All in a Good Cause Panorama

The hundreds of thousands of pounds they ended up losing. I'm not going

to change my support for amnesty because I think amnesty has done a

tremendous amount of work. I would be quite wrong, to me, to alter my

subscription or anything like that. I think they need a kick up the

backside to deal with it. The charity sector as a whole is having

to adapt to a very difficult economic climate, last year public

donations to charities fell by 20%. One charity has been very successful

at finding new sources of income. It beggars belief that kids are living

in poverty like this in the UK today. These kids need help. Save

the Children is well-known for powerful campaigning to improve the

lives of children in the UK and abroad. Most recently in Syria and

the Philippines. It has managed to keep its income steady. The charity

is nearly 100 years old and it benefits from strong support from

the British public. Put my finger in there, there is a bullet hole there.

Oh, yeah. This is Spencer Conway, he is a man who likes adventure. Last

year, he became the first person to solo circumnavigate Africa on a

motorbike. 35 different countries, 51,345 kilometers. It took me

nine-and-a-half months. I started in England. I went down the east coast.

He wasn't just doing it for the adventure. He raised ?34,000 for

Save the Children. Why did you choose Save the Children? Basically,

I have two children. I wouldn't like to see them in the position that

I've seen a lot of children in Africa. Last year, the charity

raised ?284 million. Including a grant of ?29 million from the

Government. Much of its income is received during disaster appeals.

Whilst large individual donations like Spencer's are of course

welcome, increasingly charities like Save the Children are also looking

elsewhere in order to grow their income. Dominic Nutt worked of Head

of News of Save the Children for two years and subsequently as a

consultant. The day of the little old lady making cakes and selling in

the village hall for charity is pretty much over. The small donor,

it costs more to process, it costs more to fundraise. The absolute

direct corporation philosophy of the organisation at the moment is to be

chasing the big cheques from the corps rates. In the last three

years, Save the Children's income from big corporations has gone up

five-fold, from ?3.9 million in 2009, to ?21 million this year. 8%

of total income. It's a huge increase. They have done very well,

certainly on paper. I think that does come at a potential cost,

certainly there is a risk involved in doing that. One of the architects

of this change is the charity's current CEO, in May he announced a

corporate partnership with GlaxoSmithKline. GSK develop and

market drugs that help millions around the world. Recently, they

announced new malaria vaccine. What is it in for GSK? They will be

detoxifying what would be a patchy brand in the past. It will make them

look good, put simply. GSK was a surprise to many as a Save the

Children partner, given some of their recent history. In 2001, AIDS

was killing millions of people in the developing world. Several

charities protested outside GSK's London headquarters about the

company's refusal to drop the price of its drugs that help prolong

lives. One of the protesters was Justin Forsyth who at the time

worked for Oxfam. GSK eventually did drop the price of its AIDS drugs,

since then it has continued to attract controversy. Last year, it

was fined $3 billion in America in part for promoting the use of adult

antidepressants to teenage sufferers.s. They did so knowing its

own research to show that it could cause self-harming and suicidal

thoughts. This is one of the biggest medical

scandals ever. Despite this, in May, Justin Forsyth

agreed a partnership with GSK that both sides say would give Save ?15

million over several years to combat infant death. Justin Forsyth

strongly defends this corporate partnership. There are risks but we

weigh those risks. The judgment we make is that guideline is a

transformed - GlaxoSmithKline is a transformed company. It is not only

a leader in the pharmaceutical sector, it is a leader of corporates

in the world. What do grassroots fund raisers

think of the deal? It makes me upset, actually. I would say,

morally, ethically, it's not really the right thing. What you'll end up

is holding court over the charity because they've given them a

donation, which I don't believe in. We've spoken to several former and

current staff at the charity who are deeply uneasy about the partnership.

Certainly, I've spoken to people currently at Save the Children, and

they feel uncomfortable account relationship. It is feasible to be

at least concerned that the Save the Children will never, ever be able to

criticise GSK because they've taken their money.

