David Craig, on July 25th, 2013I’ve been trying to make sense of Oxfam’s accounts to see how much/little of our money actually goes to charity. Here are some first thoughts.
Oxfam’s total income last year was £385.5m. But only £286.5m was actually used for what Oxfam and the Charity Commission call “charitable expenditure” – a reasonable, but not impressive 74.3%. Why so little?
Oxfam seems to have 3 main sources of funds – shops, public donations and government grants.
Its shops raise £89.9m, but cost £67.6m, leaving just £22.3m for charity. Not great, considering the people working in the shops are mostly volunteers.
It raises about £295.6m in donations with a cost for raising this money of £23m (7.8%). That looks pretty good. But £159.8m of these donations come from government, large institutions and public authorities. So, actually only £135.8m is raised at a cost of £23m (17%). Not great, but not disastrous either.
So we now know that of the £385.5m raised by Oxfam, £90.6m (shops – £67.6m plus fundraising – £23m) of this is spent getting the money in. That leaves about £294.9m to be spent.
Then we have to knock off about £31.9m for support and governance costs, leaving £263m – 68% of the £385.5m raised – available for charity work.
Now comes a bit of guessing. Oxfam’s staff costs are £59.5m in the UK and £42.3m overseas – total £101.8m. If we assume that say a third of these staff are in administrative and managerial functions and that two thirds are doing real charitable work, then the administration and managerial staff costs would be £33.9m. This would leave around £229.1m for charitable work (59.4% of the £385.5m raised).
Of the £229.1m available for charitable work, £90.6m is handed out in grants to other charities. As they will certainly have managerial and administrative costs of 20% or more, that’s another £18.1m not available for real charity. That leaves us with £211m – 54.7% of the £385.5m raised by Oxfam (click on chart to see more clearly)
Then there are a few other costs I haven’t included like the £48,000 expenses claimed by Oxfam’s top boss.
By my reckoning, only about 50% or less of the money given to Oxfam is actually used for real charitable work. That’s pathetic.
Then there’s one other not so small problem – how much of the money actually used for charity is lost to Third World corruption and incompetence? I’ll do a separate blog on that in the next couple of days.
All in all, you’re probably wasting your money if you give it to Oxfam and you’re probably wasting your time if you’re one of the 22,000 volunteers who help out at Oxfam.
(Tomorrow, I’ll have a brief look at the BBC Children In Need charity to see whether it might be more generous to its own employees than it is to the children it is meant to be helping)
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Hi, Less then 50% gets to help the intended charity.
I agree this is not good but what really is the answer?
Possible better control laws! but until then, some money getting through to help is better then zero money .
I hear people use the,; get out argument, not to give money; The poor will only get a small percentage so I,m not giving.If there is an alternative lets do it. but to do NOTHING, helps no-one.
We do need to know the facts and one of the facts are if no help given, all die. give some help and some live maybe to help others.
Things are getting better very slowly.
I’ve suspected for a long time that very little of any charity money actually ends up where it is intended to go. I have watched endless campaigns that have amassed staggering amounts of money on an increasing yearly basis being allegedly pumped into good causes in third world countries, and the ever sickening endless parade of z list ‘celebs’ playing football, stroking dying children, tearful pleas for money daily forced upon our screens. What I have never seen is any of these ‘celebs’ actually talking to the government leaders of these needy countries and actually pointing out that ‘their’ people desperately need their own governments help, which is one of the main reasons I do not give money to them.
Hi there, I just had a nice young man from Oxfam knock at the door asking for money for an emergency appeal which he said goes straight to help the 43 million people currently homeless and dispossessed right now. I promised him I would take a look online as I did not want to feel pressured into giving money right then, I am trying to study and prepare food for my family who arrive shortly.
Anyhow to cut a long story short, any tips on a charity where my money will really make it somewhere meaningful and have a positive effect?
thanks
Mark
Oxfam is a huge worldwide organization, do you not think it would have huge operating costs?
Although a lot of people think every penny Oxfam earns should be spent of food or building wells a huge amount of what they do is based around policy research. They are also a campaigning group aside from providing aid and emergency relief.
