing You aren't responsible for running a charity.

I know who but hang on ... they are the executives and jobworths. i.e. bureaucrats. 🙄

@66deg

What I think you are missing is that equities are a good investment as PART of an investment strategy, and, yes, should not be for short term positions. It would be stupid, and irresponsible for comic relief to put every penny they've got on the stock market, but that's not what they are doing, and nor is any other charity.

@chewkw

I'm guessing that, if you think the executives get "fat pay cheques" that you don't work in the charity sector? In pretty much every function, salaries are lower than could be achieved in a similar role in the commercial sector. If your aim is to get rich, don't go and work for a charity.

legend x2 - keep it coming fellas

So, what other charities invest in explosives and warships?

[quote=66deg said]money that may need to be released in the short to medium could have lost a fair whack in the stock market.

It could have, but if you keep investing money in the stock market for the short to medium term lots and lots of times (which is what the charities could do if they're simply buffering cash flow) then some you'll lose, some you'll win but overall you'll do a lot better than putting the money anywhere else.

I'm really not sure why you think you know better than the professional investment managers they doubtless employ.

edit: actually Northwind explained it much better than me, but I'll leave my words of wisdom for you to enjoy anyway

I'm guessing You aren't responsible for running a charity.

Which is a good thing

because maximising the potential of the donations seems pretty important.

No not what i'm saying at all some types of investment carry much greater risk than others , so therefore donated money should be in low risk investments not high risk . When you rely on the good will of people who have faith in what you are doing it seems the sensible thing to do.

The great scandal of Comic Relief is that nothing it has ever produced is even remotely funny, and the whole 'red nose' thing is just embarrassing to even think about.

Oh, and Jonathan Ross has had some association with it at some point.

edlong - Member

@chewkw

I'm guessing that, if you think the executives get "fat pay cheques" that you don't work in the charity sector? In pretty much every function, salaries are lower than could be achieved in a similar role in the commercial sector. If your aim is to get rich, don't go and work for a charity.

They get paid to work for charity? I thought the charity organisations only get volunteers?

Hhhhhmmm ... they are slowly turning into a "public" sector ...

maximising the potential of the donations seems pretty important.

Yes, but it's no good if you make things worse for the charity's intended recipients - it defies the whole purpose of the charity.

Whats the point in having lots of bandages to patch up children who have been shot by the guns you helped to finance????????

[quote=66deg said]No not what i'm saying at all some types of investment carry much greater risk than others , so therefore donated money should be in low risk investments not high risk .

Indeed - I'd hope they haven't got more than £85k invested in any one bank.

The question though is why investments should be particularly low risk when higher risk investments get much better returns (I'd also note that in the investment world investing in a balanced portfolio of UK blue chip shares isn't actually seen as particularly high risk).

..then you are extremely ignorant. Do you honestly think something of the scale of comic relief (or something on a much smaller scale) can be effectively managed in people's spare time?

[quote=natrix said]Whats the point in having lots of bandages to patch up children who have been shot by the guns you helped to finance????????

Which guns are those?

No not what i'm saying at all some types of investment carry much greater risk than others, so therefore donated money should be in low risk investments not high risk

I'm willing to bet, if you ask someone who has a clue what they're doing, "what's the correct balance of risk to maximise returns?" they won't say "stick it all on low risk investments, mate"

Indeed - I'd hope they haven't got more than £85k invested in any one bank.

That certainly features in the investment policy of the charity I work for (in reality, "to minimise" since otherwise even the monthly payroll would have to be spread around several banks)

The question though is why investments should be particularly low risk when higher risk investments get much better returns (I'd also note that in the investment world investing in a balanced portfolio of UK blue chip shares isn't actually seen as particularly high risk).

That's how investment decisions work, balancing risk and reward. If it's your own money, then fine, stick it all in some far eastern growth fund with high risk and potentially high reward. When it's someone else's money (think about what "trustee" means) it's not surprising that people take a more prudent approach.

I thought the charity organisations only get volunteers?

