Fundamentally the stories relate to a worrying disconnect, fuelled by poor journalism, between public perception of how charities operate and the reality. The debate is not helped by the view that charities are homogeneous – that the challenges of leading a complex organisation such as Oxfam or Barnardo’s are comparable with those facing a local community-based charity. The public would not make the same assumptions about Tesco’s and a local family run corner shop – yet newspapers are quick to print comments by outraged donors who compare what Justin Forsyth at Save the Children earns with the manager of the local hospice or indeed the volunteer-run local PTA.
The second area of contention is around ethical investment and the simplistic view that organisations can avoid anything remotely controversial and still generate a healthy investment return. The Church for instance invests in hundreds of companies which, if you delve below the surface might, to the purist, be considered no-go areas. BT for example carries adult entertainment channels (but no one would consider it to be a pornographer, it is a communications company). It invests in HSBC (money laundering), Vodaphone (tax avoidance), Shell (pollution/drilling in Niger delta), Google (breaches of privacy) and Walt Disney (an alleged Nazi sympathiser!).
When I worked for a children’s charity there was an outcry internally when we decided to adopt a house font that had been designed by Eric Gill, a self-confessed paedophile. And so it goes on. However, I’m afraid the press, public and charities are going to have to grow up a bit. If we are to achieve a balanced portfolio which doesn’t result in massive investment concentration around a few stocks (which maximises investment risk), then we have to recognise that we live in a fallen world populated by fallen people, and make the best stab at being as ethical as we can.
I believe the right approach is one of humility. We should come clean and admit that at best we ‘aspire’ to be an ethical investor. We should not invest directly in companies that operate in contravention of our charitable aims or that manifestly operate contrary to the common good. We should actively engage with companies we invest in to help develop an ethical business stance and be prepared to withdraw investment if the company won’t change. That is what grown-ups do – they learn to live with ambiguity and to make the best of it - and the charity sector needs to say that.
CFG is holding a debate during National Ethical Investment Week which is taking place 13-19 October 2013. Further details will be available on our website soon. Ian Theodoreson, Chair
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