Charities and Non-profit companies have become a major part of delivering public services. You will find these organisations operating in health care, education, culture and more, yet there seems to be very little media scrutiny into how these companies operate, this could be because they are often seen as small-scale and acting in the public interest – this is not always the case.
IKEA CASE STUDY.The last time you struggled to slot together a brain busting puzzle in the form of a flat pack bookshelf did you know that you were supporting “innovations in architecture and interior design”? That is the aim of the Ingka Foundation, the tax exempt, non-profit trust that owns Ingka Holding – the parent company of all Ikea companies. Yes, the home of Meatballs and cheap chairs is a charity, and quite a big one too, The Economist estimates the trusts net worth to be around $36 billion, making it even larger than the Gates Foundation. (I’ve simplified this example, but you can read the full Economist article here) So how to we investigate these organisations?
Firstly lets look at how the two types of organisations operate: Charities – operate under The Charities Act 2006, the key element of which is that they have to operate for charitable purposes. There are 4 core ways in which a charities are legally structured: Non-Profit – Most operate legally as a company limited by guarantee this means that instead of distributing profits to members they keep the profit within the organisation or use it for another specific reason. If you intend to investigate either type of organisation your first stop should be the organisations own website. Their website should give details of their aims and objectives, how they intend to achieve these aims, a list of key staff members & trustees and financial information such as annual reports. Most organisations should be more than happy to share this information, even if it’s not published on their website, if they are not willing to share this information it may suggest that something is not quite right. Most charities will be registered with the Charity Commission (England & Wales) or the The Office of the Scottish Charity Regulator (Scotland). These bodies exist to regulate charities and to ensure they operate within relevant laws. They operate a list of regulated charities and publish documents related to each one (such as annual accounts). There are some exceptions such as Academy schools, which are regulated by Department for Education (DfE). It’s worth noting that all three regulatory bodies are subject to the Freedom of Information act, which means that you may be able to uncover information about a charities compliance with the Charities Act 2006. Regardless of whether or not the organisation you are investigating is registered as a charity, it is worth searching the records at Companies House to find further information. Once you have the basic information on the organisation some of the things to look out for include: Who’s running the organisation? what else are they involved in? How is the organisation spending money? Staff salaries? Administration costs? – How much money goes towards the aims of the organisation? Is the charity / non-profit org benefiting a corporation or individual? -This could be done through various means including procurement or even through the use of volunteers in place of paid workers. (for example a drug company director might establish a charity to procure drugs from the drug company for distribution to developing countries) This is a brief introduction to investigating charities / non-profits, I’m sure you’ll have some more ideas and It’d be great to see those ideas in the comments.