As commercial companies seek to expand their slice of the charity market, the growth in deals between commercial publishers and charities has been mirrored by growing public concern over how much charities actually receive from these deals. To this end, Christmas 1995 sees the enforcement of a section of the 1992 Charities Act which, in an attempt to ensure public confidence, states that a retailer must indicate clearly what proportion of the pack price it pays to charity.
"The Act has made a big difference," says Stephen Lee, director of the Institute of Fund Raising Managers. "It makes it clear that someone other than the charity is making money out of the trading relationship in an upfront way.
"If your sole intention is to support a charity, you should buy direct from that charity. However, if you want to purchase a card, and as part of that purchase prefer a charity to benefit, then buying royalty cards is a good thing. There are many good relationships developing between charities and the commercial sector."
The Labour Party, however, is still calling for a code of conduct to give charities a "fair share" of the profits rather than just settling for whatever percentage they are offered.
"Many charities complain they are feeling the chill from people switching their donations to the National Lottery," says Nigel Griffiths, Labour's consumer affairs spokesman. "This makes them desperate to get any revenue they can from the publishers of charity cards whilst the public wants more money to reach good causes."
Buying cards directly from the charities themselves is the most beneficial way of making a contribution. The Charity Christmas Card Council (4C) represents more than 90 charities by marketing their cards for them. It passes 82 per cent of the card price to charity. However, each charity's own costs, such as card production, need to be subtracted before reaching the profit percentage. "They usually end up with 40 to 50 per cent of the pack price," says Patrick Hazard of 4C.
Card Aid, a subsidiary of the Charities Advisory Trust, itself a registered charity, acts as a card publisher for 127 charities, including Shelter and Battersea Dogs Home. It guarantees at least 25 per cent of the retail price to the charity after all deductions and sells mostly through special temporary outlets.
This year's coup was to persuade Selfridges in London to sell only Card Aid cards. "It made sense from a commercial as well as ethical point of view," says Selfridges' acting card buyer, Julie Blake. "Last year, charity cards had such a bad press and sales weren't so good. The charity card buyer is very discerning, so we decided to go with Card Aid."
The Charities Advisory Trust report Licensing Deals for Charity Christmas Cards, published today, aims to equip charities with information on who is getting what and how to negotiate the best deal in the commercial sector. From figures studied across 28 retailers and 43 publishers, it pinpoints the best and the worst charity and commercial relationships. Whistling Fish cards, for example, came off worst. Sold through Books Etc, it gives 10p to the Muscular Dystrophy Group from a pack of eight cards costing pounds 4.99 -about 2 per cent. Of the retailers that produce their own-brand charity cards, the most common charitable donation is 10 per cent. Tesco, Marks &Spencer, Boots and Woolworth, for example, all give 10 per cent.
Some charities are into licensing in a big way. Save the Children Fund, for example, has no fewer thaneight deals. "We look to get 10p in the pound. Anything less is unacceptable and more is a bonus," says a Save the Children's Fund spokesperson. "We have royalty agreements because it's an extra way to bring income to Save the Children that we wouldn't normally get. The retailers bear the risk, so although we get more from our own catalogues, it is an added bonus."
Ron Corbett, head of Mencap Trading, agrees that the commercial donation is invaluable for charities. "The royalty-linked cards get a lot of critical press coverage at this time of the year, but nobody asks what the charities think. This is an extremely valuable and vital part of our fund-raising. We are not concerned with what percentage we get, just how much money is raised in total. Mencap raise tens of thousands of pounds through this route."
The Charities Advisory Trust report suggests that it is the manufacturers, not the charities, calling the shots, with charities having to accept the best price they can get from the manufacturers. As Mr Lee says, "This is a commercial enterprise with a philanthropic element, not a philanthropic enterprise in itself." However the report shows that since the rules regarding labelling were introduced the average commercial donation has risen from about 4 per cent to 10 per cent
Whatever the donations, it is worth bearing in mind the words of Hilary Blume, director of the Charities Advisory Trust: "The real key is that every charity Christmas card helps more than not buying one at all."Reuse content