The Guardian - charitable giving

Donors may feel uneasy that charity bosses earn a lot. But well-meaning volunteers simply couldn't do the job

Even in the City, there is now a certain awareness about showy braces; a Debenhams trouser historian has traced the decline of these accessories to the financial crash of 2008, with a current shift to more muted tones. In a more sensitive age, bankers are trying not to resemble Gordon Gekko, or – in a painful image that some of us still struggle to suppress – a younger Andrew Neil . "The message they send out is clear," said the expert, of the grey suspenders trend. "It is one of trust, caution and a highly conservative approach for handling money."

It is all the more unfortunate, given this culture of restraint, that Sir Nick Young, the chief executive of the British Red Cross and the best-remunerated figure in the Telegraph's cash-for-charity-leaders story, should have been pictured in loud braces: which send an enduring message of greed, recklessness and a highly unorthodox approach to handling money.

Actually, Young may have learned his lesson: readers' comments earlier last week beneath a Guardian report illustrated by a photograph of the Red Cross chief executive, included: "He looks more like a CO [sic] of a hedge fund … Give to charity NEVER."

Plainly, Young's next mission must be the acquisition of the dressed-down, slightly crumpled wardrobe recommended for privileged people on philanthropic errands: one thinks of Prince Harry's desert boots in Jamaica, Madonna's flowing scarves for Malawi.

Could Young not, even in his London base, channel a more misery-friendly vibe, along the lines, say, of the chief executive of the Donkey Sanctuary, David Cook, in his modest sports jacket and slacks? After all, nobody appears to have objected this last week that Mr Cook also earns six figures, for his comparatively niche work, with distressed quadrupeds. "The financial squeeze is being felt here," says the sanctuary website. "Can you spare £2 for the donkeys?"

When even an over-prosperous appearance causes resentment, Sir Stephen Bubb, who runs the Association of Chief Executives of Voluntary Organisations, was probably ill-advised to claim of their salaries, on Radio 4: "This simply isn't an issue for donors. They are more concerned about the outcomes, the performance and the efficiency of these organisations." Any little people who were not thereby reminded of their total incuriosity were further invited by Sir Stephen to consider, in emulation of the feeble patter from banks and the BBC, the dreadful consequences if charities did not appeal, via competitive remuneration, to some of the richest people in the world. Do we want to live in a world where a Bob Diamond or Graham Norton would have to take a pay cut to run Battersea Dogs and Cats Home?

The only positive thing chief executives could really take away from Bubb's performance was that, at least, their champion was not asked about paying trustees, of which he is in favour, or about his Bubb's Blog – "the inside track of a third sector leader influencing in (sic) Whitehall" – in which he demonstrates that wrenching concern for the unfortunate need be no enemy to epicureanism. "The vineyard was, as all vineyards are in my experience, wonderful," noted the third sector's answer to Charles Pooter, on a recent working trip. With its round of fish dinners and splendid lunches, trips "to the Opera at Glyndebourne (The Marriage of Figaro)", and any number of rustic hostelries ("my room looked out over the churchyard"), Bubb's Blog could have been designed to reassure the charitable world's army of desperate interns that one day, and in this world, not the next, their privations will be rewarded. When it comes to reassuring the public about charitable probity, after a story that has united Telegraph and Guardian readers in disgust, not so much.

As for the charity leaders, you could see their collective reluctance, over the last few days, to correct public misconceptions about their sector and its massive bureaucracies, one-third financed by the state, as more culpable, even, than a display of ostentatious braces only inches from a Red Cross flag. Or is it impossible to explain that an able chief executive could be as useful to a charity, in alleviating human misery, as a nurse?

That donors might prefer, along with the Telegraph, that the chiefs of Oxfam and Save the Children should earn less than many London head teachers (up to £112,000) or a GPs (average £104,000) or, of course, a Godfrey Bloom (£182,826) to say nothing of middle-ranking BBC suits, senior civil servants, university provosts, NHS executives and the legions of consultants on secondment to government departments, is no excuse for preserving the myth that the leadership of gigantic charities could be delegated, almost entirely, to people willing to work for nothing.

If, understandably, it sticks in poorly paid donors' craws that more than 119,000 people would have to give a pound to pay Oxfam's chief executive to run its £385.5m budget (assuming none of it came from government), how many multiples of the national average wage, of £26,500, would it be decent to extract from collecting tins, in exchange for gifted leadership? Two? Three? Or should the whole outfit be reduced to the point that it is potentially manageable, on such days as they can turn up, by amateurs, of the noble type Cameron liked to conjure up during his Big Society moment?

Some donors, though equally concerned about their contributions, might still prefer direction and campaigning by experienced, accountable staff, to an administration in which some great and good artiste in the throes of reputation management presides over a host of randomly available volunteers, perhaps with some experience of promoting feudalism in National Trust sculleries.

Intriguingly, given his position and salary, pro rata, of £130,000, William Shawcross, the royal biographer and chair of the Charity Commission, has contributed to popular mistrust, telling the Daily Telegraph: "Disproportionate salaries risk bringing organisations and the wider charitable world into disrepute." Of course, anyone who has read his delirious descriptions of lunch parties given by another charitable luminary, the late Queen Mother, will appreciate Shawcross has fairly flexible definitions of "disproportionate" and "disrepute", where public funds are involved. "The food was good, the cocktails were mixed and the wine was poured with generous aplomb by uniformed stewards," he wrote of her entertainments, conceding that her style was not uniformly popular "in the more egalitarian times at the end of the 20th century". Maybe he, too, has the excuse for his own stipend of an irrepressibly Edwardian disposition?

With his implied rebuke to those running organisations massively more complex than his own, Shawcross endorses a peculiarly British beadiness about wealth, in which it is widely accepted that, say, footballers, Ecclestones, lawyers, and financiers who cheat and speculate, should take home obscene multiples of the average wage, but expected of the well-intentioned that they renounce material aspirations. For charity leaders, like sheep farmers, librarians and – to purists – MPs, virtue should be largely its own reward. It would also be appreciated, you gather, if these charity workers would have the decency to look a bit poor.

• Charities
• Charitable giving
• Voluntary sector

As one fundraising website is suspended, we look at how the key players operate and whether all your money gets through

Millions of people generously pledge money online, sponsoring friends and colleagues to complete a sporting event for a charity. But how safe is the cash and how sure can donors be that their money will reach the charity?

Last week one online service, Charitygiving.co.uk, was suspended, with an estimated £250,000 of charitable donations missing, raising concerns for anyone who has donated via a fundraising website.

The Charity Commission, the independent regulator of charities in England and Wales, suspended the CharityGiving site after an inquiry into the registered charity that runs it, the Dove Trust. "It appears there is an estimated £250,000 shortfall between the funds CharityGiving holds and what it owes to charities," said a Charity Commission spokesperson.

Approximately 7,000 people have been raising funds for charities via the portal but the commission, which has appointed an interim manager to investigate, has yet to establish which charities and donors are affected.

Donors and charities can contact the interim manager, Pesh Framjee of accountants Crowe Clark Whitehill, on 0207 842 7313 – or email DoveTrustInterimManager@crowecw.co.uk.

This is the first such scandal in the online fundraising sector – where individuals have, until now, generally assumed their donations are safe. CharityGiving is a tiny player in a market dominated by large, established portals including the world's largest platform for charitable giving JustGiving and not-for-profit platforms run by financial services company Virgin Money and telecoms giant BT.

CharityGiving is also unusual in being run by a registered charity; hence the involvement of the Charity Commission as regulator. There is no dedicated regulator of fundraising platforms run by non-charities.

Aiming to put the suspension of CharityGiving into context, Michelle Russell, head of investigations and enforcement at the Charity Commission, said: "Our concerns are limited to the Dove Trust and the CharityGiving portal, and this should not undermine public confidence in online giving."