Naive, at best.

Even very small charities will need full time staff.

Positions in charities are never that well paid, but you know, you did want that money to be used to do good things. Its just that sometimes, doing good things might involve paying someone to do something.

I'm willing to bet, if you ask someone who has a clue what they're doing, "what's the correct balance of risk to maximise returns?" they won't say "stick it all on low risk investments, mate"

Wrong question - the prudent charity trustee isn't going to be just looking to maximise returns, they will be looking to maximise returns while managing risk to an acceptable level. They know that they COULD get higher returns by taking more risks, but accept lower returns as the price for lower risk.

I don't think anybody is suggesting sticking all the money in some far eastern growth fund. I have one of those which did brilliantly, then awfully - but it's a very small part of my investments. The point is that investing in the UK stock market with a balanced portfolio isn't actually high enough risk to be an issue - as I pointed out earlier, even if you put all your money in an index tracker at the peak before the crash you'd still be ahead of putting the same money in a bank over the same period.

But then I think we largely agree on this and just quibbling over semantics. I think the only confusion here is the difference between what we consider low risk investments (I'd suggest that includes major UK stocks) and what 66deg et al do.

Yep, sounds like we're on the same page!

The question though is why investments should be particularly low risk when higher risk investments get much better returns

I assume that Panorama (and others) went to the CR website to understand the investment policy etc. Including why they invest in the way they do:

Comic Relief has formal policies relating to its investments, its reserves and its grant making which govern the way we operate our core business.

A good start

We are committed to allocating all the money raised during Red Nose Day before the next Red Nose Day two years later. And we take the same approach with Sport Relief. But the money isn’t paid out all at once because some of the grants we give last for a long time – up to six years – and we need to make sure the money is being spent as we agreed.  That’s why we phase the payments and ask the organisations to report on what they’re doing with the money before the next payment is made.

And while we're waiting to pay all those charities and organisations their next installments we have a lot of money waiting to go out. We invest that money to try and make it into even more money. That’s why we have a team of the UK's best financial experts advising us how to invest that money wisely....

....We have other money to help run ourselves too – some is from corporate partners, some is from the Government and some is from other income sources.

And on the issue of ethical investments, as I said his is the responsibility of the trustees, so what do they say?

Our ethical approach:

Comic Relief’s approach to ethical investments is that we must deliver for the long term advantage of the people we are here to help. This means maximising the amount of money our investments generate at the lowest appropriate risk. This is the foundation stone of any charity investment policy, as required by law and Charity Commission regulation. We do not invest directly in any company. We do invest in blue chip managed funds in the same way as many other charities and pension funds.

[b]Trustees have been unable to invest in funds promoted as ethical at the same time as meeting their regulatory duty is to get the best returns at the lowest appropriate risk[/b]. This is because Comic Relief supports a broad range of issues, unlike most other charities which support single issues and because ethical funds have a relatively poorer performance than other managed funds.

So I come back to my original conclusion that this is more sensationalism that genuine news. CR policy seems clear and takes 1-2 minutes of searching on thei website.

Now what next can we get upset about?

Which guns are those?

When it says 'arms and tobacco' it doesn't mean artificial arms for paralympians, it means the sort of arms that blow your limbs off in the first place.........

Now what next can we get upset about?

The massive salaries that some charities pay their staff??

Amnesty International recently paid off two of their staff with a £1 million................

I was wondering when the salaries might come up!!!! Quaint thought that CR and other major charities could be run by volunteers.

Chief Exec £130k last year
5 other got between £90-100k
Total staff costs £13.5m
Total staff 286 (average)
Crude average £47k wage

All there in the open.

Yeah, see, on the kneejerk of it, I'm uncomfortable with highly paid charity leaders. But what if it works? Amnesty were one of the first charities I can remember who moved completely to professional fundraising, and there was a huge stink about it at at the time- I was a member and I remember thinking why is my donation going to this? But they made their case simply, "This way we get more successes, that's what the charity's for, therefore your scruples can bugger off as we're getting the job done"

If someone improves your take by £1000001, maybe it's worth paying them £1000000. Especially for these huge global charities, it's as much of a responsibility as running a global company. Maybe more so. Or... Maybe not. Because who really knows- perhaps you're basically taking money from another charity, rather than increasing charitable donations?