We had a big open forum on this and staff voiced their concerns. The

vast majority of our staff and supporters believe we're doing this

for the right reasons. We are going to work with them to transform a

mouthwash into a gel that will stop children dying from neo-natal

accepts cities. Their umbilical cord cut at birth with a tiery scalpel,

we can save millions of lives with harnessing that type of innovation

with GSK. Save the Children has many corporate partners. Its ten-year

relationship with British Gas ended in November 2012, and yield the the

charity 1.5 million, helping thousands of the poorest children in

Britain. But we've seen evidence that people

at the charity feared risking existing and potential corporate

partnerships if they criticised the energy industry.

Millions of British Gas customers are facing higher bills. Gas will go

up by an average of 18 per cent... It is 25 per cent of my household

budget. And it is the single largest payment we have. It is either heat

the house or feed ourselves. Energy energy price rises are a yearly

controversy. Dominic was keen to campaign on the issue when he worked

at the charity. Every year, I prepare a line on that, to go to the

media to criticise British Gas, that children living in poor families on

low incomes would have to make very difficult choices around buying

school books, feeding their children correctly, or putting the heating

on. Every year, it would be quashed. What do you mean by that, what

happened? It was a clear we can't do that because we take money from

British Gas. That would have come down from on high. Save the Children

did eventually run a actual poverty campaign in January 2012. It

criticised the big six energy suppliers. It singled out British

Gas as doing the most to help poor families.

We've been told by Dominic Nutt, who was a former head of news at Save

the Children that, on several occasions, he had press releases

spiked because they mentioned British Gas, and were critical of

British Gas. It is very difficult for me to answer. That's a couple of

years before I even started with Save the Children. We would never

decide not to campaign on something because of a corporate partnership.

We're quite explicit when we go into these corporate partnerships that we

won't muzzle our voice, we won't not speak out around the issues that

we're addressing in that corporate partnership. Corporate part they

areships are not just about money. Might it not be a good idea at the

end of a high-profile campaign document to say, you know, we've

mentioned British Gas to be pans partner about their relationship? I

think that is a good idea. We publish all our partnerships in our

annual report, but, actually, I think you're right. That's not a bad

idea to do that in the individual reports. But we found further

evidence which suggests self-censorship last year over

preparations for a potential fuel poverty campaign against the big six

energy companies, including EDF. Panorama has obtained an internal

e-mail sent from Save the Children's corporate partnership team pitching

to become EDF's charity partner. That would have earned Save the

Childre ?600,000 over three years. This e-mail reveals concern at the

potential negative publicity for EDF. It shows a fear that a actual

poverty campaign wouldn't go down well with EDF, who really want to

work with a positive organisation. This second internal e-mail sent

four days later indicates that the charity's director of advocacy felt

a actual poverty campaign could risk the EDF partnership. We've also seen

a third e-mail from the same time sharing concerns that the charity

would not run a actual poverty campaign in case it jeopardised a

potential partnership with EDF. That strikes me as being an insidious

reflection of the culture that I experienced. So, people are

beginning to edit themselves, and the culture has perk lated right

down, and no-one is now willing to challenge that culture.

These e-mails strongly suggest that a actual poverty campaign was

unilaterally abandoned for fear of jeopardising potential EDF money. In

the event, it didn't work out because the award which was decided

by an EDF staff vote went to another charity. What happened at Save the

Children was that being warm and friendly and non-challenging to

corporates became part of Save the Children's DNA. These e-mails

suggest to any reasonable person that Save the Children was

considering pulling its punches because of a possible corporate

tie-in? No, I don't accept. I mean, with this specific case, we were

never going to launch a campaign on energy prices. We had just launched

the biggest campaign in our history on UK child poverty, and it was much

more controversial than we expected. We looked at the pros and cons, and

different staff members argued what would be the best campaign, where

would we put our resources? Now, the campaign around energy prices at

that time didn't get to first base. Despite his concerns about some of

their corporate partnerships, expensor Conway is determined to

keep raising money for Save the to first base. Despite his concerns

about some of their corporate partnerships, expensor Conway is

determined to keep raising money for Save the Children. -- Spencer. I

think all charities have their problems but I am not the type of

person that would want to give up on a project just because there is

negatives. I would rather fulfil the project and try and get rid of the

negatives. Of course, running a big charity costs money, and it has to

come from somewhere. Save the Children says on its website that it

spends about 11 per cent of donations on fund-raising and on

overheads. But there is another massive charity that promises not to

spend any of the money you donate on its running costs, and that is a

charity that most of us have donated to.