The big players in the online fundraising sector were last week keenly reassuring donors and fundraisers shaken by the demise of CharityGiving.

JustGiving chief executive Zarine Kharas said: "The news that charitygiving.co.uk has closed should remind charities and donors to ensure they are giving through a route which separates out, and ring-fences, all donations from the provider itself.

"What has happened could not happen with us because every gross donation made via JustGiving goes into a separate trust account and is passed on to the relevant charity within three days of the donation being made. So if JustGiving were ever to go bust, all donations would be protected."

When it comes to Virgin and BT, many will rely on the power of the brand name. A spokesperson for Virgin Money Giving, said: "We have access to the support, infrastructure and financial services expertise of the Virgin Money group to ensure that our service is both reliable and secure.

"The board of directors includes external members to substantiate governance and all donations that come to Virgin Money Giving are held in a ring-fenced trust account and passed in full to charities on a weekly basis."

Gross donations paid in to BT MyDonate, also go straight into a trust account and are passed on to charities on a weekly basis via a BACS transfer, while the gift aid it collects gets passed on within a month.

But security is not the only factor donors and fundraisers should be aware of.

There are also differences in how much each of the websites charges charities for their service and, hence, how much of donors' donations plus gift aid actually gets passed on.

When Guardian Money compared the main providers, we found that BT's service is the best way for charities to receive the most from donations.

The biggest player in the sector, channelling £1.5bn to over 13,000 charities since its launch in 2001, JustGiving is a private company that recorded profits of £1.4m in 2011.

In the UK, where it reclaims an extra 25% on donations via the gift aid scheme, it charges charities £15 a month plus a fee of between 2% and 5% (volume discounts apply) on every donation. Card transaction fees of 1.3% are also deducted.

"We hand over 100% of each donation made to the relevant charity within days. We then reclaim the gift aid, which can take weeks, and take our fee out of that before passing it on to the charity," a spokesperson says.

On a £10 donation plus £2.50 gift aid, a charity charged 2% commission will get £12.17 after deduction of 20p commission and 13p card transaction fee, while a charity charged 5% commission will get £11.87 after deduction of 50p commission and 13p card fee.

With more than 6,500 charities registered, Virgin Money Giving has delivered more than £200m to charity since it was established in 2009. As a not-for-profit operation, it says it charges "just enough to cover our running costs when operating at scale".

Charities pay a one-off set-up fee of £100+VAT and are charged 2% of donations. A card processing fee is also deducted; 1.45% applies to all credit and debit cards except American Express, which is 1.6%. The processing fee for PayPal is also 1.6%.

On a £10 donation with £2.50 gift aid added, the charity will get £12.15 after deduction of 20p in commission and a 15p card processing fee.

Launched in 2011 as part of BT's "better future" corporate responsibility programme, the company bears all the costs of providing the not-for-profit service so that charities pay no fees and get 100% of donations, with gift aid if applicable.

The only fees deducted are charges levied by the donor's own credit/debit card company; a 15p flat rate fee for a debit card transaction of any size or a 1.3% credit card charge.

On a £10 donation with £2.50 gift aid added, the charity will get £12.35, with a 15p debit card deduction or £12.37 with a 13p credit card deduction.

BT claims: "Your chosen charity will receive up to 50p more for every £10 donated (excluding gift aid) through MyDonate when compared with other online fundraising services."

• Charitable giving
• Consumer affairs
• Charities

As one fundraising website is suspended, we look at how the key players operate and whether all your money gets through

Millions of people generously pledge money online, sponsoring friends and colleagues to complete a sporting event for a charity. But how safe is the cash and how sure can donors be that their money will reach the charity?

Last week one online service, Charitygiving.co.uk, was suspended, with an estimated £250,000 of charitable donations missing, raising concerns for anyone who has donated via a fundraising website.

The Charity Commission, the independent regulator of charities in England and Wales, suspended the CharityGiving site after an inquiry into the registered charity that runs it, the Dove Trust. "It appears there is an estimated £250,000 shortfall between the funds CharityGiving holds and what it owes to charities," said a Charity Commission spokesperson.

Approximately 7,000 people have been raising funds for charities via the portal but the commission, which has appointed an interim manager to investigate, has yet to establish which charities and donors are affected.

Donors and charities can contact the interim manager, Pesh Framjee of accountants Crowe Clark Whitehill, on 0207 842 7313 – or email DoveTrustInterimManager@crowecw.co.uk.

This is the first such scandal in the online fundraising sector – where individuals have, until now, generally assumed their donations are safe. CharityGiving is a tiny player in a market dominated by large, established portals including the world's largest platform for charitable giving JustGiving and not-for-profit platforms run by financial services company Virgin Money and telecoms giant BT.

CharityGiving is also unusual in being run by a registered charity; hence the involvement of the Charity Commission as regulator. There is no dedicated regulator of fundraising platforms run by non-charities.

Aiming to put the suspension of CharityGiving into context, Michelle Russell, head of investigations and enforcement at the Charity Commission, said: "Our concerns are limited to the Dove Trust and the CharityGiving portal, and this should not undermine public confidence in online giving."

The big players in the online fundraising sector were last week keenly reassuring donors and fundraisers shaken by the demise of CharityGiving.

JustGiving chief executive Zarine Kharas said: "The news that charitygiving.co.uk has closed should remind charities and donors to ensure they are giving through a route which separates out, and ring-fences, all donations from the provider itself.

"What has happened could not happen with us because every gross donation made via JustGiving goes into a separate trust account and is passed on to the relevant charity within three days of the donation being made. So if JustGiving were ever to go bust, all donations would be protected."

When it comes to Virgin and BT, many will rely on the power of the brand name. A spokesperson for Virgin Money Giving, said: "We have access to the support, infrastructure and financial services expertise of the Virgin Money group to ensure that our service is both reliable and secure.

"The board of directors includes external members to substantiate governance and all donations that come to Virgin Money Giving are held in a ring-fenced trust account and passed in full to charities on a weekly basis."

Gross donations paid in to BT MyDonate, also go straight into a trust account and are passed on to charities on a weekly basis via a BACS transfer, while the gift aid it collects gets passed on within a month.

But security is not the only factor donors and fundraisers should be aware of.

There are also differences in how much each of the websites charges charities for their service and, hence, how much of donors' donations plus gift aid actually gets passed on.

When Guardian Money compared the main providers, we found that BT's service is the best way for charities to receive the most from donations.

The biggest player in the sector, channelling £1.5bn to over 13,000 charities since its launch in 2001, JustGiving is a private company that recorded profits of £1.4m in 2011.

In the UK, where it reclaims an extra 25% on donations via the gift aid scheme, it charges charities £15 a month plus a fee of between 2% and 5% (volume discounts apply) on every donation. Card transaction fees of 1.3% are also deducted.

"We hand over 100% of each donation made to the relevant charity within days. We then reclaim the gift aid, which can take weeks, and take our fee out of that before passing it on to the charity," a spokesperson says.

On a £10 donation plus £2.50 gift aid, a charity charged 2% commission will get £12.17 after deduction of 20p commission and 13p card transaction fee, while a charity charged 5% commission will get £11.87 after deduction of 50p commission and 13p card fee.

With more than 6,500 charities registered, Virgin Money Giving has delivered more than £200m to charity since it was established in 2009. As a not-for-profit operation, it says it charges "just enough to cover our running costs when operating at scale".

Charities pay a one-off set-up fee of £100+VAT and are charged 2% of donations. A card processing fee is also deducted; 1.45% applies to all credit and debit cards except American Express, which is 1.6%. The processing fee for PayPal is also 1.6%.

On a £10 donation with £2.50 gift aid added, the charity will get £12.15 after deduction of 20p in commission and a 15p card processing fee.

