The Sceptic Blog

Random thoughts of a random chappy

All Proceeds to Charity – Promise or Prayer?

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1.  Nowadays it is common to see the words “all proceeds to charity” or something along those lines on all kinds of advertisements, from books to concerts.

2.  There are, however, a few potential ambiguities with this formula, based on the uncertainty of what is meant by “all”, what is meant by “proceeds”, what is meant by “to” and what is meant by “charity”.

3.  Proceeds is generally understood in this context to mean profits, and fair enough: although in some cases the actual cost of producing whatever it is has been generously underwritten by a charitable donor, in which case the gross receipts from “customers” may go to charity, in most cases it is accepted that proceeds means proceeds net of actual expenses.

4.  But what amounts to actual expenses in this context varies widely.  In particular, where the person who is offering the service is paying himself or herself a salary out of the charity’s funds, “expenses” is likely to include a deduction that goes into the pocket of that person and possibly other employees of the charity.

5.  Again, fair enough, one may say: people who run charities also like to eat occasionally; and where a charity requires more time and expertise than can be provided by a part-time amateur, the charity will of course need to factor into its running expenses the costs of salaries for its staff.

6.  But in order to avoid halachic questions of theft from public funds and g’neivas da’as (“stealing the mind” – creating a false impression) three things are needed – transparency, accountability and proportionality.

7.  As to transparency, it should be clear to donors that they are contributing towards the living expenses of the person or persons running the charity.  Sometimes this will be sufficiently clear by implication: but not always – and if there is reasonable ambiguity, it should be dispelled in some appropriately express way.  And if the person collecting for charity is on a commission, the amount of that commission should be made clear to the donor at the time of soliciting the donation.

8.  As to accountability, charities should not just produce the accounts required by the Charity Commission: they should produce and publish their complete accounts so that people who donate even small amounts are likely to have access to the accounts.  For example, if a charity has a standing advertisement in a synagogue, the annual accounts should be sent to the synagogue and it should be invited to exhibit them in the same way.

9.  As to proportionality, salaries should be proportionate both to the resources of the charity and to the qualifications of the person providing the services.  One sometimes suspects that people pay themselves or are paid out of charitable funds salaries at a rate that they would find it hard to command in the commercial sector.

10.  Those who run charities without charging for their time, or who give all their time to charities and charge a reasonable amount for it, do an immense service both to those whom the charity benefits and to all of us who they allow to participate in it through donations.  But by agreeing to run a charity one accepts a sacred trust that must not be tainted by hidden or unreasonable personal gain.


Written by Daniel Greenberg

December 21, 2009 at 8:02 pm

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