charity

“A portion of the proceeds”

This may seem unfair with respect to charitable giving, but I wonder if there are any more mealy-mouthed phrases than, “A portion of the proceeds”?

You hear this regularly when people are going to be donating something to a charity. The issue is that a “portion” might be anything from $0.01 to 99% of the revenues raised.

Intrinsically, many of us feel good about ourselves when we buy something knowing that there’s a charitable element attached. Do I favour product A over product B because there’s a charitable element with the former? Quite possibly.

And it’s not as though the companies concerned aren’t doing it, at least partially for genuine reasons. Many businesses have specific charities or foundations that they support, occasionally very generously.

But I much prefer an open and honest discussion about what proportion of proceeds are actually going to a charity. If you say a “portion of the proceeds,” I want to know what that means:


  • Is it a set amount per product, and if so what amount is it?

  • Is it a portion of the sale amount of a product? E.g. 50p for each item sold?

  • Is it a portion of the profits of sale?

  • If based on profits, when does something go into profit? (Entertainment products like books, music and films have notoriously opaque accounting practices, meaning that enterprises that look to all the world as profitable, haven’t in fact become profitable in the eyes of the publisher.)

  • Is it a lump sum that’s being donated?

  • Is there a cap to how much can be donated?

  • Is a business or organisation gaining a tax advantage by donating?

Instead of saying, “A portion of the proceeds,” is going to a good cause, I want to know an amount per unit sold, even if it’s capped, or a percentage. Because if you make a big deal about giving 0.05% of your net profits to a particular cause, I’m not going to think quite so highly of you. (Although admittedly, if you’re Apple, that 0.05% of $45.7bn is still a very sizeable $22.9m pa.)

How Effective is the Charity Single in 2014?

In the last full series of More or Less, there was a really interesting episode that looked at charity giving and what is the most effective way to give money. It is not an easy question to answer as the programme clearly addresses.

I was thinking about this over the weekend when Bob Geldof was gathering another group of musicians, artists, and assorted famous folk, to record a new Band Aid version of Do They Know It’s Christmas?, this time to raise money to combat Ebola.

A fine cause undoubtedly, and the intentions behind this new charity recording are very good.

In 1984, the first recording was a phenomenal success, raising $24m and selling 3.75m singles to raise money to fight famine in Africa. This was followed, of course, by the even more successful Live Aid.

Charity records probably weren’t new then, and certainly haven’t been since. We’ve seen a succession of records raising money for charity with varying degrees of success. Indeed, the current number one is Gareth Malone’s latest in aid of BBC Children in Need (£32.6m raised this year).

But this is what got me thinking. In 1984, if I’d bought the Band Aid single (someone in our family did as we had a copy at home), it’d have cost about 99p to buy the 7″ in the shops.

Today, if I go to Amazon or iTunes, it’ll still only cost me 99p. Sure, the CD single will be more like £4, but there’s barely anywhere left to buy CD singles, and the majority of sales will surely be downloads [Disclaimer: It’s possible that supermarkets will give this heavy promotion in stores, shifting the balance a bit towards the physical product.].

According to the Bank of England’s inflation calculator, £1 in 1984 was worth £2.80 in 2013.

This highlights:

1. How cheap music is today in real terms compared with 30 years ago.
2. How relatively little you’re giving in 2014 when you buy a charity single download for 99p compared to what you would have done previously.
3. That if you’re going to buy the track, you really should wait and buy the CD (except it’s not out for another three weeks, while the download is on-sale now, and the track will surely be number 1 next weekend).
4. And that you really shouldn’t stream the track as a proxy to buying it – revenues that way will be paltry. At least buy it on CD when it comes out if you’re streaming it in the meantime.

With the single being VAT free, and retailers unlikely to take their cuts, we can assume that nearly all the money raised from sales will go directly to charity. And there is no doubt that the million pounds or so Geldof says has already been raised is probably a million pounds that wouldn’t have been raised without this single.

But I guess what I’m wondering is whether the charity single is the most effective way of raising money in 2014?

They probably get fans of some of the performers to buy the single when they wouldn’t have otherwise given to, say, the DEC appeal, which reported about a week ago that it had raised £20m in the UK. And we’ve seen Facebook in recent days add very prominent buttons on its desktop and mobile applications to allow users to give generously. The mobile networks let you donate very quickly via text to the DEC, and Paypal lets you donate via your account. All of these are very convenient and easy ways to give. They also make it easy for UK tax-payers to Gift Aid their contributions thereby increasing the value of their donation.

I have no solution, but I do think that we need new ways to generate serious money through popular culture beyond the charity single.

I look at the success of “totalisers” for things like successful Kickstarter appeals, or the amazing success of Stephen Sutton, the teenager who tragically died of cancer, but dedicated the last months of his life to raising funds for the Teenage Cancer Trust – up to nearly £4.5m.

I wonder if there’s a new model that can generate bigger amounts?

In the meantime, I’m not knocking Bob Geldof or the artists and performers in involved remaking this Band Aid single. They’re doing what they do best, and trying to raise much needed funds to fight the Ebola outbreak.

And just to put thing in perspective, the UN Office for the Coordination of Humanitarian Affairs says that nearly $1bn is needed to properly fight the outbreak. To date $685m of this has been funded (Note: not all money given to Ebola causes will necessarily flow through the UN – see this edition of More or Less for a bit more on that). That gives an idea of the enormity of the issue we’re facing. In particular, many of the BRIC countries need to step up according to British officials in this FT report.

Addendum: I must say, I really didn’t like the public “naming and shaming” of artists who chose not to take part in Band Aid 30. It is always up to any individual how he or she wishes to give to charity and the form that is right for them. Calling people out for not doing what you wanted is completely unacceptable.

PS A significant proportion of the comments at the bottom of this review of the Band Aid 30 single in The Guardian single pretty much encapsulate why the bottom of the internet is sadly no longer worth reading in mass publication titles. But that’s a blog for another day.