Launched in 2011 as part of BT's "better future" corporate responsibility programme, the company bears all the costs of providing the not-for-profit service so that charities pay no fees and get 100% of donations, with gift aid if applicable.

The only fees deducted are charges levied by the donor's own credit/debit card company; a 15p flat rate fee for a debit card transaction of any size or a 1.3% credit card charge.

On a £10 donation with £2.50 gift aid added, the charity will get £12.35, with a 15p debit card deduction or £12.37 with a 13p credit card deduction.

BT claims: "Your chosen charity will receive up to 50p more for every £10 donated (excluding gift aid) through MyDonate when compared with other online fundraising services."

• Charitable giving
• Consumer affairs
• Charities

From Raphael to Picasso, our heritage is being squandered by a rich elite who would rather sell paintings than save them

According to the Tate chairman Lord Browne, Britain can give itself half a pat on the back. We are the eighth most generous nation in the world in terms of charitable donations, according to the world giving index. However, we are some way behind Americans and Australians.

Browne gave a speech last night calling for a new approach to philanthropic support for the arts. But he would not have had to make it if there were no problem with charitable giving to the arts in Britain. The average British charity donation per head is 0.5% of income. That percentage, in Browne's words, is "relatively flat across the income scale, which is a sign that philanthropy is widespread." But, as he gently hinted – and as I am about to put in far starker terms – there is another way to read that information.

That flatness means the rich in Britain give on average the same proportion of their wealth to charity that those on lower incomes do – which actually makes them impressively stingy. Our middle classes may be "decent", as Browne claimed, but our millionaires are mean: if charitable giving in Britain were compulsory, it would on these figures be a flat tax.

In the arts, this is becoming a problem. Lord Browne put it carefully and in the language of consensus, obviously hoping to persuade, but the fact is that museums and galleries are increasingly desperate for big donations from society's richest.

Fat chance.

When Picasso's painting Child with a Dove went on the market recently, the custodians of culture hoped for a super-generous white knight to come along – and were crushingly disappointed. No one stepped in, and the painting was sold abroad. Lord Inglewood told the BBC: "While steps are being taken to increase philanthropy in this country, this suggests they may not be enough."

Why are the rich in Britain so lacking in public spirit? In fact, to talk of philanthropy may be missing the point. When it comes to art, our elite are more interested in making money than giving it. Why did the nation have to buy Titian's two great masterpieces from the Duke of Sutherland? Because otherwise he was going to sell them abroad. Similarly, Picasso's masterpiece was sold by its aristocratic owners, the Aberconway family.

Last year, I got stung myself by the aristocracy. I went to Chatsworth in Derbyshire to write in praise of a new gallery created by the Duke of Devonshire for his famous collection of old master drawings. I assumed this was some sort of public-spirited act. But there was more going on. Last December, a Raphael drawing from the duke's collection sold for nearly £30m. The Duke claims the sale will help run Chatsworth and fund its art. But that's a Raphael, casually sold off.

Philanthropy? Before getting the rich to subsidise our art heritage, we need to stop them profiting from it.

• Painting
• Art
• The art market
• Pablo Picasso
• Raphael
• Titian
• Heritage
• Charitable giving
• Consumer affairs
• Philanthropy

From Raphael to Picasso, our heritage is being squandered by a rich elite who would rather sell paintings than save them

According to the Tate chairman Lord Browne, Britain can give itself half a pat on the back. We are the eighth most generous nation in the world in terms of charitable donations, according to the world giving index. However, we are some way behind Americans and Australians.

Browne gave a speech last night calling for a new approach to philanthropic support for the arts. But he would not have had to make it if there were no problem with charitable giving to the arts in Britain. The average British charity donation per head is 0.5% of income. That percentage, in Browne's words, is "relatively flat across the income scale, which is a sign that philanthropy is widespread." But, as he gently hinted – and as I am about to put in far starker terms – there is another way to read that information.

That flatness means the rich in Britain give on average the same proportion of their wealth to charity that those on lower incomes do – which actually makes them impressively stingy. Our middle classes may be "decent", as Browne claimed, but our millionaires are mean: if charitable giving in Britain were compulsory, it would on these figures be a flat tax.

In the arts, this is becoming a problem. Lord Browne put it carefully and in the language of consensus, obviously hoping to persuade, but the fact is that museums and galleries are increasingly desperate for big donations from society's richest.

Fat chance.

When Picasso's painting Child with a Dove went on the market recently, the custodians of culture hoped for a super-generous white knight to come along – and were crushingly disappointed. No one stepped in, and the painting was sold abroad. Lord Inglewood told the BBC: "While steps are being taken to increase philanthropy in this country, this suggests they may not be enough."

Why are the rich in Britain so lacking in public spirit? In fact, to talk of philanthropy may be missing the point. When it comes to art, our elite are more interested in making money than giving it. Why did the nation have to buy Titian's two great masterpieces from the Duke of Sutherland? Because otherwise he was going to sell them abroad. Similarly, Picasso's masterpiece was sold by its aristocratic owners, the Aberconway family.

Last year, I got stung myself by the aristocracy. I went to Chatsworth in Derbyshire to write in praise of a new gallery created by the Duke of Devonshire for his famous collection of old master drawings. I assumed this was some sort of public-spirited act. But there was more going on. Last December, a Raphael drawing from the duke's collection sold for nearly £30m. The Duke claims the sale will help run Chatsworth and fund its art. But that's a Raphael, casually sold off.

Philanthropy? Before getting the rich to subsidise our art heritage, we need to stop them profiting from it.

• Painting
• Art
• The art market
• Pablo Picasso
• Raphael
• Titian
• Heritage
• Charitable giving
• Consumer affairs
• Philanthropy

Not only does the public not appreciate be accosted by strangers asking for money in the street, 'chugging' ignores the fact that most of us give in many other ways

An important point not mentioned in your article on the problems with 'chugging' is the simple fact that there are a lot more people living on or below the bread line as the economic squeeze continues with no end in sight.

I must admit that I personally dislike this form of fundraising and consider it to be one of the worst ways to raise awareness for any charity, the only one worse than this is the 'knock on the door' at teatime with the same 'guilt trip' message hammered home by the young person in the charity shirt.

What many of these charities using guilt and bully tactics overlook is what happens during the course of an average day for some of us – I'll use myself as an example. I buy goods that support growers and farmers from the local shops to support local business; my change goes into the charity tin on the counter or to the quiet folk simply standing with a tin at the doorway. I will pay for someone to pack my goods to support a local charity and sponsor friends and family doing things to raise money for good causes. All of this is done whilst juggling bills and day to day expenses, just to get by. Then I am accosted by someone with a clipboard demanding my bank details, while saying to me: "But it's only X amount per month..."

It is ironic that even some of the larger charities have not learned anything from the TV, where huge fundraising happens every year. Those campaigns entertain, educates and make people laugh and cry, and they raise millions in a matter of hours. It works because it does not simply expect you to put your hand in your pocket or give your bank details. It works because it engages you without the bully tactics. I am not saying that this is the perfect way to fundraise, as I know there have been scandals, but to me it is far better than accosting strangers in the street.

Peter Dean

Partner and web design consultant at Debayne Web Design

Views and reviews is a weekly space to share the correspondence we get from our readers and also for our members to tell us what global development books you are reading. Sign up here to become a member

• Fundraising
• Charities
• Charitable giving
• Aid

Not only does the public not appreciate be accosted by strangers asking for money in the street, 'chugging' ignores the fact that most of us give in many other ways

An important point not mentioned in your article on the problems with 'chugging' is the simple fact that there are a lot more people living on or below the bread line as the economic squeeze continues with no end in sight.

I must admit that I personally dislike this form of fundraising and consider it to be one of the worst ways to raise awareness for any charity, the only one worse than this is the 'knock on the door' at teatime with the same 'guilt trip' message hammered home by the young person in the charity shirt.