Chief Exec £130k last year
5 other got between £90-100k
Total staff costs £13m

[img] [/img]

Well khani at least you will be happy that the trustees do it for nothing!!

Love the portfolio (!!!) includes hedge funds, UK and global equities, property, private equity, commodities (not in 2012 though) etc. Bonds quite a small percentage, so not a low risk portfolio IMO!!!!

Okay, if you aren't going to pay people salaries to run these organisations, does someone have an alternative suggestion, given that they don't just run themselves?

Salaries yes, but imho £600K payoffs and similar salaries are excessive, it's the reason why I've cancelled my membership to Amnesty.

those MPs are starting to look quite good VFM!!!! 😉

It's all a big stinking crooked gravy train!!! No wonder sod all seems to change for the better..
I need to lie down..

Payoffs to staff are a bummer, granted. The reality can be that they represent the least bad choice, but still far from ideal.

A different tack on charity ethics and income - how do we think charities should react to offers of donations from the bad guys? I think it was the Royal British Legion who, after some consideration, declined a donation offered to them by the BNP. What should Comic Relief do if an arms manufacturer rings up and offers to donate some of their dosh to the cause?

Any opinions UNICEF sponsoring Barcelona.
Lets be fair if anyone needs more money it has to be football players.

Dunno, not sure if UNICEF is a "charity" as such though.

Could be wrong, but I thought Barca paid UNICEF not the other way round?

Just checked it appears they are now sharing space on shirts and UNICEF is done for free.

So to sum up:

- A lot of people on STW don't understand how listed shares work, and that you aren't subsidising the company or enabling them to do something they wouldn't otherwise be doing simply by holding their shares.
- A lot of people have no understanding of how large charities actually work, both in terms of financing and management.
- A lot of people think they can, in the space of 5 minutes reading a news report, determine strategic funding decisions that very senior finance people and trustees sweat over for weeks. Clearly they should be offering their services to Charities (free of charge of course).

I didn't think I had any particularly special skills that made me a good trustee. Perhaps I was wrong and bothering to understand how the organisation worked, and why it worked that way before blundering in to declare it wrong was unusual. That is not to suggest I never challenged a decision or upset the applecart but I did my best to be fully informed first.

Many apologies to anyone offended by any of the mistakes i have made whilst posting.
It is not one of my strong points but i am good at other things in life
so i try not to worry about it too much, i hope you understand.

It's all a big stinking crooked gravy train

Sorry Poly, but that doesn't sum anything up,
If you raise money on the promise of helping people then investing the money raised in arms and tobacco company's isn't ethical, regardless of how you dress it up..
Hiding behind the excuse of being [i]prudent[/i] doesn't wash.

Sorry Poly, but that doesn't sum anything up,

It summed it up perfectly for me as it happens.

Very well put poly.

Are you new here poly?!? 😉

Good points.

So khani, now that you have had a lie down and read a lot of informed comment, how would you change things? You have read the reason why CR does not invest purely in ethical funds? Would you challenge that reasoning? How would you propose getting £1 of donations directly into the hands of the needy without payed staff? Up to what scale would this be possible?

In short, you have dismissed the explanations for the status quo - fair enough - what exactly what would ou do instead and how would you do it?

Actually I do realise that payed staff are needed, I accept that investment is needed for the funds, but not in arms and tobacco company's just to eek out every last penny regardless of the ethics
Ethical investment isn't new or hard to do, so no investment in arms or tobacco company's that cause untold death and misery around the world is what I'd do.
How hard can it be?
Edit, and it's comic relief, they bombard us with images of starving children, war zones and illness and death, then use the money raised to invest in the perpetrators of it, come on.. You must admit that's wrong.