You've got the money, we've got the funny. The amount of goodwill and

generosity in this country is absolutely staggering. 1,000,003

hundreds and 16,000. 13 million, 600!

Comic Relief has been running Red Knows day since 1985, and it has

raised nearly ?1 billion to tackle poverty and social injustice to

grants to many charities on the ground worldwide.

During the nose day broadcast, celebrities appeal for your money,

making the special promise, that every penny donated by the public

goes to good causes. Every penny goes straight to those

who need it. What it is is money that is going directly to help

people. Because we're going to spend all the cash you give us really

well. This year's Red Nose Day raised over

?100 million. The charity's latest accounts shows it employs nearly 300

people with a total running cost of ?17 million a year, of which ?13

million goes on the wages bill which has nearly doubled in four years.

How does it pay for all of that without taking any money from

donations? Andrew Goodwill is a Comic Relief donor and he wanted to

find out. Four years ago, he started looking in detail at their publicly

available accounts and their website. When you watch Comic

Relief, you will hear celebrities say time and time again every penny

you donate will go to good causes. That's true, isn't it? It is true,

but it's a misleading statement by the omission of the fact that they

have to raise these operating costs, so they invest. Fair enough, it does

say on the Comic Relief website that not all of the money is given out

immediately. It does, but who is going to find it on the website?

You've got a whole night of entertainment, and they can't even

find 20 seconds to tell you they invest it in the highest yield

possible so they can pay their operating costs.

We asked Comic Relief why their investment strategy is only on their

website, and why they don't explain during the Red Nose Day broadcasts

that some of the donated money will be invested for several years with

profits used to pay their operating costs? They told us:

Comic Relief's website and accounts show that the charity pays out the

money you donate to other charities, and that these payments are often

staged, sometimes over several years. That means at any one time,

Comic Relief holds tens of millions of pounds of investments in the

stock market. In 2009, Comic Relief was using

these managed funds, which invest the money on the charity's behalf

for the best return. Several of the funds publicly listed their main

investments, and Andrew saw that some Comic Relief money was invested

into questionable sectors like tobacco, alcohol, and arms. Comic

Relief told us that: This, they said, is "Accepted as the

most professional and safe way to make grants."

But do they have to invest in those questionable areas? The regulator of

the sector, the Charity Commission, does allow charities to exclude

certain types of investment if they fear it could alienate their

supporters, providing there is no significant financial risk. Many

other charities do invest in a way that involves some kind of ethical

screening. Helen WildSmith helps charities do

that. An ethical fund she mishas outshone Comic Relief's portfolio.

It makes it easy for charities to avoid the pitfalls and achieve the

financial returns they need. So ethically screening your funds is

not necessarily going to make you less money? It can definitely be a

win-win. The academic evidence says that well-diversified institutional

common investment funds will not underperform, and you're protecting

your reputation, and you're avoiding conflicting with your mission.

We've looked at the list of the top 20 best-known charities in the UK.

Overwhelmingly, they have investment policies aimed at avoiding conflicts

with their key overarching aims. Comic Relief stands out by saying

the use of screening for environmental or ethical purposes is

not practical. This means that some Comic Relief donations have been

invested in a way that seems to contradict the core aims of the

charity. Take young people and alcohol.

Comic Relief says it is working to reduce alcohol misuse and minimise

alcohol-related harm. There is a pregnant woman digging!