What many of these charities using guilt and bully tactics overlook is what happens during the course of an average day for some of us – I'll use myself as an example. I buy goods that support growers and farmers from the local shops to support local business; my change goes into the charity tin on the counter or to the quiet folk simply standing with a tin at the doorway. I will pay for someone to pack my goods to support a local charity and sponsor friends and family doing things to raise money for good causes. All of this is done whilst juggling bills and day to day expenses, just to get by. Then I am accosted by someone with a clipboard demanding my bank details, while saying to me: "But it's only X amount per month..."

It is ironic that even some of the larger charities have not learned anything from the TV, where huge fundraising happens every year. Those campaigns entertain, educates and make people laugh and cry, and they raise millions in a matter of hours. It works because it does not simply expect you to put your hand in your pocket or give your bank details. It works because it engages you without the bully tactics. I am not saying that this is the perfect way to fundraise, as I know there have been scandals, but to me it is far better than accosting strangers in the street.

Peter Dean

Partner and web design consultant at Debayne Web Design

Views and reviews is a weekly space to share the correspondence we get from our readers and also for our members to tell us what global development books you are reading. Sign up here to become a member

• Fundraising
• Charities
• Charitable giving
• Aid

Chugging – street fundraising – turns members of the public into prey, releasing adrenalin that triggers fight or flight instincts. It'll take a little more imagination to create behaviour change

It's a beautiful day and as I walk down a busy street, I'm feeling good. I'm in control. But then I get the feeling that I'm being watched, that I've been caught in a predator's gaze. Looking around, I see her – a chugger. I begin to weigh up my options (walk faster; pretend to be on the phone; find another way across) when the worst thing possible happens. We make eye contact. Now confrontation is inevitable, as are the lies I must invariably tell to get out of this situation:

"Sorry, do you have two minutes?"

"No", I answer.

Her senses are sharp and she can tell I am uncertain, so presses on: "Have you heard of Unicef?," she asks.

"Yes".

She flips open her folder and an African child's eyes stare up at me: "Have you considered supporting us?"

"Ehh, yes, I'm a member," I say without thinking.

"We don't have members," she shoots back.

Defeated, I mutter: "Ahh. Ok ... I gave some money once …"

I'm sinking now, my internal peace eroding as I begin to feel morally inferior. The chugger represents the good in the world, and has a UN logo to prove it. I represent the moral decline of my society. We have become such selfish bastards that we don't even want to stop and listen, let alone care about anyone else's troubles.

City dwellers across the global north can identify with that experience. Our days are littered with these interactions in which we have just three options: the first, say you support other NGOs and feel bad it's a weak lie. Second, show interest in the subject matter but not in giving funds, and hope the chugger loses interest. Or third, surrender your bank details. You'll feel good about none of the above because you've simply done what was expected of you. However you slice it, you lose.

So what can we learn from this? For me chugging – or street fundraising – represents three things that are wrong with much of development communications. 1. It presents a negative and pessimistic world view, and mostly uses negative and stereotypical imagery. 2. It triggers action out of guilt, and does not motivate or educate. 3. It lacks creativity.

Indeed, a lot of development communications is about pursuing target audiences with negative pictures, and with messages that tell people what to do or think. An exaggerated version of many fundraising messages says: "The world is falling apart, you should care, we (with the help of some celebrities) are on the case, but we need your money."

Of course fundraising is necessary, but there is a flipside to this type of messaging: the repeated negative portrayal of communities does not make us care more, but less. It makes us feel bad and we stick our heads in the sand. The reason? Being confronted by a chugger releases adrenaline, and adrenaline is not what you want to stimulate if you want to motivate people to give, think or change behaviour.

What is needed instead is the release of endorphins. When we laugh and when our curiosity is sparked, endorphins makes us relax, and help lower our personal defences. Humour and creative curiosity also invites people to think for themselves. I don't like it when people tell me what to think, so why should I ask others to?

Last year my organisation, SAIH, made a music video 'Africa for Norway', a spoof that questioned development messaging. The success of that video helped me realise that although an issue is really important, it doesn't have to be wrapped up in a serious way to make its point. Breaking free from conventional communication techniques isn't always easy but the benefits can be great.

Development communicators can learn a thing or two from the fun theory, an initiative started by Volkswagen and based on the idea that making something fun is the easiest way to change people's behaviour for the better. For example, instead of saying: "Work out more," a 'piano staircase' was installed at a metro station in Sweden. Doing so increased the use of the stairs by 66% .

There is reason to be optimistic that NGOs are starting to get and use this approach. In Spain a concept called 'Bet for food', developed to support the growing use of food banks in Catalonia, capitalised on the competitive passion of football fans and led to 210,000 kilos of food collected in just one month.

US NGO, Mama Hope, has also developed 'Stop the Pity' campaign, a fundraising strategy based on dignity and fun. They have had massive outreach while turning negative stereotypes of Africans on their head. New and different approaches create curiosity, which is important in order to entice people to learn more about the issues.

And the 'fun theory' concept can be extending from fundraising to campaigning. It's a simple logic: if we're smart, there will be no need to hunt people down in the streets. They will come to us.

Sindre Edland-Gryt is communication advisor at, Norwegian Students' and Academics' International Assistance Fund (SAIH). He tweets as @sindreolav

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Chugging – street fundraising – turns members of the public into prey, releasing adrenalin that triggers fight or flight instincts. It'll take a little more imagination to create behaviour change

It's a beautiful day and as I walk down a busy street, I'm feeling good. I'm in control. But then I get the feeling that I'm being watched, that I've been caught in a predator's gaze. Looking around, I see her – a chugger. I begin to weigh up my options (walk faster; pretend to be on the phone; find another way across) when the worst thing possible happens. We make eye contact. Now confrontation is inevitable, as are the lies I must invariably tell to get out of this situation:

"Sorry, do you have two minutes?"

"No", I answer.

Her senses are sharp and she can tell I am uncertain, so presses on: "Have you heard of Unicef?," she asks.

"Yes".

She flips open her folder and an African child's eyes stare up at me: "Have you considered supporting us?"

"Ehh, yes, I'm a member," I say without thinking.

"We don't have members," she shoots back.

Defeated, I mutter: "Ahh. Ok ... I gave some money once …"

I'm sinking now, my internal peace eroding as I begin to feel morally inferior. The chugger represents the good in the world, and has a UN logo to prove it. I represent the moral decline of my society. We have become such selfish bastards that we don't even want to stop and listen, let alone care about anyone else's troubles.

City dwellers across the global north can identify with that experience. Our days are littered with these interactions in which we have just three options: the first, say you support other NGOs and feel bad it's a weak lie. Second, show interest in the subject matter but not in giving funds, and hope the chugger loses interest. Or third, surrender your bank details. You'll feel good about none of the above because you've simply done what was expected of you. However you slice it, you lose.

So what can we learn from this? For me chugging – or street fundraising – represents three things that are wrong with much of development communications. 1. It presents a negative and pessimistic world view, and mostly uses negative and stereotypical imagery. 2. It triggers action out of guilt, and does not motivate or educate. 3. It lacks creativity.

Indeed, a lot of development communications is about pursuing target audiences with negative pictures, and with messages that tell people what to do or think. An exaggerated version of many fundraising messages says: "The world is falling apart, you should care, we (with the help of some celebrities) are on the case, but we need your money."

Of course fundraising is necessary, but there is a flipside to this type of messaging: the repeated negative portrayal of communities does not make us care more, but less. It makes us feel bad and we stick our heads in the sand. The reason? Being confronted by a chugger releases adrenaline, and adrenaline is not what you want to stimulate if you want to motivate people to give, think or change behaviour.

What is needed instead is the release of endorphins. When we laugh and when our curiosity is sparked, endorphins makes us relax, and help lower our personal defences. Humour and creative curiosity also invites people to think for themselves. I don't like it when people tell me what to think, so why should I ask others to?

