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Speaker: KidsCan comes back

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  • Russell Brown,

    Thanks, Rick.

    But nothing about the Howlett Trust?

    Auckland • Since Nov 2006 • 22830 posts Report Reply

  • Craig Wearne,

    And.....boom shuker
    I am not about to disect Rick Shera's figures, mainly because I don't really give a toss. Maybe Rick can be allowed to get back to running the charity and continue to do something while the rest of us sit back and pat ourselves on the back for donating $20.
    It is being called to account all the time that makes our government agencies so inefficient and creates a need for organisations like kids can. Lets not send them down the same path.

    I would guess ( no figures to back it up, just rambling) that no government depart deliveries that sort of service ratio for it's funding.

    Mt Maunganui • Since Sep 2008 • 6 posts Report Reply

  • Steve Curtis,

    There are so many loopholes in this that you could drive a truck through, just a few for starters..

    .. 85 cents in every dollar donated by the 'general public'.
    So all the corporate donations dont count ?
    So what was the total they are referring to from the general public.?

    and
    ...All of the wages of KidsCan staff ..
    There are wages... and salaries and commissions and so on. Come on, by being too specific they hope we dont notice

    This is quite a piece of work , designed to mislead, by an expensive spin doctor

    Auckland • Since Nov 2006 • 314 posts Report Reply

  • Kyle Matthews,

    Thanks for posting that Rick. I thought most of it was fair. This however I'd take exception with:

    KidsCan Income

    Total income $1,953,056
    Less income tagged or not contributed for programmes ($770,901)
    Equals income available for programmes (Y) $1,182,155

    Programme delivery

    Cost of programmes as shown in accounts $357,289
    Plus in kind support $760,000 (approximate, some not included)
    Equals total programme delivery (X) $1,117,289

    X/Y= 94.5%

    If you're going to include the 'in kind' support, which seems fair enough, you have to include the 'income tagged or not contributed for programmes'. While that income might not be directly supporting the programmes, you couldn't provide the programmes without that expenditure - wages, rent, computers, phones etc.

    A much better representation of the output of your charity would be:

    Total programme delivery/Total expenditure of Charity.

    Which is 57.2%.

    Since Nov 2006 • 6243 posts Report Reply

  • Eddie Clark,

    Steve, I don't really have a dog in this fight, but your last sentence is not fair and, it seems to me, baseless:

    - how do you know Mr Shera is an "expensive spin doctor"? My understanding is that he's an unpaid chair. And one can't throw the derisive term "spin doctor" at someone simply because they are a a lawyer?
    - what basis do you have for disputing the statement that KidsCan is run to accepted, and in many cases best, practice? The Trust's accounts have been professionally audited and, unless Mr Shera is being outright untruthful, its approach has been endorsed by the Fundraising institute.

    Wellington • Since Nov 2006 • 273 posts Report Reply

  • Russell Brown,

    This is quite a piece of work , designed to mislead, by an expensive spin doctor

    Both wrong and very unfair.

    Whatever you think of the trust or Rick's account of its operation, bear in mind that Rick is an unpaid volunteer as chair.

    He has nonetheless fronted repeatedly over the past couple of weeks, and spent his own time (away from hs family and his law business) compiling this reply. He emailed it to me at 5.57am this morning.

    Auckland • Since Nov 2006 • 22830 posts Report Reply

  • Steve Curtis,

    So Mr Shera is an early riser means its all OK.

    If some cant see spin in such comments as 'high protein low sugar' muesli bars ? Since they use standard branded merchandise Ive yet to see one muesli bar that isnt 25% sugar and the average is 33%

    This is very circumspect as well... 85 cents in every dollar donated by the general public during Big Night In Telethon will be 'available' for programme delivery.

    Not 'spend' or 'allocated' ' but 'available'. The spin being that 85 % of money raised by telethon will be going on their programmes.

    In virtually every metric the choice of words gives a far better impression than is actually the case

    Auckland • Since Nov 2006 • 314 posts Report Reply

  • Russell Brown,

    Not 'spend' or 'allocated' ' but 'available'. The spin being that 85 % of money raised by telethon will be going on their programmes.

    In virtually every metric the choice of words gives a far better impression than is actually the case

    Which is fine and fair comment.

    The point was that it was inaccurate and unfair to describe Rick Shera as an "expensive spin doctor".

    Auckland • Since Nov 2006 • 22830 posts Report Reply

  • Richard Kyle,

    "If you're going to include the 'in kind' support, which seems fair enough" ...

