Bishop Hill Willie Hutton's fake charity
Jan 25, 2009 Fake charities I was looking at the accounts of the charity run by Will Hutton, the Work Foundation. I wanted to see if I could figure out just how much of their income was generated from the taxpayer, assuming of course that the answer was going to be "most of it" and I could then submit it to Fake Charities. Apart from a general impression that the answer is somewhere in the vicinity of "a very large proportion" I didn't get very far, but what I did find out was rather more interesting. Here's an extract from the Employees note to the accounts for 2007, which are the most recent available (the numbers in blue are my calculations, the rest is derived from the Foundation's accounts).
The Foundation has no less than seventeen people paid over £60k and it has five directors who are all paid over £100k by the looks of it. This looks to me like an awful lot of chiefs for an organisation which employs only 61 people. The Work Foundation studies the future of work amongst other things, and I can tell you that the future is looking pretty rosy, because Willy H is demonstrating loud and clear that in years to come, everyone is going to be a fat-cat.
And I can tell you also that just because there are going to be a lot of fat-cats doesn't mean that we are not all going to have the fat-cat salary to match. Between them, the chiefs at the Work Foundation manage to consume something of the order of £1.5 million of this charity's assets in salaries alone! The highest paid director (presumably Willie H himself, him being CEO) has had a pay rise of the order of 20% too! On top of that, there was £0.8m put in to the pension scheme in 2007 and £1.4m in 2006 and 2005.
Can the Foundation afford this largesse? Well, not entirely is the answer. In fact there was a cash outflow on their main operations of nearly £3 million in 2006 and another £2m million-odd in 2007. There was also a massive deficit on the pension fund: the deficit was £16m on a fund worth just £12m. This was caused, it seems, by automatically uplifting pension values by 5% a year ever year in the past. You would have thought that with all those directors, one of them might have pointed out that this was probably unsustainable. They finally put a stop to this bonanza in 2006.
With their, ahem, charitable activities haemorrhaging cash and their salaries and pensions troughs swallowing it at a prodigious rate too, they've had to take drastic action and have flogged off their swanky building on London's Carlton Terrace for £4m. They've also liquidated investments at a tremendous rate, with £1.6m going in 2007 and £3m in 2006.
But the really interesting take on this is when you work out how much of the Foundation's income is going on salaries and pensions. In cash terms it looks something like this:
I'm pretty staggered by this. The overwhelming impression is of the assets of the Foundation disappearing into the pockets of its employees.
Now someone wanting to defend this might point out that these are highly qualified people providing advice and research to public and private sector corporations. That's what they do - it's right there in the accounts. But when you think about it, if these people are genuinely doing this high powered consultancy and need to be paid accordingly then the Work Foundation is a business and needs to be structured and taxed accordingly.
Definitely a fake charity. But not for the usual reasons.
Bishop Hill
Just when you think there's nothing more to say, you stumble across some more amazing details. Follow-up post here.
Reader Comments (4)
I could see things working thus: Willie appears on the telly for a fee. Fee gets paid to the Work Foundation. Gift Aid boosts that fee by a pretty penny. Willie gets paid by the Work Foundation. All above board I'm sure.