Last year my organisation, SAIH, made a music video 'Africa for Norway', a spoof that questioned development messaging. The success of that video helped me realise that although an issue is really important, it doesn't have to be wrapped up in a serious way to make its point. Breaking free from conventional communication techniques isn't always easy but the benefits can be great.

Development communicators can learn a thing or two from the fun theory, an initiative started by Volkswagen and based on the idea that making something fun is the easiest way to change people's behaviour for the better. For example, instead of saying: "Work out more," a 'piano staircase' was installed at a metro station in Sweden. Doing so increased the use of the stairs by 66% .

There is reason to be optimistic that NGOs are starting to get and use this approach. In Spain a concept called 'Bet for food', developed to support the growing use of food banks in Catalonia, capitalised on the competitive passion of football fans and led to 210,000 kilos of food collected in just one month.

US NGO, Mama Hope, has also developed 'Stop the Pity' campaign, a fundraising strategy based on dignity and fun. They have had massive outreach while turning negative stereotypes of Africans on their head. New and different approaches create curiosity, which is important in order to entice people to learn more about the issues.

And the 'fun theory' concept can be extending from fundraising to campaigning. It's a simple logic: if we're smart, there will be no need to hunt people down in the streets. They will come to us.

Sindre Edland-Gryt is communication advisor at, Norwegian Students' and Academics' International Assistance Fund (SAIH). He tweets as @sindreolav

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I'm clearing out my mother's house and would like to give her belongings to someone who needs them. But where to begin?

Every week a Guardian Money reader submits a question, and it's up to you to help him or her out – a selection of the best answers will appear in next Saturday's paper.

This week's question

I'm clearing out my late mother's home and am wondering what to do with all her furniture, linen, pans etc. It's all good stuff and I'd like to give it to someone who really needs it – but how do I find them? I've thought of Freecycle but fear dealers could sell it on. Anyone found a solution?

What are your thoughts?

• Have you got a personal finance question you want readers to answer? Email personal.effects@guardian.co.uk

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I'm clearing out my mother's house and would like to give her belongings to someone who needs them. But where to begin?

Every week a Guardian Money reader submits a question, and it's up to you to help him or her out – a selection of the best answers will appear in next Saturday's paper.

This week's question

I'm clearing out my late mother's home and am wondering what to do with all her furniture, linen, pans etc. It's all good stuff and I'd like to give it to someone who really needs it – but how do I find them? I've thought of Freecycle but fear dealers could sell it on. Anyone found a solution?

What are your thoughts?

• Have you got a personal finance question you want readers to answer? Email personal.effects@guardian.co.uk

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Northern & Shell boss, who operates rival Health Lottery, says he wants Camelot's licence when it next comes up

Richard Desmond has expressed an interest in bidding to run a "bigger, better" National Lottery, with ticket prices of £1, when the licence next comes up for renewal.

Desmond, who has been at loggerheads with National Lottery operator Camelot since unveiling his rival the Health Lottery in February 2011, made the claim following comments reportedly made by the rival company's chief executive, Dianne Thompson.

Thompson, who led a failed high court bid to get the Health Lottery's gambling licence revoked, has said that it is a "possibility" that Camelot might not look to bid to renew the licence it has held for 19 years because of the Health Lottery.

Speaking to GamblingCompliance.com at the European Lotteries Congress in Tel Aviv she said that it it was a possibility that Camelot would not rebid.

Desmond has seized on the PR opportunity to state that his media company Northern & Shell is interested in the franchise.

He said that if it was the successful bidder it would reduce the cost of tickets to £1 and pledged to give all profits back to charities. In January Camelot announced that the price of a ticket would be doubling later this year from £1 to £2, the first rise since the lottery was introduced in the UK nearly 20 years ago.

"I would be very happy to bid to run the National Lottery, which I will make bigger, better and British as well far more cost-effective," said Desmond. "I will raise more money for good causes and put all the profits back to support charities and good causes. I will put the ticket prices back to a pound."

Camelot declined to comment. It has been the sole licence holder since the National Lottery was set up in 1994 and has a contract to run it until 2023. Camelot's profits last year were £55m on record sales of £6.9bn.

Desmond's Health Lottery has so far raised £34m for good causes, with a top prize of £100,000.

• To contact the MediaGuardian news desk email media@guardian.co.uk or phone 020 3353 3857. For all other inquiries please call the main Guardian switchboard on 020 3353 2000. If you are writing a comment for publication, please mark clearly "for publication".

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• This article was amended on 11 June 2013 to clarify that the Lotto ticket price has not yet risen to £2. Camelot announced in January that the price would rise later in the year.

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Northern & Shell boss, who operates rival Health Lottery, says he wants Camelot's licence when it next comes up

Richard Desmond has expressed an interest in bidding to run a "bigger, better" National Lottery, with ticket prices of £1, when the licence next comes up for renewal.

Desmond, who has been at loggerheads with National Lottery operator Camelot since unveiling his rival the Health Lottery in February 2011, made the claim following comments reportedly made by the rival company's chief executive, Dianne Thompson.

Thompson, who led a failed high court bid to get the Health Lottery's gambling licence revoked, has said that it is a "possibility" that Camelot might not look to bid to renew the licence it has held for 19 years because of the Health Lottery.

Speaking to GamblingCompliance.com at the European Lotteries Congress in Tel Aviv she said that it it was a possibility that Camelot would not rebid.

Desmond has seized on the PR opportunity to state that his media company Northern & Shell is interested in the franchise.

He said that if it was the successful bidder it would reduce the cost of tickets to £1 and pledged to give all profits back to charities. In January Camelot announced that the price of a ticket would be doubling later this year from £1 to £2, the first rise since the lottery was introduced in the UK nearly 20 years ago.

"I would be very happy to bid to run the National Lottery, which I will make bigger, better and British as well far more cost-effective," said Desmond. "I will raise more money for good causes and put all the profits back to support charities and good causes. I will put the ticket prices back to a pound."

Camelot declined to comment. It has been the sole licence holder since the National Lottery was set up in 1994 and has a contract to run it until 2023. Camelot's profits last year were £55m on record sales of £6.9bn.

Desmond's Health Lottery has so far raised £34m for good causes, with a top prize of £100,000.

• To contact the MediaGuardian news desk email media@guardian.co.uk or phone 020 3353 3857. For all other inquiries please call the main Guardian switchboard on 020 3353 2000. If you are writing a comment for publication, please mark clearly "for publication".

• To get the latest media news to your desktop or mobile, follow MediaGuardian on Twitter and Facebook

• This article was amended on 11 June 2013 to clarify that the Lotto ticket price has not yet risen to £2. Camelot announced in January that the price would rise later in the year.

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MPs have told firms involved in street fundraising that they have five years to address public concerns over the practice

A regulatory crackdown on street fundraising – known as "chugging" – is inevitable if charities fail to address public concerns over the practice, MPs have warned.

Critics of chugging, in which salespeople cajole passersby to sign up for direct debit donations to good causes, say it is a form of public harassment and causes nuisance to shoppers.

Firms involved in street fundraising, which raises about £130m a year, are regulated by the voluntary sector itself. But the report by the House of Commons public administration select committee (Pasc) says this is not working.

"It is clear that self-regulation has failed so far to generate the level of public confidence which is essential to the success of the system and the reputation of the charitable sector," it says.

The Pasc proposes the current system be "placed on notice", and if there are no improvements within five years, statutory regulation should be introduced. "There should be no complacency from the charitable sector about the need to rebuild public confidence in charity fundraising."

Fundraisers told MPs that chugging – a name derived from "charity mugging" – had attracted few complaints. Public annoyance at the practice stemmed from feelings of guilt because "some people just do not like to be asked to support charity".