Well not only does ethical investment appear to be pretty hard to do (how to you define an ethical investment) but the returns from ethical funds have been insufficient for CR to fulfill it's stated objectives. Do you say tough, we just accept the lower returns?

I am quite surprised by elements of their investment policy tbh but not by their staff or staff costs though. I actually think ethical investments is a misnomer and essentially a non-starter in practical terms.

But nothing has changed my mind yet, that the BBC headline is sensationalist.

What a weird topic.

What gobsmacked me was...

It costs SIXTEEN MILLION A YEAR running costs for Comic relief. Wtf.

It's not just paying the staff who work for the charity, there has to be money available for promoting the charity, and for raising funds through postal raffles/lotteries, you know, those envelopes that drop through the door with tickets in for you to send back, in the hope you might win £5000/10,000, a car, a holiday, etc.
Who d'you think pays for the printing of the tickets, and the envelopes, and the literature that goes in with it, and the people who operate all the processes involved in the mailing, which involve pre-press, (design, film-planning/plate-making), folding, guillotine, enclosing, then who are involved with the response end, sorting all the many thousands of letters that come in every day, opening them, dealing with the cash/cheques/CC details, banking, customer services, like handling phone queries, etc, then doing the draw, sorting out payments to winners, etc...
I work for a company that does all those things, mostly in one building, (printing's done in another unit, warehousing all the pallets of paper and envelopes in another), and there's an enormous amount of work involved in dealing with lots of clients; currently I'm dealing with the postal returns for over thirty different charities, and variants of their individual draws, (up to 140 trays of mail a day, in three deliveries), along with some pre-press, and also scanning RTS/Gone Away returns for database updates, and also helping out running a folding machine.
Where does anyone think the money comes from to pay for a business to actually do what is a pretty specialised operation, that has to comply with charities laws, Gaming Commission, (who were around today), and all the other stuff, like the nit-picking H&S people who been round finding little details to get all flustered over, and being a PITA, and which have to be paid for.
And of course, the company needs to make a profit, and the employees need to be paid...
Is anyone stupid enough to suggest that I, and all my work colleagues, should work for nothing as well?
They seem to think the charity employees should all be volunteers, so, by definition, we all ought to be volunteers as well!
Yeah, right! 🙄

If you raise money on the promise of helping people then investing the money raised in arms and tobacco company's isn't ethical, regardless of how you dress it up

My understanding is that they did not invest in said company - the investment company that the use did. Now you can argue that they should have gone back and checked, but often its not that simple. Here's an example - company I work for uses single use surgical instruments - company has a policy that we do not use any supplier that uses child labour. Many of the companies that produce said instruments are based in ****stan and trying to discover if they use child labour is incredibly difficult. Even more difficult is trying to establish if the companies that they source Stainless Steel from use child labour as they have a number of sources. My company throws a huge amount of (very expensive) resource into uncovering this, charities are not capable of doing this.
In a perfect world they would not invest in this type of company - and in a perfect world they would not have to spend huge chunks of the money they raised on discovering if the companies they are investing in have ethical practices, or if the companies that they deal with have ethical practices or the companies they deal with... ad infinitum.

[quote=natrix said]

Which guns are those?

If it is the case that they have some of their money invested in such a company, I'm also wondering whether how many deaths and injuries it would save if they put their money elsewhere and let somebody else invest in those companies instead.

they put their money elsewhere and let somebody else invest in those companies instead.

That's a classic excuse put forward by governments arming corrupt regimes,- we might as well sell them our guns, if we didn't they'll just buy them from somebody else.

Somebody needs to make an ethical stand at some point. If CR don't want to, that's fine, but don't expect me to give them any more of my money.

Ethical investment isn't new or hard to do, so no investment in arms or tobacco company's that cause untold death and misery around the world is what I'd do.
How hard can it be?

So you didn't bother reading the quote from the Comic Relief website then ?

