Olympic hero Mo Farah has closed his charity after it spent more on “marketing and a glitzy ball than on helping kids in Africa,” ran the Sun on Sunday’s story. It’s a story that has raised many issues, including how much should be spent on fundraising and whether or not charities should continue operating if they aren’t spending enough on frontline services.
A glance over the Farah foundation’s accounts shows it’s true to say that the charity spent “more on marketing and a glitzy ball than on helping kids in Africa” in 2014-15 – the costs of a fundraising ball ran to £82,000, compared to charitable expenditure of £48,000.
What the Sun didn’t report was that the ball generated £108,000 of income, a surplus of £26,000 to be spent on charitable activities in the future. That’s important, because a charity’s projects might take place after the year in which funds are raised, but the annual report wouldn’t obviously show that. Moreover, the foundation is now closing down and plans to hand over its remaining funds, around £400,000, to a charity working in the same area.
The rest of the Sun’s story includes comments from staff at a beneficiary school in Kenya who said the vitamin pills the foundation provided them with weren’t the desks and chairs they actually needed. This suggests the charity may have struggled with its operational side – getting the help they needed to people on the ground.
So, it’s clear that although the charity was not in bad shape financially, setting up and running a successful international development charity is distinctly challenging. It’s why professionals are paid to run charities. Reading the foundation’s annual reports, and other documents (pdf), the striking thing is that there wasn’t a clear strategy or focus to its work. Its mission encompassed a broad remit over a vast geographical area. According to their annual reports, the activities of this relatively small charity ranged from digging wells in a number of African countries to providing sports scholarships in the UK. It’s hard to develop expertise when you’re attempting such a range of work. And it’s why the best charities are increasingly thinking about how they make an impact.
It’s also raises the question: at what point should a charity that is faced with challenges close down?
Shutting a charity needn’t be an admission, or a sign of, failure. It can be a sign that it has achieved as much as it can, or that the trustees have recognised their limits and want to hand over to someone else. In the last year, charities such as Community Development Foundation and Involve Yorkshire and Humber have closed, recognising that others are better placed to take forward their work. Similarly, foundations such as Atlantic Philanthropies spend out – using up all of their funds at once. The important point is to make the decision in enough time, while you still have choices, be that an orderly closedown, merger or takeover, or transfer of assets to a charity working in the same area.
Indeed this seems to be the case with the Mo Farah Foundation. As the annual report says, “the trustees having taken independent advice have agreed that the objects of the charity could be more effectively met through the activities of a larger and well-resourced charity.” This sounds like a wise decision to me. It’s a lesson more people could learn: that the best way to help a charity’s service users might be for another charity to address their needs.
And finally, for sportspeople and celebrities who, laudably, want to use their profile to help do good – there’s an important lesson here too. Establishing and running a charity is no mean task. It’s entirely possible – but is it the most effective thing they can do in most cases? Unless they have a very particular focus and some serious professional advice, quite probably not. It’s better in most cases to lend their time and profile to a charity whose work they’re interested in, as many do.
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