The report rejected calls by a rightwing thinktank to tighten up the rules to curtail political campaigning by charities such as Shelter and Child Poverty Action group. But it does recommend that all charities be required to declare in their annual accounts what money they spend on "political and communications work".

"Clear information about how much a charity spends on political and campaigning activity would enable members of the public to make an informed choice about whether to donate based on an understanding of how an organisation would use their donation," the report says.

However, Sir Stephen Bubb, chief executive of charity umbrella body the Association of Chief Executives of Voluntary Organisations (Acevo), said there was no public support for restricting charities' right to campaign and called the proposal "an unnecessary piece of red tape".

He said: "The proposal is entirely without foundation and would impose a regulatory burden that would mean more donations being spent on bureaucracy, and less on good causes. It is a regulatory madness and the government should reject it."

The report partly exonerates the Charity Commission for its apparent failure to detect a fake charity, the Cup Trust, which was used as a front for a multimillion pound tax avoidance scheme.

The commission was criticised this week by Margaret Hodge, chair of the Commons public accounts committee, who said she would launch an investigation into whether the commission was "fit for purpose".

But the Pasc report concludes that the commission, which has lost a third of its budget in two years, did not have the capacity to investigate potential tax fraud, which is the role of HMRC.

It warned that if ministers wanted the commission to investigate tax avoidance, they should fund it adequately. "Ministers must decide whether they think it is necessary to have a proactive regulator of the charitable sector, and if so, the government must increase the commission's budget and ask Parliament to clarify their powers."

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MPs have told firms involved in street fundraising that they have five years to address public concerns over the practice

A regulatory crackdown on street fundraising – known as "chugging" – is inevitable if charities fail to address public concerns over the practice, MPs have warned.

Critics of chugging, in which salespeople cajole passersby to sign up for direct debit donations to good causes, say it is a form of public harassment and causes nuisance to shoppers.

Firms involved in street fundraising, which raises about £130m a year, are regulated by the voluntary sector itself. But the report by the House of Commons public administration select committee (Pasc) says this is not working.

"It is clear that self-regulation has failed so far to generate the level of public confidence which is essential to the success of the system and the reputation of the charitable sector," it says.

The Pasc proposes the current system be "placed on notice", and if there are no improvements within five years, statutory regulation should be introduced. "There should be no complacency from the charitable sector about the need to rebuild public confidence in charity fundraising."

Fundraisers told MPs that chugging – a name derived from "charity mugging" – had attracted few complaints. Public annoyance at the practice stemmed from feelings of guilt because "some people just do not like to be asked to support charity".

The report rejected calls by a rightwing thinktank to tighten up the rules to curtail political campaigning by charities such as Shelter and Child Poverty Action group. But it does recommend that all charities be required to declare in their annual accounts what money they spend on "political and communications work".

"Clear information about how much a charity spends on political and campaigning activity would enable members of the public to make an informed choice about whether to donate based on an understanding of how an organisation would use their donation," the report says.

However, Sir Stephen Bubb, chief executive of charity umbrella body the Association of Chief Executives of Voluntary Organisations (Acevo), said there was no public support for restricting charities' right to campaign and called the proposal "an unnecessary piece of red tape".

He said: "The proposal is entirely without foundation and would impose a regulatory burden that would mean more donations being spent on bureaucracy, and less on good causes. It is a regulatory madness and the government should reject it."

The report partly exonerates the Charity Commission for its apparent failure to detect a fake charity, the Cup Trust, which was used as a front for a multimillion pound tax avoidance scheme.

The commission was criticised this week by Margaret Hodge, chair of the Commons public accounts committee, who said she would launch an investigation into whether the commission was "fit for purpose".

But the Pasc report concludes that the commission, which has lost a third of its budget in two years, did not have the capacity to investigate potential tax fraud, which is the role of HMRC.

It warned that if ministers wanted the commission to investigate tax avoidance, they should fund it adequately. "Ministers must decide whether they think it is necessary to have a proactive regulator of the charitable sector, and if so, the government must increase the commission's budget and ask Parliament to clarify their powers."

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MPs have told firms involved in street fundraising that they have five years to address public concerns over the practice

A regulatory crackdown on street fundraising – known as "chugging" – is inevitable if charities fail to address public concerns over the practice, MPs have warned.

Critics of chugging, in which salespeople cajole passersby to sign up for direct debit donations to good causes, say it is a form of public harassment and causes nuisance to shoppers.

Firms involved in street fundraising, which raises about £130m a year, are regulated by the voluntary sector itself. But the report by the House of Commons public administration select committee (Pasc) says this is not working.

"It is clear that self-regulation has failed so far to generate the level of public confidence which is essential to the success of the system and the reputation of the charitable sector," it says.

The Pasc proposes the current system be "placed on notice", and if there are no improvements within five years, statutory regulation should be introduced. "There should be no complacency from the charitable sector about the need to rebuild public confidence in charity fundraising."

Fundraisers told MPs that chugging – a name derived from "charity mugging" – had attracted few complaints. Public annoyance at the practice stemmed from feelings of guilt because "some people just do not like to be asked to support charity".

The report rejected calls by a rightwing thinktank to tighten up the rules to curtail political campaigning by charities such as Shelter and Child Poverty Action group. But it does recommend that all charities be required to declare in their annual accounts what money they spend on "political and communications work".

"Clear information about how much a charity spends on political and campaigning activity would enable members of the public to make an informed choice about whether to donate based on an understanding of how an organisation would use their donation," the report says.

However, Sir Stephen Bubb, chief executive of charity umbrella body the Association of Chief Executives of Voluntary Organisations (Acevo), said there was no public support for restricting charities' right to campaign and called the proposal "an unnecessary piece of red tape".

He said: "The proposal is entirely without foundation and would impose a regulatory burden that would mean more donations being spent on bureaucracy, and less on good causes. It is a regulatory madness and the government should reject it."

The report partly exonerates the Charity Commission for its apparent failure to detect a fake charity, the Cup Trust, which was used as a front for a multimillion pound tax avoidance scheme.

The commission was criticised this week by Margaret Hodge, chair of the Commons public accounts committee, who said she would launch an investigation into whether the commission was "fit for purpose".

But the Pasc report concludes that the commission, which has lost a third of its budget in two years, did not have the capacity to investigate potential tax fraud, which is the role of HMRC.

It warned that if ministers wanted the commission to investigate tax avoidance, they should fund it adequately. "Ministers must decide whether they think it is necessary to have a proactive regulator of the charitable sector, and if so, the government must increase the commission's budget and ask Parliament to clarify their powers."

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Margaret Hodge says alarm bells should have rung over Cup Trust, run by creator of Jimmy Carr's tax scheme

MPs have attacked the charity watchdog for its "astounding" failure to close down a fake charity that gave just 3p out every £100 of donations to good causes.

Margaret Hodge, chair of the influential public accounts committee (PAC), said that if the Charity Commission had "only bothered to pick up the phone" to the tax authorities it would have discovered that the Cup Trust charity was a front for a multimillion-pound tax-avoidance scheme.

The Cup Trust, the claimed objective of which was to "improve the lives of young children and adults", donated just £55,000 of its "staggering" £176m income to charitable causes. Despite its scant donations, the trust used a complex web of transactions to seek £46m in gift aid, and its "donors" claimed £55m in charitable-giving tax relief.

Hodge said it should have been obvious to the commission that the trust, which was founded with only one trustee, in the Caribbean, had been "set up as a tax-avoidance scheme by people known to be in the business of tax avoidance".

The Cup Trust was controlled by Matthew Jenner, the boss of NT Advisors, who Hodge said was "already renowned in HMRC" for setting up tax-avoidance schemes.

Other schemes set up by NT Advisors – the initials stand for "no tax" – include those used by the comedian Jimmy Carr and the TV presenter Chris Moyles. HMRC has won three successive tax-avoidance cases against the Jersey-based NT Advisors, including one case last week.

