Sometimes on a Saturday when I do some catching up in the office I get a bit peckish! Recently we have had a charity sweet box – the thinking is you do something bad (eat sweets) whilst doing something good (giving to charity). A sort of lose:win.
I have often put a pound in the box – the sweets have to be carefully chosen – the chocolate isn’t real, the foam stuff is just that – so I have to rummage for something decent. But needs must!
Then I noticed in the week that this charity donation I give might not be quite what it seems. My pound doesn’t reach Mencap. Half of the profit reaches them. You have to read the back of the pack to work out how much from the pack reaches the Charity. But this isn’t entirely clear…
The back of the pack tells you that they expect to give ‘at least £20k per annum’ to the charity. Not entirely transparent then? Why can’t they tell me they give 5p / 20p or 50p to the charity? I guess it is because the figure is low?
There is no data on the Companies web site.
I think I’ll go healthy and eat salad – and drop a pound into a charity box next time.
I thing the charity box is a very good idea. Even if some of your money had got through to Mencap, you would be contributing to high management costs. The last CEO got a rise from £75k to £95k, well above the sector average…though behind the Royal Opera guy at over £205k. I would advise all givers to have a look at the Guardian listing of chief exec salaries before handing over your money….
Nick
Nick, I think this is a real issue for Charities – making sure that the money you give goes to the cause not lining the pockets of a CEO. But the sweets thing just adds to this – I wonder how much from my pound actually helps a person at the end of the chain after the sweet company and the administrators have dipped their bread?
Hi Tim,
You should be able to find out via the Charities Commission to whom charities report and who monitor these things. It is a strange quirk that privately organised charity fund-raisers often raise more proportionately than those organised by the charities themselves. For example, if you enter the Race for Life none of your entry fee goes to cancer research it all goes to event costs (although the event raises colossal amounts via sponsorship and merchandising) . Yet the London Marathon sees about 8% of entry fee going to charity. It varies and is always worth checking.
Thanks Jim, I think that anything with ‘charity’ on it should have to be transparent about what actually goes to the charity – rather than be hidden in vague statements?
Couldn’t agree more Tim – but in the meantime…..
Hi Tim, I am the person who started the company that manufactures and distributes the Charity Sweet brand and would like to explain the concept and history behind the company, it is a little long winded so I apologise in advance.
The idea for placing sweet boxes within businesses had been with me for some time and in 2001 I left my position on the board of what is now Virgin Media to start this confectionery company, investing £60,000 secured against my home in plant and machinery.
From our manufacturing plant in the West Midlands we pack two ranges of confectionery brands.
Our first brand is our Hummingbird range, these are non-charity related and sold to Newsagents, Garden Centres and other retail outlets, mainly in the Midlands area. The retailer acquires the stock at around 65% of the RRP of £1.00, making them a 35% margin (this is about the norm in the confectionery industry)
In 2002 we launched our Charity Sweet range of sweets and snacks. The concept was to miss out the retailer and place our sweet display boxes in business premises to provide the staff with a tasty and convenient onsite vending service.
Because we bypass the retailer we are able to retain their 35% margin and even after the wages and fuel costs of the Sales Merchandisers there is still a sizeable saving.
Around half of this saving, less the cost of bags that are taken without payment, is passed on to Mencap.
The fact that the savings are passed on to Mencap is the reason why the principals and Directors give us permission to leave our box and hence the reason for the name of the brand.
Of course we hope our customers also value the fact that we provide a regular snack vending service for their staff at no cost.
The key to our business is that we offer good value for money, in our boxes this week we have 100g bags of Miniature Twix for £1.00, this compares to a 55g Twix bar now costing 65p or £1.20 per 100g.
I always ask our customers not to get our product confused with fund raising items such as the little pink ribbons or pin badges displayed in bank foyers etc., these really are about making a donation because there is little cost or value in the actual product.
Tim, again I apologise for this being a little long winded but I felt it was right to explain our concept.
Here is the breakdown of our costs.
From a starting point of £1.00 we have to deduct 17p for VAT, leaving a net £83p
Product cost is 42p; this includes the sweets, packaging and bagging.
Leaving 41p
The Sales Collector cost is 22p including wages and fuel cost (average wage is £7.00 per hour)
Leaving 19p per bag gross profit, shortages are then taken in account and this can vary depending on area.