This is clearly a very naive article by someone who can do basic maths but has no grasp of the problems associated to poverty and how organizations such as Oxfam try to address things on a larger political scale
I raise money for charity each year not millions but I do raise thousands.
I keep all money raised for local community projects enough money leaves this country for foreign countries but not ours local local local is what I say
give if you can but this country needs help to people here are struggling to
There are lots of inferences and assumptions to warrant such firm conclusions. Has the author given Oxfam the right to reply/provide a counter-narrative? If so, will he publish their response on his blog please. Why no comparitors? surely that’s essential for an article that makes such contentious and far-reaching claims?
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http://www.ted.com/talks/dan_pallotta_the_way_we_think_about_charity_is_dead_wrong?language=en#t-802070
Paul is right. Please watch this very informative TED talk
Oddly, Oxfam’s own website shows you are wrong.
just donated $25 a month to oxfam will %50 go to the kids yes or no who has the write answer
http://www.independent.co.uk/money/money-charity-shops-and-the-cash-that-wont-reach-the-needy-1276435.html
This piece from the Independent might be of interest
To do nothing is not the answer.
To give locally only may mean a higher percentage actually goes to what its meant to, but means the migrants will continue to come here.
The real answer is to hold the governments in these needy countries to account. Much of the “administration costs” and a lot more besides is skimmed off by corruption, bribes & backhanders to the people in power in these countries. If this cycle was broken there would be less need in Africa, less migration, less starvation.
Until there is an end to corruption your money has to be broken down like this – its a necessity to get any relief through.
To understand Oxfams expenditure you must first stop thinking of it as a charity. It is a business designed to be sustainable and use its profits for good. You seem confused about why OXfam shops cost so much to run. If you’ve ever worked in an Oxfam shop you’ll understand why. The cost of shops includes rent, new stock, transport, maintenance, managers, deputy managers, till operators, the collection of rubbish and recycling materials, the cost of the main distribution centre and recycling centres ARE included in OXfams shop operations. the list goes on. A oxfam shop in a affluent area will take around £7-12,000 a week. Compare that to most other retail stores and you’ll understand. The majority of Oxfam stores aim to sell items cheaply enmass. If you think that Oxfams stores are going to be as cost efficient as a high street retail store then you’re having a laugh.
Simple solution.
Our foreign aid budget should be controlled by our government. Not given away to charities and other countries governments. Oxfam should not call themselves a charity as they are business. Especially as the CEO is claiming expenses. Disgraceful. Anyway to make our government accountable for where it sends foreign aid it should employ contractors to carryout this work in these foreign countries to help them build their infrastructure of transport, economic centres, and sewerage and water supply. Those three things can easily help develop a country. Just think how much of this could be created as well as high level education for these poor citizens with just one days contribution to the EU (£56million). Shocking to think that paperwork is more expensive the construction.
This probably isn’t going to be liked but it is a reality. While we donate to help people in third world countries, which we can feel proud of ourselves for, large global companies see an emerging, Cheap Workforce. As these countries become healthier and life expectancies increase they will have to become more economically viable just to survive. And we all know how companies are looking to cut costs and increase profit. So thanks to the generosity of hard working people trying to improve these peoples lives, we are actually making our own lives, and those of our children, more complicated.
it is a little naive to think that a 400 million a year turnover organisation is only going to have small running costs. Oxfam are huge and if you are saying half of everything donated is going to those in need then I think that is an amazing job by Oxfam. Its by running those shops and paying qualified staff that they are able to react so quickly to emergencies and to help so many people. lets stop trying to have a go and support their work!
One of the aspects I like about organised religion are tithing requirements where you give a percentage of your income charity and feel it should be carried on as moral obligation.
But if you are going to give money to charity surely it makes sense to research it in terms of ethics, impact, value for money. Its very hard to do this with corporate charity which consequently also have much larger running/advertising costs which is why i would always choose to support grass roots.
I’am 68 year young I can remember giving to dig water bore holes as a kid? and still they have not finished the job? WHY? also so now pissed of with having phone calls, adverts on TV asking for money, and watching a nice TV film then having CANCER advert in every advert ? I’ve stopped all my donations about £25 per month. also top wages paid to staff.
local lions or rotary 100% goes to local needs.