    Quite often in-kind isn't counted or used in this way as the value of in-kind is subjective.

    Thanks Rick ..for responding, engaging and most of all volunteering

    Wellington • Since Nov 2006 • 19 posts Report Reply

  • Glenn Pearce,

    I'm interested is this "tagging" of donations for admin purposes only.

    If I'm reading this correctly you have donors who have given $770k to the charity and specifically said "but don't spend it on the kids"

    Also the numbers don't seem to add up $331, 187 + $34,550 = $770,901 ? Or I may have missed something there, should that second figure be $334,550

    Auckland • Since Feb 2007 • 504 posts Report Reply

  • Russell Brown,

    Also the numbers don't seem to add up $331, 187 + $34,550 = $770,901 ? Or I may have missed something there, should that second figure be $334,550

    I wondered that too, but I'd rather wait for word from the author before changing it.

    Auckland • Since Nov 2006 • 22830 posts Report Reply

  • Russell Brown,

    I do think Rick breezes through the fact of the events not actually raising a lot of money once costs came out.

    I'm not completely sure that everyone knew that was how the events worked, and I'm relieved that the trust has moved on from the focus on events.

    Anecdotally, it seems that KidsCan blew everyone else out of the water by running the most expensive, fancy events -- which helped it get more All Blacks and other celebrities along than the competition. But it seems to me that these events end up serving celebrities more than anyone else. "Social entrepreneurship" is a somewhat flattering term for the activity.

    I tend to agree with Kyle's point too.

    Auckland • Since Nov 2006 • 22830 posts Report Reply

  • Simon Pound,

    Hi Rick

    Thanks for responding Rick - -lots of words there and carefully selected examples - -but there are some basic questions unanswered - -The Howlett trust money go-round is fascinating and unaddressed- and by running Ltd Liability companies I can't understand how that makes it more transparent.
    Surely if we could see the financials of how they operated we would know more than we do if you don't provide them and say that they are incorporated into the overall picture. This tells us less, not more.

    The total salary renumeration for the people running it is very important - no matter how many times you guys say it isn't. People want to have confidence that this isn't a rort or put together to help the people in charge more then anyone else. People can't make decisions about this without the numbers.

    Do charity balls really operate on the assumption that only a minute proportion of the ticket cost goes to the charity?

    And if you could just tell us what the raincoats cost, for example, we could work out how much of the $35 donation you ask for per raincoat actually goes to the raincoat cost.

    MFAK • Since Nov 2006 • 20 posts Report Reply

  • Kyle Matthews,

    If I'm reading this correctly you have donors who have given $770k to the charity and specifically said "but don't spend it on the kids"

    It'd be the other way around.

    You'd apply to some grant organisation or whatever for "1 administrative staff member for X time", or "2 computers" or whatever. Then you can, like Rick has done, present donations from the public as being more able to go to the cause.

    The money can then only be spent on what you apply for. The funding organisation will require receipts to match what you applied for.

    So I presume that money is driven by KidsCan applications to sponsors and grant organisations.

    Since Nov 2006 • 6243 posts Report Reply

  • Rachel Prosser,

    Thank Rick - there's a lot of information there.

    Also, good on you for taking on a voluntary role in a charitable trust. It isn't easy - there's a lot of accountability which goes with it (and that all takes time). Grant funders want copies and evidence and that all takes away from the time spent doing the stuff you set up the trust to do.

    It's easy to be critical from the sidelines, harder to be the one taking risks and doing it. Mistakes get made, things are tried which don't always work, and at the end of it, any benefit you do get from it (by way of salary or other access) risks being criticised regardless.

    I'd still be interested in hearing the Doug Howlett stuff. WhenI first heard of Kidscan, my impression was that it was Doug Howlett and Ali William's personal charitable trust, not the other way around.

    Russell, it would be good to get someone from the Charity Commission or Society of Accountants to comment on accounting procedures for "in-kind"stuff. I suspect there's more than one way of measuring, each of which can be fair, but yield wildly different results.

    Christchurch • Since Mar 2008 • 228 posts Report Reply

  • J Debreceny,

    Congrats to Rick for participating in the discussion. It's not often that someone takes the risk of joining in a debate like this.

    I suspect Kids Can works at a very different level from many community groups, and that its staff are probably better paid than many in the community sector.

    I don't necessarily see that as a problem. Should we condemn an organisation because its staff are paid a reasonable amount? Of course I'd hope that the staff costs are 'reasonable', but I don't have the assumption that charity staff should only work for the love of it.