In March 2011 we agreed to change the way we paid Mencap and now pay a guaranteed fixed Royalty payment of £75,000 plus VAT for the period of the agreement. This method enables Mencap to budget more efficiently and we feel it makes it clearer to the consumer. (I know the bag currently states a minimum of £20 per annum, we will update this but it cost us £300 to make amendments to the artwork each time).
We are extremely proud that since 2001 we have donated over £300,000 to good causes and created employment for over 50 people.
Bob Strong
Managing Director
Sweet Causes Limited
Hi Bob, thanks for taking the time to explain the pricing and the fact that you are donating a significant amount to Mencap. My issue with some of the promotions is the lack of transparency. You will see form my blog that I have concerns when there seems to be spin involved. But I accept that you are not skimming profits. I have left your explanation in full. Best wishes – and well done for this concept! Tim
So if you reach your 75k you keep the entire amount of any extra sweets sold after that? The box we have just taken could not have a penny go to Mencap? Or have I got this wrong.
With regards to the cost of changing your artwork. That is of no relevance. If you change your t&c’s they should be clearly stated. Or you are miss selling. You can’t say you are doing one thing and then do another. That’s just wrong.
Fair play for raising 300k. But how much profit have you made from the charitable donations in that same period?
Bruce.
Hi Bob,
To make this totally transparent, wouldn’t it be a good idea to provide full rather that abbreviated accounts at Companies House? Charities do and I personally believe companies using a sole marketing tool that effectively has a mission of raising money for charity should do the same. In fact register as a charity and all becomes clear. In your breakdown, which is certainly more than would be revealed through published accounts, you suggest Gross Profit of 19p and I would say a fixed/variable cost of at least another 10p leaving possibly 5p for the charity. I’m an Accountant and I don’t really have a problem with this given I understand margins. What I do have a problem with is people believing they’re giving much more than this and coerced into spending money without being given the facts to make an informed judgement. There certainly should be a way in which this can be done more transparently.
i have just read an article in the sun newspaper where a so called registered charity was found to be corrupt only a trickle of the money donated went to where it should and a spokeswoman for the investigating committee said this could be just the tip of the iceberg it just helps prove what i always suspected that you are nothing but a bunch frauds who should be thoroughly investigated
with regard to the above comment mencap and the rest of you watch out
I went for an interview at sweet causes and what a dump it was. With a very rich boss. Makes you wander
Hi Guys, I also run a charity sweet business up here in Yorkshire. I can completely understand Bob’s position, and know charities prefer a fixed licensing payment, rather than a cut of profits sometimes. Just last week I went into a site (hotel in York) to fill up our charity vending machine and was accosted by the manager and told I was ripping the charity off by making a 10p donation from every sale. He has two charity sweet boxes on his counter and they both claim to pay over ”50% of net profit to the charity”, unfortunately the guy didn’t seem to grasp the fact that ”net profit” could be 2p per sale if the director takes his salary into account when working out yearly profit.
This is why charities have now started asking for a guaranteed payment, rather than a cut of profits. Just think of it as your purchase is helping that company make a profit which then benefits the charity by £75k a year.
No one does things for nothing, and if the charities want the money the arrangement has to let the company make money.
bobs got his figures wrong on this blogs says 36p on his website says 42p
Jed, that has made the whole matter clearer then! The whole tenet of my first blog was how unclear all of this was! Thanks for commenting!
I am confused why Bob Strong’s breakdown is made when he is then saying a fixed payment of £75,000 per term is made. He has also forgotten to mention how long a term is. If he is right in the fact that charities have received £300,000 over a period that has been longer than 10 years, then that would average less than £30,000 per year.
It is a good idea but products are poor quality and think they donate 15p I found out somewhere. Also not healthy and would rather have salad or buy a daffodil pin or something. Most of our office staff are considerably growing in weight and overall I do not believe this is good. If feeling generous make the donation but would not advise eating this stuff
I have worked for bob and i can say he is a very nice guy,the charitys are happy with the arrangement its a no brainer for them,me as an ex distributor was happy doing the job,he offers a great service to both charity and worker and the distributor and of course he makes money he’s a business man.