So many Charities asking for money. So many people in this Country needed our help the flood victims for one. Homeless people everywhere. How many of these people that have standing orders to these charities look after their own old relatives. Look how much is raised by the TV campaigns and they still want more year after year. Has all this money been spent or is it sitting in bank accounts?
Charity should begin at home we should put our own house in order
We are more like a third world country with food banks homeless people
and mad unemployment and to think we are supposed to be the eight richest
country on earth heads of charities traveling and living first class lives on
Donations from the less well off shame on them
ummah welfare is 100% donations, I donate to them and don’t trust other charities as also some of the money goes on printing out pointless letters and calendars to thousands of people and tv ads that cost millions when it should be going to the poor!
Give to those you know.
For over 50 years charities like Oxfam, world vision, Plan, etc have annually been collecting hundreds of millions of dollars from rich-country citizens, in the name of reducing poverty in Africa, yet very little of that money gets to the people who should use it to dig themselves out of poverty. So more more and more Africans are getting into poverty for eternity. A few smaller charities like ICAFRICA.com have found a way to give small amounts of money, as little as $100, directly to family breadwinners for micro-business and for farming and that seem to quickly move entire families and communities out of poverty. The big charitable organizations who control billions of donor money, are not in a rush to solve the problem of extreme poverty over there because if that happens, they will be out of work. They have built huge charity industries and created jobs for life for their very well paid employees. As a donor in today’s world, I shop around and find out how a charity spends my money before I write a cheque.
Some questions that never get asked about OXFAM:
1 Why did it not speak up about poverty when the bulk of the world was a colony of Britain or some other Europeans? My parents lived through the Bengal famine of 1943 which is considered to be one of the largest man made famines, resulting in the deaths of over 3 million Indians. Churchill’s response to requests for help was that ‘It can’t be that bad, Gandhi isn’t dead!’ My parents don’t recall OXFAM uttering a peep of protest even though it was set up to help people suffering from famine.
2 Why does OXFAM and similar organisations not acknowledge the work of local groups? Mark Tully of the BBC considered this to be because it would hinder their own fund raising efforts. OXFAM couldn’t have penetrated India, Africa etc. etc. if they had not fought for independence and were still colonies. I found the people working in Indian NGOs far more interesting and knowledgeable than the rank and file of OXFAM supporters.
3 Why did OXFAM Australia not do anything for Aboriginal and Torres Strait Islander communities till it was challenged to do so by the people of countries it was going out to save?
This is not to say that OXFAM does not do good work, it is how it goes about doing it that is now the issue.
Like most large charities they are run mostly by volunteers at ground level to keep fat cats at the top in work if you can call it work attending dinners & functions. Small local charities are the only ones that do good work. These are run by trustees & volunteers. These are the ones that struggle for funding.
Since I was at junior school, over 60 years ago, we were asked to give money to build water wells across Africa. From the millions that by now has been donated, I would have thought that there would have been enough to supply a well for each and every family in Africa. Where and what has all this money been used for.
10 million pounds donated by government. Whilst I would not have chosen to donate over £45,000 of my money to Oxfam. Government clawed back £45,000 of my state pension fund. The say there is no funds to reinstate a promise to women of a certain era but are able to show acts of generosity to impoverished nations that continue to repeat the mistakes of over population; greedy, wealthy and unscrupulous governments abroad who benefit from their annual crisis. Its time this money was accounted for – directly take responsibility for and establish businesses and provide employment opportunities; provide free contraception, water and shelter. I am less content to know that only half of my £45000 will go to those countries and probably only 20% of that will filter through to the people who need it the most.
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As an ex Oxfam shop manager who was only paid 24hours to run a full time shop, I can tell you that the senior managers are ineffective and remote. They want to believe that unpaid staff (volunteers) will come and play shops and that will be capable and reliable as if paid.
This is very far from the truth. I worked every week over my hours to keep shop open (as always let down by these ‘backbone of Oxfam’ and of course not paid for it.
I was the union shop rep and I made the management very uncomfortable by keep asking straight questions i.e. why are we relying on vols? cos theyre not there??