"It is so astounding," Hodge said. "It stares you in the face. Yet it didn't appear to raise any questions [with the commission] before it was registered. If only someone had bothered to pick up the phone and ask them [HMRC] about NT Advisors. Elementary checks with HMRC could have alerted the commission to the true purpose of the trust and its trustee … Its purpose was to avoid tax."

Hodge said it was remarkable that HMRC had not queried why the Cup Trust, which collected more annual "donations" than the RSPB, the British Heart Foundation or the Salvation Army, had just one trustee: Mountstar, based in the British Virgin Islands. The directors of Mountstar are also the directors of NT Advisors. "Alarm bells should have rung," she said.

A public accounts committee report said the trust operated by buying £176m of government bonds, known as gilts, which it sold on to "donors" for only £17,000.

The donors, whom Hodge described as "Jimmy Carr types", sold the gilts and donated the proceeds – which were roughly the same as the purchase price – to the charity. In doing so, they were able to try to claim £55m in charitable-giving tax relief.

The trust went on to claim £46m in gift aid from HMRC. The tax authorities have not paid the claim, vowing to stop "tax dodgers" from exploiting charitable tax relief.

If the scheme had worked, Jenner and his partner, Anthony Mehigan, could have collected 5-10% of the tax saved for their wealthy clients. Tax experts said the pair may have already collected some fees in advance.

Hodge described the exploitation of charitable status by tax avoiders as "repugnant" but warned that there were "devils in this world" who would continue to exploit well-intentioned government tax-relief measures.

The PAC report said it was "unacceptable" that the Cup Trust had ever been allowed to register as a charity, and it was shocking that the commission had failed to close it down when it investigated it, between 2010 and 2012.

"In the last 25 years, the committee and the National Audit Office have repeatedly found severe shortcomings in the commission's performance, particularly in relation to investigation and enforcement," the report said.

In the last four years, the commission has removed only one trustee, after a judge ruled that he had perjured himself, and appointed only five interim managers to run suspect charities.

Hodge said the commission appeared to have "simply failed" to implement the PAC's previous recommendations, and said her committee would now "undertake yet another" investigation into whether the regulator for charities in England and Wales is fit for purpose.

The commission said it had opened a new statutory inquiry into the Cup Trust, but not until after its chairman was hauled before the PAC, in March. It has also appointed an interim manager to run the charity, in a move that Mountstar has challenged.

A spokeswoman said the commission was "discussing better ways to share information and work together to tackle abuse of charity. We are targeting our resources on the areas of highest risk, with a particular emphasis on tackling fraud, terrorist abuse and risks to vulnerable beneficiaries."

Hodge warned that the commission's failure to act against the Cup Trust was "disastrous" for the reputation of the commission and for the charity sector in general. She also raised concern that the Cup Trust scandal may "just be the tip of the iceberg". HMRC investigates 300 incidents of fraud relating to charities every year.

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Margaret Hodge says alarm bells should have rung over Cup Trust, run by creator of Jimmy Carr's tax scheme

MPs have attacked the charity watchdog for its "astounding" failure to close down a fake charity that gave just 3p out every £100 of donations to good causes.

Margaret Hodge, chair of the influential public accounts committee (PAC), said that if the Charity Commission had "only bothered to pick up the phone" to the tax authorities it would have discovered that the Cup Trust charity was a front for a multimillion-pound tax-avoidance scheme.

The Cup Trust, the claimed objective of which was to "improve the lives of young children and adults", donated just £55,000 of its "staggering" £176m income to charitable causes. Despite its scant donations, the trust used a complex web of transactions to seek £46m in gift aid, and its "donors" claimed £55m in charitable-giving tax relief.

Hodge said it should have been obvious to the commission that the trust, which was founded with only one trustee, in the Caribbean, had been "set up as a tax-avoidance scheme by people known to be in the business of tax avoidance".

The Cup Trust was controlled by Matthew Jenner, the boss of NT Advisors, who Hodge said was "already renowned in HMRC" for setting up tax-avoidance schemes.

Other schemes set up by NT Advisors – the initials stand for "no tax" – include those used by the comedian Jimmy Carr and the TV presenter Chris Moyles. HMRC has won three successive tax-avoidance cases against the Jersey-based NT Advisors, including one case last week.

"It is so astounding," Hodge said. "It stares you in the face. Yet it didn't appear to raise any questions [with the commission] before it was registered. If only someone had bothered to pick up the phone and ask them [HMRC] about NT Advisors. Elementary checks with HMRC could have alerted the commission to the true purpose of the trust and its trustee … Its purpose was to avoid tax."

Hodge said it was remarkable that HMRC had not queried why the Cup Trust, which collected more annual "donations" than the RSPB, the British Heart Foundation or the Salvation Army, had just one trustee: Mountstar, based in the British Virgin Islands. The directors of Mountstar are also the directors of NT Advisors. "Alarm bells should have rung," she said.

A public accounts committee report said the trust operated by buying £176m of government bonds, known as gilts, which it sold on to "donors" for only £17,000.

The donors, whom Hodge described as "Jimmy Carr types", sold the gilts and donated the proceeds – which were roughly the same as the purchase price – to the charity. In doing so, they were able to try to claim £55m in charitable-giving tax relief.

The trust went on to claim £46m in gift aid from HMRC. The tax authorities have not paid the claim, vowing to stop "tax dodgers" from exploiting charitable tax relief.

If the scheme had worked, Jenner and his partner, Anthony Mehigan, could have collected 5-10% of the tax saved for their wealthy clients. Tax experts said the pair may have already collected some fees in advance.

Hodge described the exploitation of charitable status by tax avoiders as "repugnant" but warned that there were "devils in this world" who would continue to exploit well-intentioned government tax-relief measures.

The PAC report said it was "unacceptable" that the Cup Trust had ever been allowed to register as a charity, and it was shocking that the commission had failed to close it down when it investigated it, between 2010 and 2012.

"In the last 25 years, the committee and the National Audit Office have repeatedly found severe shortcomings in the commission's performance, particularly in relation to investigation and enforcement," the report said.

In the last four years, the commission has removed only one trustee, after a judge ruled that he had perjured himself, and appointed only five interim managers to run suspect charities.

Hodge said the commission appeared to have "simply failed" to implement the PAC's previous recommendations, and said her committee would now "undertake yet another" investigation into whether the regulator for charities in England and Wales is fit for purpose.

The commission said it had opened a new statutory inquiry into the Cup Trust, but not until after its chairman was hauled before the PAC, in March. It has also appointed an interim manager to run the charity, in a move that Mountstar has challenged.

A spokeswoman said the commission was "discussing better ways to share information and work together to tackle abuse of charity. We are targeting our resources on the areas of highest risk, with a particular emphasis on tackling fraud, terrorist abuse and risks to vulnerable beneficiaries."

Hodge warned that the commission's failure to act against the Cup Trust was "disastrous" for the reputation of the commission and for the charity sector in general. She also raised concern that the Cup Trust scandal may "just be the tip of the iceberg". HMRC investigates 300 incidents of fraud relating to charities every year.

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Internet giant pledged only £20,000 to Internet Watch Foundation last year, despite multibillion-dollar turnover

Google donated little more than £20,000 last year to the charity responsible for policing child abuse images online – the equivalent of 90 seconds' profit for the internet firm.

The search giant was one of a number of firms, including Facebook and Microsoft, that pledged relatively small amounts to the Internet Watch Foundation (IWF) in 2012, despite their multibillion-dollar turnovers.

Facebook made a baseline donation of around £10,000 and Microsoft's Bing search engine gave about £20,000, according to the IWF's own records.

Keith Vaz, the chairman of the home affairs select committee, said internet companies needed to ensure the IWF was properly resourced to tackle urgently the proliferation of child abuse images online following the murder of five-year-old April Jones.