    I'd rather that more community organisations could afford to pay more. That way we'd have less burn out, and more people staying in the sector.

    Wellington • Since Aug 2009 • 2 posts Report Reply

  • Elizabeth Sanderson,

    Careful anaylsis of Ricks comments leaves me with more questions than answers. For example - what about the Howlett Foundation? Doug's comments suggest that it was Julie and Karl who ran the Foundation. That being the case how do they explain knowingly taking approx $40,000 in salaries and only raising $28,000? Then taking a further $9,000 in rent (also paid to Kids Can). Also, to whom was the $6,000 in salaries paid by Invitation Only Events paid to - Julie? Karl? What happened to the $62,00 paid by Kids Can to the DHF? What was this for and where did the money go? How many other incomes are Julie and Karl receiving? How much are they being paid at Kids Can? I note with concern the many fundraising events the charity have and are runninng (events) which are high cost, demand high staff resources and return minimal income. We the public expect charities to make wise, prudent decisions about their fundraising activities always with an eye of returning a good profit. Looking at the figures offered by Rick don't seem to stack up either. Not being a numbers person myself I look forward to reading other contributors thoughts on this. I appreciate Rick taking the time to respond but I can't help but feeling a great deal of disquiet about Julie and her husband, and what else may be going on the we don't know about. Maybe the wise thing to do is invite the Kids Can Foundation to review their Board with a view of removing certain individuals (Julie and Karl) to clear the way for someone who has stronger understanding of how to run a business and no complicated double or triples incomes from sources which are yet to be explained adequaltely. That way the Kids Can Foundation can move forward and put all this business behind them.

    Auckalnd • Since Aug 2009 • 14 posts Report Reply

  • Elizabeth Sanderson,

    Something else I noted too. Rick was at pains to repreatedy make reference to certain costs which "are not intended for programme delivery" such as grants received for administration costs, when evaluating the percentage returned to the children. The thing is this. Every other charity in NZ has the ability (and do) apply for these same administration grants (which are a good idea as is getting in kind support). BUT!!! Many other charities are able to successfully keep their total costs (including admin grants) to an acceptable level and still deliver a good percentage return for services! Nor do they take the position of 'you should not include these costs when evaluating our percentage returned to services'. I am afraid that this position is a red herring. Certain things all charities have in common, and applying for admin grants and getting in kind support is one of them (indeed it is recommended). If other charities do not 'exclude' certain costs like admin grants when evaluating percentage return to services, then neither should Kids Can. Nor do other charities say 'oh but you also have to add in kind donations of blah blah when looking at our figures.' Other charities can "stand tall' purely on the merit of their audited annual accounts (which do include grants and don't include in kind donations). Kids Can's percentage return for services should be judged in exactly the same way all other charities (that like Kids Can deliver direct services as opposed to giving away money) are judged. By the way the majority of charities in NZ fall into the category of being direct service delivery providers from the funds they raise. So, back to square one. Evaulating Kids Can using the same standards other service delivery providing charities are judged (including those which do not receive government funding of which is the majority) still leaves Kidscan in the position of returning an extremely poor performance in all 4 years of its existence.

    Auckalnd • Since Aug 2009 • 14 posts Report Reply

  • Martin Roberts,

    The number I consider most important is the ratio of impact to donated resources. The actual cash movements are secondary - only drug smugglers and terrorists start charities with the primary purpose of moving money around.

    There seems to be a growing discussion in the charity sector on quantifying impacts. Rick provided some data here in terms of 28,000 kids receiving a nominal $370 of goods. It gets harder to quantify the impact of these goods -- in terms of pride, increased schooling access, etc -- and even harder to size the consequential change to the children's downstream impact on society.

    On the 'amount donated' side I would include admin grants. It would also be nice to factor in unpaid (or underpaid) work. Should gifts in kind be booked at cost, wholesale, or retail?

    I am about to move into a paid support role with a charity (i.e. become an admin cost) and find this conversation fascinating. Thank you, Rick, for your extended response which demonstrates many ways in which this data can be represented. I hope in due course to contribute towards making such information available, in the expectation that robust comparison and analysis will end in greater confidence for donors.

    (On a more personal note, it is somewhat daunting to ask whether my contribution will so improve systems that my new organisation could bring in 10 times my salary in donations.)

    Auckland • Since Nov 2006 • 93 posts Report Reply

  • Martin Roberts,

    I do think Rick breezes through the fact of the events not actually raising a lot of money once costs came out.

