London's charity palaces
The Salvation Army HQ puts most corporate offices to shame. Its glass shell sparkles onto St Pauls Cathedral in one direction, the Thames and Tate Modern in the other. It sits in one of the most expensive parts of the most expensive city in the world.London is full of charity HQs like it.
Smart businesses that want to save money seek out more modest rents. Microsoft, for example, goes for cheap business parks in bland towns around the world (apologies to Reading). Microsoft is rarely found in a capital city.
Oxfam recently adopted the same logic, relocating from its buildings in Oxford to a nearby business park. It reckoned it will save £500,000 a year as a result. More to spend on beneficiaries, presumably.
How many millions (from our donations) would other charities release if they did the same?
posted by David Pitchford @ 3:00 pm
11 Comments:
According to some magazine this week (Third Sector?), Oxfam moving out has actually massively assisted the regeneration of the area of Oxford where it used to be...so a lovely social outcome to what was (presumably) a financially-led move.
It stinks. Try getting a job at a major charity when they're mostly in London. What a waste of supporters money for a very small number of potential benefits.
It's a pity that you were not better informed before making this comment.
The Salvation Army has owned this property for over 120 years. By entering into a leasing arrangement with a commercial developer, it now occupies rather less than half the original footprint of the building. The Army therefore has not only released City office space on a long-term lease but has had the construction of its new building paid for while continuing to receive a major contribution towards its running costs from the lease agreement.
Furthermore, the present headquarters staff is the smallest in a century and staffing expenses are kept to a minimum commensurate with the efficient operation of its international operations.
Finally, be assured that no donor money, other than that gifted specifically for this purpose, is used to maintain the International Headquarters of The Salvation Army in its traditional location on Queen Victori Street.
Thank you for the swift response. It seems an impressive deal but would it be too mean-spirited of donors to ask how much more you'd save if you sold that very expensive space and moved to, say, Leeds? That would test the commitment of the staff, would it not.
Then again, bearing in mind the previous comment, I wonder what broader range of talent you might attract in a less expensive part of the country.
As for the tradition argument, it doesn't wash for this donor. It's not about the Salvation Army, it's about the Salvation Army's beneficiaries I believe. Or am I being hopelessly naive?
But as I made clear, the Salvation Army is not the only one. A search for 'charity' in EC1 (central London - not cheap) generates long lists of charities, and they won't all be getting their rent for free. Among them are The Prince's Trust, Cancer BACUP, Medecins Sans Frontieres, The Rainforest Foundation, HOPE Worldwide. See for yourself.
I'm torn. Obviously charities should always ensure that every penny of donor's money is used properly, but couldn't that mean staying in London? What would they stand to lose by moving out of London?
Let's face it, the UK is highly London-centric, it has a population greater than the whole of Scotland, meaning there's a high bank of people right there to contribute as staff, volunteers and donors. The average income is higher in London (admittedly costs are too), and London has more of the highest earners in the UK than anywhere else.
If charities are operating across the UK, then one of the cheapest and easiest places to get their staff to for necessary meetings is... London
I don't have, and I can't think where to find cold hard figures to support my theory that moving head offices out of London would cost more than keeping them. It's just a gut feeling.
Having said that, charities should of course ensure that their offices in the Capital are not too expensive, not too ostentatious and are cost effective.
Michael, I'm not sure about that. If your charity is all about London, it makes sense to be in London. But if you're national, you're actually tucked into a far corner of the country. Birmingham would make much more sense. The Charity Commission, interestingly, has a small space in London and much bigger centres in Devon and Liverpool.
It might be tucked into a far corner of the country, but pick four locations to travel from to any single destination, and the cheapest destination will be London.
Microsoft can't be compared with a charity. Microsoft are such that if people want to find them, they'll go to them, imagine if a charity operated like that. "It's great that you're considering giving us £1million, please come to our offices in Milton Keynes/Liverpool/the outskirts of Manchester so we can talk things over"
A charity needs to be active in finding its donors, especially the high value ones, and there are simply more of them in London. The top staff will need to be working in London, and so they might as well be based there. If they are going to be based there, why not save money by basing everyone there?
