Photo: iStock
Photo: iStock

The business of charity

Do you know how the money you donate for social activities is spent? I didn't. Now that I do, I'm circumspect

Earlier last week, a bunch of three young people knocked on my door—two boys and a girl—who I assumed were college-going kids. They looked impeccable and made an equally impeccable pitch. They told me they live in my neighbourhood and that this year, instead of indulging in the debauchery that accompanies New Year celebrations, they intend to do something different. Which is why they were at my door.

“There are many neglected senior citizens in our country," they started. And they represented an NGO that works to provide care, rehabilitation and urgent medical attention. I decline to name the NGO concerned in this piece for reasons I will articulate later. The young men and woman were seeking funds to support the NGO and asked me if I was willing to make a contribution. Their intent came across as genuine, I invited them in, and asked them what kind of money were they looking at.

Their first response was that it was entirely up to me. That said, they pulled out a leaflet that suggested various denominations I could donate to fund different causes the NGO is engaged in. I looked at the leaflet and said I don’t have the money muscle at this point to fund causes running over a year.

Their pitch then got subtly more aggressive. “How about writing out a cheque for Rs7,500" for a year? asked the young man leading the pack. “And why?" I asked him. He gave me some spiel, the details of which now escape me, on how it will go towards funding a senior citizen’s life. And that in the overall scheme of things, it works out to “just Rs20 per day for you. Surely sir, you can afford to pay Rs20 every day for a good cause."

I politely declined and said I have Rs2,000 to offer. They refused to give up. “Can you up that to Rs2,400 please?"

“And why?" I asked.

“Because that can fund two cataract surgeries," they said.

I declined, pulled my chequebook out, and signed off on Rs2,000.

Even as I was writing it, something compelled me to ask them what college they go to. “We are not students. We work for the Appco Group," one of them said. I hadn’t heard of the company and let it pass. They wrote me a receipt that I may claim income tax exemptions on, their contact number, looked despondent, and made a hasty exit.

Soon after they left home, my brother, who was a witness to the proceedings, started to laugh. “You ought not to have entertained them in the first place," he said. “Chuna lagaya tere ko (They just hoodwinked you)," he drawled in the earthy Mumbaikar-Hindi both of us speak to each other in.

“What you do mean?" I asked him.

“You ought to have asked them what are their administrative costs and how much of the money you actually give them go the NGO you intended it for," he said.

I thought he was being nitpicky. He insisted though that in his experience as a doctor who spent a large part of his career practising in the US, these are standard questions they are trained to ask. And that he doesn’t bother to entertain pretty much anybody who knocks at his door claiming to represent an NGO.

He made sense. To put it mildly, I felt like shit and quickly looked up the Appco Group. As things turn out, it is part of a larger entity called the Cobra Group of Companies, both of which are sales and marketing companies. Their activities include:

• customer acquisition

• sports marketing

• home delivery

• aviation recruitment and training

• management consultancy

• home efficiency

• fund-raising services

• health and beauty

• home services

• mobile device protection and enhanced banking solutions

• start-up investment and business incubation

• high-performance race car design, development, manufacture and support

• software development

• point of sale technology

As for the Indian arm of the Appco Group, their clients include charities, insurance companies, banks that offer credit cards and direct-to-home (DTH) operators.

Some more digging later on various online forums, I figured the kids who visited my place weren’t direct employees of the Appco Group, but a direct selling agency (DSA) to whom Appco had outsourced their fund-raising activities for the NGO. This DSA operates out of a place close to where I live, not a savoury location to work out of.

Online research revealed the group keeps a percentage of the funds raised for the entities it represents. The exact percentage was unclear.

Phone calls placed to the company’s listed number asking that I be connected to a spokesperson reached a dead end.

I was hoping to get these numbers from the NGO in whose name I had written the cheque out. Questions I sent to the CEO and the marketing head of the NGO soliciting answers to the nature of funding, the amount of money they spend on fund-raising activities and audited accounts went unanswered.

Documents available in the public domain indicate they spend in the region of 25% of all funds collected on administrative activities—including salaries and fund raising.

Apparently, this isn’t out of whack with industry standards. There are entities that spend a significantly higher proportion of funds on these activities. (And that ought to be viewed with suspicion.) What got my goat in this case though was the lack of transparency and, even more so, that my questions to the NGO remain unanswered.

I promptly called my bank up and asked that the cheque I issued be blocked.

That brings me back to the beginning. Why am I not naming the NGO here? Not for anything else, but because I know the people who run the entity and those who advise it have their hearts in the right place. Their intent is noble and they have nothing to gain, and much to give.

My only concern is whether they know how the money that come to fund their activities is raised. And for that one reason alone, going forward, I intend to check the antecedents of the charity I choose to support. You should do too.

Charles Assisi is co-founder and director of Founding Fuel Publishing.

His Twitter handle is @c_assisi

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