All those good people who dutifully make fools out of themselves to raise money for good causes must be feeling a lot more foolish just now. Comic Relief has swapped its red nose for a red face after the Panorama expose that was aired on Tuesday night.
The charity may well be helping to avert disaster in other parts of the globe, but it has failed to effectively manage its reputation, the question now is just how bad the damage will be and whether the public will be quite so generous next time around.
Sometimes PR disasters are the result of innocent blunders, sometimes the result of bad behaviour, sometimes the organisation has done no wrong but just ends up looking bad.
Comic Relief at first claimed it had done nothing wrong before performing a U turn a few hours before the documentary was broadcast.
What Panorama revealed was that Comic Relief has been sitting on cash reserves of around £100 million which it invests in the Stock Market in order to make profits which allow it to pay its £17 million running costs and therefore keep its pledge to ensure that for every pound donated a pound is spent on a good cause.
This sounds like a really good ruse – except for two things. The first is that when we give on impulse to charity we tend to have an expectation that our money will be put to use immediately rather than invested in shares for a few years. Secondly it transpires that several million pounds have been in tobacco, arms and alcohol companies. This is great news in terms of getting a good return on investment, not so good when you consider the moral and ethical implications for a charity which is trying to make an impact in the Third World, so often scarred by conflict and health problems.
So how did Comic Relief respond and what will the damage be?
Being really cynical the timing has been as good as it could be for the Comic Relief team. The documentary was broadcast after this year’s appeal was complete, after being delayed for legal and other checks. Secondly it was shown on the night of Nelson Mandela’s Memorial Service two hours later than its normal slot. Yet despite the fact it was buried down the news schedule on Tuesday the expose was the most read piece on the BBC news site, with way more views than the Mandela story, so it has certainly been noticed.
And when the charity asked for celebrities to take to social media to support the cause, the request had the opposite effect. For example comedian Frankie Boyle tweeted to his 1.5 million followers: “Those fairy cakes your kids baked for Comic Relief bought [Ugandan warlord] Joseph Kony a rocket launcher”.
The story first began to surface in the Spring and so comic Relief has had plenty of time to respond. It gave a clear and reasonable explanation for holding on to cash: to give time for other organisations to bid for funds and also monies were held back in order to ensure donations were well spent. But on the much more damaging issue of investing in arms and tobacco it blundered badly.
The reputational damage looming was obvious. It should immediately have stopped investing in the controversial businesses and announced the adoption of an ethical investment policy.
It deployed a law firm which tried to get the programme stopped stating it would “damage vulnerable people in the UK and around the world”. It stated that it had a duty to ensure it got the maximum return on its investment and then refused to say whether it was continuing to buy and sell shares in tobacco and arms.
This response did not go down at all well and so, at lunchtime on Tuesday chief executive Kevin Cahill announced the inevitable U Turn in a last ditch attempt to close the issue off.
Whether or not he is successful remains to be seen. There’s a long time before Comic Relief will be on the airwaves again, if indeed the BBC decides to retain it.
But there are lessons here for the voluntary sector. Many charities have become just like businesses, the only difference being that profits generated do not get paid out to shareholders but are invested back in the cause.
There is nothing wrong with that and it helps to ensure that they are, or become self-sustaining. However there is an important difference. Businesses exist in order to make a profit, charities exist in order to make a difference to others. We support them, volunteer for them and donate to them because we believe in what they do.
They in turn need to be careful. The public does not like charities paying their people excess wages. Mr Cahill gets £131,000 a year, which frankly is towards the upper limit of what the public deem acceptable five staff get £80,000 plus, a lot more than we pay our MPs.
And in the drive to make a difference across the globe we expect the highest ethical standards, not those of Gordon Gecko and the financial markets.