Resolution Statement: Complaint 00183-16 Etherington v The Daily Telegraph

Resolution Statement: Complaint 00183-16 Etherington v The Daily Telegraph

Summary of complaint

1. Sir Stuart Etherington, Chief Executive of the National Council for Voluntary Organisations, complained to the Independent Press Standards Organisation that The Daily Telegraph breached Clause 1 (Accuracy) of the Editors’ Code of Practice in an article headlined “1000 charities ‘spent less than half’ of funds on good works”, published on 12 December 2015.  The article was also published online with the headline “One in five of Britain’s biggest charities spend less than 50 per cent on good works, new report claims”.

2. The article reported on research by the True and Fair Foundation which “found that one in five of the country’s biggest charities spent less than 50 percent of the cash raised for them on charitable activities”. It went on to explain that the figures were obtained by dividing each organisation’s spending on charitable activity by its total income. It included rebuttals to the research from the head of the Association of Chief Executives of Voluntary Organisations, and some of the charities named in the article.

3. The complainant said that the research the article reported on contained fundamental flaws, and that the article gave the misleading impression that money donated to charities is being wasted or misspent. He said that the article conflated a charity’s total income with the cash it received in donations. He said that in many charities, a large proportion of the total income will be derived from trading, and a significant proportion of the trading income will then be reinvested to cover trading costs, and will therefore not be recorded as charitable expenditure. By conflating donations with total income, the article gave a misleading impression. In addition, the complainant said that charities will sometimes receive higher donations in one particular year, which will then be spent over a period of years. Equally, charities may choose to save money in one year in order to spend larger amounts of money in future years. For this reason, the ratio of charitable expenditure to total income in one particular year may not accurately reflect the charity’s efficiency.

4. The newspaper said that the relative inaccessibility of the data makes it difficult for members of the public to form a view about the efficiency of charities.  It said that while the figures reported in the article were blunt and simplistic, it took the view that this was a newsworthy attempt to standardise performance of charities in a way that was meaningful for non-specialists. The newspaper said that the article made clear the methodology used by the report, and that readers understand that charities derive income from sources other than donations, including from extensive trading arms. It said that the article contained responses to the research from charities, which made clear that the figures on which the research was based had included commercial income. The newspaper said that in these circumstances, a reasonable reader would not understand the figures in the article to reflect the way that donations to charities were spent.  In addition, the newspaper said that research had averaged the total income and charitable expenditure figures over three years to minimise the effects of fluctuations.

5. The newspaper said that it published two letters in response to the article under complaint; a letter from the Association of Chief Executives of Voluntary Organisations, and a letter from six major charities. The letter from the six charities stated that many charities generate part of their income from trading activities, and there were costs relating to this.

Relevant Code Provisions

6. Clause 1 (Accuracy)

i) The Press must take care not to publish inaccurate, misleading or distorted information, including pictures.

ii) A significant inaccuracy, misleading statement or distortion once recognised must be corrected, promptly and with due prominence, and - where appropriate - an apology published. In cases involving the Regulator, prominence should be agreed with the Regulator in advance.

iii) The Press, whilst free to be partisan, must distinguish clearly between comment, conjecture and fact.

Mediated outcome

7. The complaint was not resolved through direct correspondence between the parties. IPSO therefore instigated an investigation into the matter.

8. The publication offered to amend the online article by replacing references to the total amount of money “raised” by charities, with the phrase “total income”, and including words to make clear that a charity’s total income may include profits of trading arms, charity shops and publications, in addition to public donations. It also offered to amend a reference to one charity as “the worst culprit”, to avoid the impression it was endorsing the criticisms made by the research. It removed comments from an individual criticising charities for the way they spend money “people generously give”. The newspaper invited the complainant to submit an article for consideration by the editor. It also offered to publish the following corrections in its Corrections and Clarifications column on page 2 of the print edition, and at the foot of the online article:

Print Correction

Charity spending

An article of 12 Dec (“1,000 charities ‘spent less than half’ of funds on good works”) reported on a True and Fair Foundation analysis that it said showed 1,000 charities spent less than 50 per cent of ‘cash raised by members of the public’ on good works. We wish to clarify that this proportion related to charities’ total income. This includes income from trading subsidiaries in addition to donations from the public. Some of the income attributable to these sources is necessary to cover the costs of trading and this can be a significant proportion of the total. When these trading costs are excluded, the proportion of charities’ expenditure on charitable objects is invariably significantly higher.

Online Correction

CORRECTION: An earlier version of this article said that the True and Fair Foundation report showed 1,000 charities spent less than half of 'the cash raised by members of the public' on good works. We wish to clarify that this proportion related to charities’ total income. This includes income from trading subsidiaries in addition to donations from the public. Some of the income attributable to these sources is necessary to cover the costs of trading and this can be a significant proportion of the total. When these trading costs are excluded, the proportion of charities’ expenditure on charitable objects is invariably significantly higher. The article has been amended accordingly.

9. The complainant said he would resolve his complaint on the basis of the amendments to the online article and the publication of the corrections.

10. As the complaint was successfully mediated, the Complaints Committee did not make a determination as to whether there had been any breach of the Code.

Date complaint received: 11/01/2016
Date complaint concluded by IPSO: 10/02/2016