This year, it helped to launch a new counselling service for children

from families with alcohol problems. It just seemed all this to try and

then put some money into that we would do something about it. And But

through its investment and managed funds, in 2009, Comic Relief had

more than ?300,000 invested in shares in the alcohol industry. The

majority in Diageo. It manufactures dozens of alcoholic difference. In

the same year, Diageo was highlighted as exploiting

weaknesses. My hope is that through this specialist and targeted care,

these children will have the best possible start in life. Comic

Relief's funding partner in the treatment centre is the Royal

Foundation, a charity that does screen its investments for alcohol

manufacturers to avoid conflict with its charitable work. But this wasn't

the only area where Comic Relief's investments seemed to conflict with

its core mission. Here, you will find there is a long

list of all the different companies, funds that are invested in,

donations in. Aerospace and defence? So weapons? Yes. Don't forget

weapons manufacturers. Comic Relief's missi statement also

commitments to helping people affected by conflict, but in 2009,

through the managed funds, it had ?630,000 invested in shares in BAE

Systems, one of the world's leading weapons manufacturers. Arms

manufacturers are known for generating good profits and paying

things like pension funds high dividends. Com Relief isn't a

pension fund, so should profit be their only consideration. There is a

further issue: in 2009, the charity had even more money invested in

shares in another industry which appears to contradict its core aims,

and that is big tobacco. TB is a highly infectious airborne disease

that's rife in areas of poverty. It can be cured with antibiotics, yet

every day, it kills nearly 5,000 people. Comic Relief appeals for

money to fight tuberculosis. They've given ove ?300,000 to a charity

called Target Tuberculosis. Target TB believes smoking may be

responsible for over 20 per cent of TB cases worldwide. While raising

funds for this, nearly ?3 million of Comic Relief money was invested in

shares in three different tobacco companies in 2009. Over ?1 million

was invested in British American Tobacco shares, a company that's

come in for strong criticism from some well-known faces.

You haven't got the business of an investment. I am sorry, but I am

not. Investment dragon Duncan Bannatyne is a honorary trustee of

Comic Relief and is well-known for his financial nouse. In 2008, he

made this BBC documentary attacking British American Tobacco, accusing

them of targeting African children. I've come to Africa to look at a

very successful British business, not a business I would invest in.

Because its product, if used correctly, will kill up to half of

its customers. Cigarettes.

Excuse me, can I ask you why you have shares in the tobacco company?

Do you care about how many people you kill? By 2009, Duncan Bannatyne

was a full trustee of Comic Relief, at a time when it held investments

in these two managed funds. Both funds had publicly available facts

sheets making it easy to some of the Comic Relief money would have bought

shares in British American Tobacco. I asked him what he thinks of Comic

Relief's investments? Were you aware of those indirect investments?

Nobody can be aware of them, because when you put your money into a fund

and your fund deals in it, you can't know what the - it is called the

blind trust. Have a look at this. This is publicly available? Is it?

This is Artemis Fund and Invetco. Where would you put the money? I

wouldn't put donors' money in tobacco conditions. You made a -

This is really inappropriate. Very, very good documentary. But But you

can't sanction it from these fund? If I never have done. So you don't

agree with it? Of course I don't. Do you think they should invest

ethically and change their policy? I don't know about changing their

policy, they should not invest in tobacco companies, indredgingly as

you said a dozen times, it happens. If we can find a way of not doing it

indirectly, we will do it. Experts have told us that it can be done. We

found several ethical investment funds that screen out investments in

weapons, alcohol, and tobacco, which have outperformed Comic Relief's

portfolio for three years. There are specialist funds for charities that

align with all the things they're trying to achieve, protecting their

reputation, and achieving a return. Were you surprised that Comic Relief

might be investing in this way? They are risking their reputation, and

the charity's reputation is very precious. If people who have been

giving them money after watching the television next year think twice and

don't give that money because they're concerned about their

investment policy, then that could be argued to be a breach of

fiduciary duty. Comic Relief organiseses the Red

Nose Day broadcast every two years on the BBC, and through this unique

platform, the charity has maintained a direct and emotional relationship

with the British public. Do it, do it now! Don't wait! Give

what you can, because you are Comic Relief. You are the reason for it!