Trustees have been unable to invest in funds promoted as ethical at the same time as meeting their regulatory duty, to get the best returns at the lowest appropriate risk.

which company Comic Relief is (indirectly) investing in is making the guns used to shoot children.

BAe, try googling Hawk jets and East Timor

That's a classic excuse put forward by governments arming corrupt regimes,- we might as well sell them our guns, if we didn't they'll just buy them from somebody else.

Somebody needs to make an ethical stand at some point. If CR don't want to, that's fine, but don't expect me to give them any more of my money.

How far do you take that argument though? CR has a close working relationship with Sainsbury's - who sell tobacco and alcohol in large quantities. Comic Relief also use Asda to sell their Tshirts - who are owned by Walmart who sell very large quantities of firearms and ammo in the US thereby supporting the arms industry etc etc. Its all well and good saying that someone has to make a stand - but there has to be a degree of realism in that notion, otherwise virtually every company in the world is off limits.

teamhurtmore - Member
Chief Exec £130k last year
5 other got between £90-100k
Total staff costs £13.5m
Total staff 286 (average)
Crude average £47k wage

All there in the open.

I want to work full time for charities. It's far better than what I earn now. I promise to invest the donated money wisely by doubling the interest earned. I don't need excessive bonus but would prefer to be rewarded for my investment prowess.

Alternatively, can I buy some shares in the charitable organisations? When is the IPO? I mean at least I have invested in full proof shares ...

😆

[quote=natrix said]That's a classic excuse put forward by governments arming corrupt regimes,- we might as well sell them our guns, if we didn't they'll just buy them from somebody else.

Yes, that is directly equivalent to saying that if CR doesn't invest in BAE Systems somebody else will 🙄

Let me put it like this for you: if a government refuses to sell arms to a regime, then that might just set a precedent and other governments might follow, therefore making it more difficult for the regime to arm itself. If CR refuses to buy shares in BAE Systems what impact will that have on the market for their shares? Do you reckon other investors are likely to follow their ethical stand?

Do you reckon other investors are likely to follow their ethical stand?

Quite possibly. A lot of folk choose the COOP bank for their ethical stance rather than financial performance. (Barclays, South Africa, apartheid, that Mandela bloke etc etc)

Do all those criticising Comic Relief, and suggesting you won't donate any more, have personal pensions?

Have you scrutinised the investment criteria which the pension uses?

If you feel that strongly about ethical investment I'm sure you'll be happy to forego some potential retirement income to make sure than none of the investment is indirectly in companies you don't like.

Was just going to mention that Poly

I'd be suprised is my savings hadn't been used by the bank for some dodgy investments.

I'm sure the arms firms would love to do more to end hunger and poverty in the world, it's just the damn Geneva convention that gets in the way.

[quote=natrix said]

Do you reckon other investors are likely to follow their ethical stand?

😆 at the idea of it making a difference to BAE Systems business when CR sell their shares

suggesting you won't donate any more

have personal pensions?

If you feel that strongly about ethical investment I'm sure you'll be happy to forego some potential retirement income to make sure than none of the investment is indirectly in companies you don't like

I do

CR's investment policy - fine, all in the open then. Still I don't have to like it and it doesn't make it right.

They are obliged to invest the money as prudently as possible, even if it means profiting from the sale of arms. I'm cool with that. The trouble is, this is after they have successfully canvassed millions upon millions in donations due to their heavily publicised charitable mission to make the world a better place.
It's that hypocrisy that leaves a bitter taste in my mouth.

Surely it's not impossible to help the world without being dragged down into its mess?

Have you scrutinised the investment criteria which the pension uses?

If you feel that strongly about ethical investment I'm sure you'll be happy to forego some potential retirement income to make sure than none of the investment is indirectly in companies you don't like.

Yes and yes. It's what ethic's are all about. Not that everybody has to have them of course....................

They are obliged to invest the money as prudently as possible

They don't have to be indiscriminate in where there money goes, no problem having an ethical investment policy. Investment choice is subjective to a degree anyway.