Anyway got made redundant but not before I found out that they wanted me gone as a union rep and found evidence
So I took legal advice and sued.
And yes all the shops profits go to pay the workforce sitting on their backsides in HQ.
There’s so much to say on this subject and probably it’s a lot more complicated than even those who believe they understand how the world works realise. IMO 99% of those who work in charities such as I FSM are doing so for the right altruistic reasons. Yes, even those at the top (most could probably get paid twice as much doing the same level of work if employed by a capitalist profit-making company. Yes, Oxfam is a business and needs to make a profit to survive (or, at least, needs to balance its books). Actually, as a charity, I guess it is not allowed to make a profit as such – and that’s a good thing. In fact, I believe they are fighting a losing battle but that is ‘cos the odds are stacked against them in the current economic system (designed to allow obscene corporate behaviour and profit, exacerbated by increasing population and disgusting corruption in many places, which, I believe, is tolerated because it benefits the same corporate elite). That is why it is important for Oxfam – and other charities – to campaign as well as provide food, shelter, water. They actually OWE it to their donors to campaign and lobby government because, in our system of governance, IF they can persuade a law change, or affect that details of legislation, it would likely be worth more than millions in the resulting affect on the lives of those we are all trying to help (whether people , or animals, or our environment). So we should be thankful for the Oxfams of this world. Without them it would be an even worse place. Oh – and in 1943 AFAIK Oxfam did not even exist. It was set up around 1947 to help the destitute ravaged by the bitter civil war in post-war Greece.
Relating the profit raised through retail activities purely to staff costs is over simplistic. Charity retail operations still pay commercial rents, discounted business rates, utility bills, insurance and repairs. Wages for shop management and senior staff come on top of all that.
I’ve just been restricted on Oxfams Facebook page. They still come to my fb page, but, it would seem, I cannot comment on theirs. I emailed to enquire why, they told me they have in house rules, one of which, presumably, I have broken. I have asked what exactly I have said to break these rules, however I’m still awaiting a reply. Obviously this is just censorship. I continuously question the CEO’s overly high salary so I think that’s why. Funny how the zealots that follow them religiously can say what they like, even calling people names. They are a disgrace
Why do you say the CEO is paid too much? As far as I can see, Oxfam CEO is paid far less than the CEOs of other large charities, and a small fraction of what could be earned in the corporate sector. Those who take the job do so knowing they will not earn so much, but they do it out of love for the job and dedication to the eradication of poverty. Despite the recent Murdoch campaign against Oxfam, which makes a lot pf money for his newspapers, I will continue to support Oxfam.
I once asked a BBC reporter how much money has been given to overseas charities from the uk since 1945. He hung up !!!
I really would like to know.
Then there are a few other costs I haven’t included like the £48,000 expenses claimed by Oxfam’s top boss. I NO YOU NEED
SOME ONE TO BE THE BOSS BUT HOW MEANY PEOPLE WOULD DO IT FOR
FARE LESS
I actually thought a lot less would go to the charitable cause. I’m happy donating to Oxfam know three quarters is actually going to the needy. Being one of the larger charities I don’t believe it would be cheat to direct. I’ve read an article advising that very little needs to be donated in order to be considered a charity and a lot of them are much more like businesses.
Oxfam has ben trying to get my pocket money since about 1956 ( it was formed 1942 ) to help unfortunate people in other parts of the world. In those 52 years the money has come & gone very little has changed . Happen it had been spent in birth control & education of such things it would have been far better for those very same peoples .
It often seems that all Oxfam does is provide an emotional band aid for trouble consciences .
Sorry. go to Brothersbrother foundation and you’ll see WHY they’re rated in the top 5 of ALL charities
Worth noting that the shops do a lot to help people develip skills. I worked in Oxfam shops for about 3 years with other young people and some skightly older people who were struggling to find work. I developed a lot of skills and confidence through their mentoring. Pleased to say the experience helped my unemployed friend into retail with Wilkos and she’s held the job ever since. When I was there my local shop had about 8 of us aged under 20 across the week plus about 5 slightly older people trying to get back into work, so a lot of skills were being learned and we were putting a lot into the charity too. It was a great environment.