Charity Commission guidance says the charities should take donors' views

into account when making investment decisions. But Comic Relief won't

tell us if they've ever asked their donors what they think about how it

invests their money. This is the DK Dance Crewe. Last Red Nose Day they

raised hundreds of pounds for Comic Relief. We asked their views on what

the charity has done with some of the public's money. At any one time

Comic Relief can have tens of millions invested in the stock

market. They use something called "managed funds". What you like to

guess what kind of companies that these funds invest in They wouldn't

be anything that might go against the charity or what they are

striving to do. Where do you think they were indirectly investing up to

?3 million? Tobacco companies. Disgusting. Disgusting. How many of

you are surprised by that piece of information? A recent survey found

that 74 per cent of people agreed that large charities should adopt

ethical investment policies which prohibit investment in activities

that are contrary to their values. Comic Relief initially told us that

because of their relatively low rates of return, their higher risk

and lack of diversification, investing in ethically screened

funds isn't an option that's either legally available to Comic Relief,

practical or in the interests of its beneficiaries.

So why ask the regulator, the Charity Commission, whether ethical

investment is legally available to charities? The core obligation of

charities under charity law in the use of funds for investment is that

they invest for maximum financial return on charitable funds, but it

does allow for ethical investment policies. So if a charity says that

they have to get a maximum return, and therefore they're not using an

ethical investment policy, is that true? If a charity says we need to

invest for maximum financial return, that is right; if they go on to say

we therefore can't have an ethical investment policy, that's wrong.

Panorama's investigation into Comic Relief's investments is based on the

charity's accounts from 2007 to 2009. These accounts showed which

funds the charity was investing in. We would like to tell you what Comic

Relief is currently investing in, but since 2009, they've changed the

way they present their accounts, and it's not now impossible for the

public to know. All the funds were listed. You could quite easily find

out, it was all public domain information. Now they don't do that

any more. There is no transparency at all, really. A recent survey

showed 84 per cent of people agreed that charities should be fully

transparent about their investments. We've asked Comic Relief where it's

been investing your money since 2009, and whether any of it is in

shares in alcohol, arms, or tobacco companies? But the charity refuses

to tell us. They're saying to us it takes up too much space in the

trustees' report, and that it is too time-consuming to list the names of

the funds. They won't be in that many funds, and therefore they could

be listed in their report and accounts in the normal way. Quite

easily? Quite easily. From our point of view as a regulator, transparency

is a key consideration. The obligations are a bit stronger on

the larger charities than they are on the smaller charities. Any

charity, if it landed up beginning to lose crucial support because of

things it wasn't telling its supporters that they wanted to know

would soon need to reconsider it. As of this point, we don't exactly know

where Comic Relief's money is. What do you think of that? I think it's

wrong. It's wrong. It's almost like they won't admit that they are still

putting into these fund. Comic Relief, if they played it right,

could have more donations because if they turn round to everyone held

their hands up and said we are wrong, we're now going to screen to

make sure we do it ethically, people might jump on the bandwagon and say

now they are ethical charity. Comic Relief declined to be interviewed

for this programme. In a statement, they told us that their investment

strategy, which is consistently delivering strong returns, is kept

under constant review, and based on practical, legal, and moral

considerations. They also told us: "We put the money into large managed

funds as many other leading charities and pension funds do. On

balance, we believe this is the approach that will deliver the

greatest benefits to the most vulnerable people. Comic Relief has

received clear written assurances from the Charity Commission that our

investment policy is both appropriate for the broad range of

issues we support and within guidelines."

As a result of tonight's film, Comic Relief today admitted that it still

has funds invested in tobacco, arms, and alcohol companies, but announced

that it would be reviewing its investment policy.

For all the good work they do, the big charities are under more

scrutiny than ever before. The question is: how can they best meet

the expectations of the people who give them their money? The British

public will never want to stop giving. If they can be better

informed about where their money is going and there is better regulation

and more openness and transparency, then they can have confidence that

it is all in a good cause.