    I'm not completely sure that everyone knew that was how the events worked, and I'm relieved that the trust has moved on from the focus on events.

    Other countries have well established distinctions between the portion that covers costs and the portion that is a donation. Many tickets for charity events directly indicate the breakdown. I think that this would be a useful concept to nurture in NZ.

    Auckland • Since Nov 2006 • 93 posts Report Reply

  • Elizabeth Sanderson,

    Something else as well... When adding the in kind donations to the level of services delivered to the children, you should compare apples with apples. How can we the public ever know whether or not the $760,000 worth of inkind donations Kidscan claimed was received for the programmes includes ONLY those items that directly support the programmes without an itemised list of what is included in the $760,000? I am not suggesting Rick is lying about the amount - rather - unless we see an itemised list, this amount could include all sorts of inkind support received by Kidscan that may or may not have anything directly to do with supporting the programmes e.g.: prizes for a charity auction. Apples with apples? What exactly did Kid Can include in the amounts listed in their 2008 accounts for programme costs and what does Kidscan include (specifically) in the claimed $760,000 amount? Interestingly one of the possible consequences of the light Julie and Karl's actions have brought onto Kidscan and the charity sector as a whole, is that we may see in future charities trying to "include" as many possible costs under the heading of "programmes" to make the books look better....

    Auckalnd • Since Aug 2009 • 14 posts Report Reply

  • Elizabeth Sanderson,

    Hi Rick - well done. You nailed it. I was trying to get my head around Rick's 'interpretation' of income vs expenditure with not much success. Facts are (as you pointed out) you cannot separate the convenient income from the inconvenient income, nor can you separate the convenient costs e.g.: programme costs from the inconvenient costs e.g.: wages, event costs etc. Every other charity in NZ (and business for that matter) understands this and doesn't try to put a more attractive interpretation on their figures. It is all or nothing. Either you run a charity on a reasonable cost basis (taking in ALL costs llike every other charity in NZ does) or you shouldn't be running a charity at all. I've lived in a few places around NZ over the years and have never heard any other charity try to "interpret" their figures like Kids Can have. Interestingly it's a shame Kids Can isn't a public company with shareholders. Imagine how awesome the dividends would be if they only used convenient income and costs to determine the companies performance and subsequent payout? LOL!

    Auckalnd • Since Aug 2009 • 14 posts Report Reply

  • Cartwright Family Trust Cartwright Family Trust,

    Good afternoon Russell, thank you for your very informative website. Each year my family support 3 charities by giving away the interest earned from our families perpetual investment fund. This year we decided to give 3 charities $10,000 each. However, in light of what I have read here, our own subsequent scutiny of the Kidscan's financial statements listed on the Charities Commission website and lack of confidence in Mr Shera's response, my family and I have decided not to go ahead with the donation to Kidscan (although we initially decided we would when we met at the beginning of August). We have now have awarded the $10,000 to a different charity after checking their financials first and comparing income to expenses. Suffice to say their audited accounts showed they have given more than 80% of the income raised to the program they run, every year for the past 10 years. A lesson learned. Yours sincerely Mrs Cartwright.

    NZ • Since Aug 2009 • 1 posts Report Reply

  • Elizabeth Sanderson,

    re: Doug Howlett Foundation. Does anyone know what happeneded to the $2,800 paid for the website? If Doug is living overseas and Julie and Karl are no longer working for the Doug Howlett Foundation then where did this money go? Is the website underconstruction? What if any work has been done on it to date? Also if Julie and Karl are no longer working for the Foundation does that also mean they are no longer Directors of the Doug Howlett Foundation?

    Auckalnd • Since Aug 2009 • 14 posts Report Reply

  • Elizabeth Sanderson,

    So in summary I interpret Rick's comments as being "if you ignore our inconvenient costs like wages, costs of events etc, it turns our charities poor performance (20%), into great performance (94.5%). Awesome - using this approach means that there is no such thing as an underperforming charity anymore - all you have to do is ignore every single cost except for those of the program :) That being said, I guess the Epilepsy Foundation using an external fundraising agency that raised $2.8 million of which only $70,000 was given to Epilepsy after telemarketing costs, is no longer a problem. To use the Kids Can example, if we ignore the costs not directly associated with delivery of Epilepsy support services we can change the picture from only 2.5% of the raised funds going to services, to - what - something around 94.5% (like Kids Can?)

    Auckalnd • Since Aug 2009 • 14 posts Report Reply

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