Mo Farah right to shut down foundation, but the Sun has missed the point

Sometimes it's possible to be right, despite having faulty logic.

Those of a mathematical persuasion will know that it's wrong to cancel the 6s in this equation, but it does get the right answer, and like this equation the Sun has used faulty logic to get to the right conclusion with their criticism of Mo Farah's charitable foundation.


The Sun has suggested (perhaps implicitly) that Mo Farah Foundation's decision to shut down and let others take over the work was the right decision. In saying this, they are right.

However it is not valid to insinuate that spending "more on marketing and a glitzy ball than on helping kids in Africa" is a failing - in truth the accounts indicate the cost of "Horn of Africa" project appears to cost less than the fundraising ball, however the full cost of that project includes some overheads shown elsewhere in the accounts, and if you take this into account the true cost of helping kids in Africa is higher than the ball. Also it totally ignores the fact that MFF does work in the UK as well, as if that work doesn't count. More fundamentally though, it doesn't account for the possibility that an increase in fundraising spend this year may lead to an increase in spend next year - i.e. it's down to the effectiveness of fundraising (a point I'll return to)

The Sun also criticised the quality of the work done in Africa, indicating that in-country charity partners have criticised MFF's work, although MFF indicated that they had received contrary indications, so it is hard to know the truth of this.

So here are some *good* reasons to think that the closure of the MFF was the right decision

• Scale efficiencies
• Return on investment/ability to leverage brand
• Strategic clarity

Scale efficiencies
Of the MFF's total spend on £405k in the last financial year, of which an estimated 24% was spent on management and admin staff costs and 10% on rent and other admin costs. It is a common mistake for donors to object to these costs, as if spending money on admin somehow counts as embezzlement, whereas in truth these costs are typically necessary and important. Furthermore people sometimes argue that an admin expense ratio is too high based on comparisons with the rest of the charity sector without taking into account the specificities of the charity in question. In this case, it does appear that the 34% of spend on admin could be achieved more efficiently if the charity's operations were carried out within a larger charity with existing infrastructure.

Return on investment from fundraising
The Guardian article on this indicates that "What the Sun didn’t report was that the ball generated £108,000 of income, a surplus of £26,000 to be spent on charitable activities in the future." However even this comment betrays an only superficial understanding of how charity fundraising works. The aim of such a ball is not only to make a profit on the night, but also get more people engaged and build a set of supporters, so the real return may well come from people who attended that event being more likely to contribute to future campaigns, and hence it's shortsighted to just look at the income generated by that event alone. This means that the success of the event is hard to measure, but perhaps one measure which is less prone to that shortsightedness is to look at the total funds raised divided by the total spend on fundraising, which in MFF's case comes to 2.5 times the amount invested in (note that even this measure also has many flaws). On this basis the charity appears to be behind industry averages, which are closer to 4 times. In many ways the main justification for the existence of the MFF is the ability to leverage the Mo Farah brand to produce a high return on fundraising investment. If it seems that this isn't happening, then it suggests that a main reason for the charity's existence has been nullified.

Strategic clarity
MFF's activities largely fall into two broad categories: aid (including health and education) in the horn of Africa and encouraging sport in the UK (e.g. in Hounslow). These two activities have essentially nothing in common apart from the fact that Mo Farah likes them both. Including both activities within the same organisation and under the same management team is hard to justify strategically, and would be better effected by Mo Farah being a philanthropist who donates to two separate charities, and using his support of those charities to leverage further donations to them.



--------------------------Some relevant links--------------------------------

http://www.thesun.co.uk/sol/homepage/news/7181968/Mo-Farah-shuts-charity-after-it-spent-more-on-parties-and-marketing-than-helping-African-kids.html
http://www.theguardian.com/voluntary-sector-network/2016/jun/01/mo-farah-foundation-close-charity
http://apps.charitycommission.gov.uk/Accounts/Ends19/0001143619_AC_20150331_E_C.pdf