"I am shocked that, despite the importance they have said they place on its role in keeping our children safe, they have donated such paltry amounts to it, which for them represent a drop in the ocean. As it stands, it is difficult to take their commitment to protecting our children seriously," Vaz said.

Google, Facebook and Microsoft insisted they had a strong relationship with the IWF and other child protection bodies. Facebook sponsored an event hosted by the IWF last year and made donations to agencies in other countries, it said.

Sir Richard Tilt, the IWF's chair of the board of trustees, said it would welcome more money from members. "There's certainly scope for increasing our number of analysts and we know if we had more analysts we could do better. If we could get more money that would enable us to do more," he said.

The scrutiny came after Mark Bridger was jailed for life for the sexually-motivated murder of April Jones, having earlier looked at child abuse images online. The biggest web companies – apart from Twitter and Amazon – are members of the IWF and block about 1,000 illegal sites at any one time.

But the IWF's five-strong team of analysts has become overwhelmed as reports of child abuse sites soared by 40% compared with last year, to 40,000, or 150 a day. The body is pushing companies to introduce new measures in the next 12 months including a "splash page", which would warn visitors to websites showing unlawful abuse images.

Tilt, a former director of the prison service, believes the setting will be a strong deterrent and potentially prevent further attacks. "Most of us who work in this area feel it will make a difference. There probably is a link that [online abuse images] make people more likely to commit dreadful offences, but the trouble is there isn't any clear evidence," he said.

Deborah Denis of the Lucy Faithful Foundation, a children's charity dedicated to preventing child sexual abuse, called on search engines to become more involved. But she said more stringent measures for those caught with indecent images would be "unacceptable and unrealistic", and instead there should be better sex and relationship education in schools.

Denis said: "If we attempted to lock up everybody who looked at indecent images of children, we simply wouldn't have enough space in prison. The police already do excellent work in this area, but it is a problem that is just too big for them to tackle alone."

Google was singled out for criticism by Liz Longhurst, whose daughter Jane was murdered by extreme pornography user Graham Coutts in 2003, prompting her to campaign for internet firms to ban such images. She said internet firms must "get their act together" and start tackling violent online imagery. "What annoys me immensely is that Google won't block these sites. They say we've got to have freedom. All I ask them is where was my daughter's freedom – tell me that."

There have been calls for Google to enforce its "safe search" option as the default setting, which would block pornographic material in search results. However, insiders insisted the move would be ineffectual as the stricter setting operates as an algorithm for legal content – and child abuse imagery is illegal, so is covered by extra blocking measures.

Scott Rubin, Google's director of communications outside America, said the company has a "zero-tolerance approach" on child abuse images and added: "The SafeSearch filter, which is designed to prevent sexually explicit material of all kinds from showing up in your search results, should not be conflated or confused with our dedication to keeping illegal abuse imagery out of our products. We don't rely simply on filtering technology to block child abuse images; we go beyond that.

"We are very proactive and work with the right people, including the National Centre for Missing and Exploited Children in the US and the IWF, to keep child abuse content off all of our sites. Any implication we aren't doing anything or we refuse to be part of removing this material is wrong."

A spokeswoman for Microsoft said: ""When we are made aware of any illegal content, we remove it from our services, including our search engine and report it to the police."

Facebook said it has technology that scans for child exploitative content and automatically flags images to law enforcement. It added: "Facebook works closely with CEOP [the Child Exploitation and Online Protection centre] in the UK to help bring offenders to justice."

• Google
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• Internet
• Pornography
• Child protection
• Children
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Internet giant pledged only £20,000 to Internet Watch Foundation last year, despite multibillion-dollar turnover

Google donated little more than £20,000 last year to the charity responsible for policing child abuse images online – the equivalent of 90 seconds' profit for the internet firm.

The search giant was one of a number of firms, including Facebook and Microsoft, that pledged relatively small amounts to the Internet Watch Foundation (IWF) in 2012, despite their multibillion-dollar turnovers.

Facebook made a baseline donation of around £10,000 and Microsoft's Bing search engine gave about £20,000, according to the IWF's own records.

Keith Vaz, the chairman of the home affairs select committee, said internet companies needed to ensure the IWF was properly resourced to tackle urgently the proliferation of child abuse images online following the murder of five-year-old April Jones.

"I am shocked that, despite the importance they have said they place on its role in keeping our children safe, they have donated such paltry amounts to it, which for them represent a drop in the ocean. As it stands, it is difficult to take their commitment to protecting our children seriously," Vaz said.

Google, Facebook and Microsoft insisted they had a strong relationship with the IWF and other child protection bodies. Facebook sponsored an event hosted by the IWF last year and made donations to agencies in other countries, it said.

Sir Richard Tilt, the IWF's chair of the board of trustees, said it would welcome more money from members. "There's certainly scope for increasing our number of analysts and we know if we had more analysts we could do better. If we could get more money that would enable us to do more," he said.

The scrutiny came after Mark Bridger was jailed for life for the sexually-motivated murder of April Jones, having earlier looked at child abuse images online. The biggest web companies – apart from Twitter and Amazon – are members of the IWF and block about 1,000 illegal sites at any one time.

But the IWF's five-strong team of analysts has become overwhelmed as reports of child abuse sites soared by 40% compared with last year, to 40,000, or 150 a day. The body is pushing companies to introduce new measures in the next 12 months including a "splash page", which would warn visitors to websites showing unlawful abuse images.

Tilt, a former director of the prison service, believes the setting will be a strong deterrent and potentially prevent further attacks. "Most of us who work in this area feel it will make a difference. There probably is a link that [online abuse images] make people more likely to commit dreadful offences, but the trouble is there isn't any clear evidence," he said.

Deborah Denis of the Lucy Faithful Foundation, a children's charity dedicated to preventing child sexual abuse, called on search engines to become more involved. But she said more stringent measures for those caught with indecent images would be "unacceptable and unrealistic", and instead there should be better sex and relationship education in schools.

Denis said: "If we attempted to lock up everybody who looked at indecent images of children, we simply wouldn't have enough space in prison. The police already do excellent work in this area, but it is a problem that is just too big for them to tackle alone."

Google was singled out for criticism by Liz Longhurst, whose daughter Jane was murdered by extreme pornography user Graham Coutts in 2003, prompting her to campaign for internet firms to ban such images. She said internet firms must "get their act together" and start tackling violent online imagery. "What annoys me immensely is that Google won't block these sites. They say we've got to have freedom. All I ask them is where was my daughter's freedom – tell me that."

There have been calls for Google to enforce its "safe search" option as the default setting, which would block pornographic material in search results. However, insiders insisted the move would be ineffectual as the stricter setting operates as an algorithm for legal content – and child abuse imagery is illegal, so is covered by extra blocking measures.

Scott Rubin, Google's director of communications outside America, said the company has a "zero-tolerance approach" on child abuse images and added: "The SafeSearch filter, which is designed to prevent sexually explicit material of all kinds from showing up in your search results, should not be conflated or confused with our dedication to keeping illegal abuse imagery out of our products. We don't rely simply on filtering technology to block child abuse images; we go beyond that.

"We are very proactive and work with the right people, including the National Centre for Missing and Exploited Children in the US and the IWF, to keep child abuse content off all of our sites. Any implication we aren't doing anything or we refuse to be part of removing this material is wrong."

A spokeswoman for Microsoft said: ""When we are made aware of any illegal content, we remove it from our services, including our search engine and report it to the police."

Facebook said it has technology that scans for child exploitative content and automatically flags images to law enforcement. It added: "Facebook works closely with CEOP [the Child Exploitation and Online Protection centre] in the UK to help bring offenders to justice."

• Google
• Charitable giving
• Internet
• Pornography
• Child protection
• Children
• Charities
• Voluntary sector
• ISPs