There's a certain catch 22 issue here. You say, "I wonder what broader range of talent you might attract in a less expensive part of the country." The problem is, it's not just about talent, but also about experience.
As long as the bulk of charities are based in London, then the bulk of people who have experience of working in charities will also be based there. A major charity making the decision to move to Leeds (for example) would have to take into account that there will be a much smaller pool of experienced staff to draw on there. They will have additional training costs, and may have to accept that their income will fall until the less-experienced fundraisers that they are forced to recruit are able to build up their skills.
Of course, once one major charity has made that move, it becomes easier for the next charity wanting to move there, because they may be able to recruit some staff from the first charity that went there. The third charity has it easier still, and gradually a pool of experience is built up, and all the charities benefit from the lower costs. But there's a major disincentive to being the first to make that move.
Oxfam has long wanted to move from the ramshackle 60's offices in scattered over a several blocks in North Oxford. They were hardly posh palaces. Regeneration probably means the relatively low-paid and thrifty Oxfam staff shopping in the area can be replaced by a more upmarket demographic.
It is expensive in time and money to move. When most charities have less than 12 month operating expenses in reserve, it is hard to justify that. The Charity Commission, the Big Lottery and DIFID don't face that probem when they decide to decentralise.
Charities usually begin where their founders lived years ago. Often that's London. The only charity I know that has made a real move is Action Aid which moved the headquarters to South Africa.
We are near Southampton and it is hard to recruit an experienced fundraiser. Living costs equal London's so it is hard to convince someone to move.
In the latest 'third sector':
Christian Aid is moving the management of its overseas regional operations from London HQ to the regions themselves...in order to make decisions closer to the ground....the process is expected to take 1 to 2 years. They "do not expect to make immediate savings because of the costs involved, but part of the rason is to reduce the rate at which costs grow"
It's possible now since the infrastructure and people with necessary management skills are now available.
I suspect that the savings won't come from office costs, but from travel costs.
Just wanted to come back to you on a follow-up comment you made to the original posting, where you namecheck quite a few charities in EC1 postal district in London, including the one where I work, Cancerbackup. (We're actually in EC2, but no matter.) However, the building we occupy there is owned by us, as a result of a generous bequest by our founder's family after her death. Nor is our building one that could ever remotely be described as a 'palace' - and I happen to know that the same is true of several others on your list.
So we are not all in the same boat, or to be more precise, we are not all in the same luxuriant surroundings as the one which appears in your photograph.
There are of course many good reasons why maintaining a presence in London does make good sense for a charity (or for a business) which aren't given any consideration in your original posting. Every time we want to meet with Department of Health officials, every time we want to stage a meeting with other charities, every time we want to invite service users to come to a conference to help shape our policy and services in a location with the best transport links from across the UK, every time we are asked to supply a spokesperson to BBC or Sky 'in the next sixty minutes', every time we want to meet with MPs.... - where does it make sense for us to be to carry out all these activities most cost-effectively?
Having worked for various charities for over a decade, I am surprised by the widespread assumption that charities don't think carefully about their costs and how to minimise them. We do, all the time. Yes, you will find admin cost horror stories surfacing from time to time, some of them appear elsewhere on this site. But as a sector, we are far less culpable of waste and inefficiency than, eg, the public sector, MPs, MEPs, and even parts of the private sector. You single out for praise the Charity Commission on the grounds that it has only a small office in London, along with larger sites in Liverpool and Devon (it's Somerset, actually, but again no matter). Doubtless on another day on another blog column, I could find someone criticising charities for occupying multiple sites when it would be more cost-effective to bring everyone together under one roof.
The broad thrust of most current criticism of charities comes from two camps. One is to say, why can't charities be more like businesses (as, eg, your comment about Microsoft). But I'll wager that Microsoft's HQ premises and most of its satellite sites will rival or surpass the Salvation Army's for sleek glass and chrome and state-of-the-art design. The other is to say why can't charities be more 'hair-shirt'/'frugal'/'true to their roots'. So we are being asked to be more commercial, more professional, more managerial - while cutting our costs. Well, clearly, we aren't going to please all of the people all of the time.
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