fara charity shop a rip off! Post Reply

[tooting_mummy]

Schoolgatesmum - there are lots of other problems in the world but this thread is trying to get to the bottom of one of them. We could talk about the banks, we could talk about the atrocities in Syria but what we are now discussing is that an organisation we all believed did amazing things for kids in Romania is possibly lining other pockets first and foremost with the charitable function being little more than a front. Possibly. We await Fara's response.

[catboo1]

Very well put Tooting_mummy. I couldn't agree more

[nanny1985]

I have been following this thread for some time because I am romanian and I used to be a customer- before the prices skyrocketed. Every time Fara has sent a response, it was evasive, especially regarding the costs associated with helping the children.

[AbbevilleMummy]

Schoolgatesmum - 20% is not very good when your stock is free!

Per Fara's 2011 accounts, shop costs were 81% of shop revenue, leaving a margin of only 18% (and further governance costs were deducted from this!)

Per Trinity Hospice's accounts, their shop costs were only 58% of shop revenue, leaving a margin of 42%.

Fara's results are appalling and yet they are congratulating themselves on the "prudent management of their finances" on this thread!!

If Fara truly had nothing to hide, then the Financial Director who responded would have presented clear facts and figures justifying the costs incurred and the very low margin achieved in comparison to their direct competitors as these details would be at their finger tips I'm sure. However, he/she decided to send out a PR response instead and is hiding behind minimum disclosure requirements.

On that point, Trinity Hospice's accounts are extremely detailed giving far more disclosure than they are legally required to do. One can only assume this is because they choose to be highly transparent as they have nothing to hide. It's a shame the same cannot be said for Fara.

My advice to those as appalled as I am would be to donate your goods and do your shopping at Trinity Hospice, there is one very close to most Fara's I can think of so you don't have to go out of your way.

Just to be clear, I have no link to Trinity Hospice what so ever.

[Geegee007]

I too have been following this thread with interest and am appalled by what has been revealed.
It is rather timely for me that this should should come to light as I have some very nice baby clothes I am looking to dispose of and Fara Kids would have been the obvious choice. Clearly not anymore.
Well done all for pursuing this.

[Monkey_mami]

So now the question is: which are the more deserving charities to take our donations to?

[tooting_mummy]

It would be nice if a charity shop not recognised for children's items could now have a section dedicated to kids clothes and toys and this would gradually become more popular. Because of the size of the shop, the Oxfam Shop in Tooting would be perfect (although I would say Tooting ) and I don't think we need to scrutinise their records to trust that Oxfam operate in a more moral way.

[pigeonpairmum]

Trinity Hospice - they are local, they work hard, they do an amazing job, they serve our community. Nuff said? I have no link to them btw.

[Medway]

How do we get this story out further...everyone who lives in this area needs to know this information so they can make more informed choices about donating/ purchasing from Fara.

The Wandsworth Guardian seems like a good place to start

[Nick AP]

Consider that this is about the management of the charity's commercial operation, not necessarily the work of the charity itself. What about raising our concerns with the patron/s of the charity?

[FaraCharity]

From the FARA Foundation 2011 audited and filed accounts published by the Charity Commission

•£595,273 was cited as charitable spending (7% of total income)

•In addition to this FARA shops raised £753,565 (9% of total income) to contribute to the funds retained for future use stated on the summary sheet.

•FARA shops contribution to charitable spending in 2011 is 16% of total income generated by the charity.

The FARA Foundation2012 are audited and file accounts with the Charity Commission (these will not be published by them until September 2013.) Here are figures from these accounts

•In 2012 FARA shops raised £1,271,469 in funds for charitable spending (17.4% of trade income)

•In addition to this £309,148 (4% of trade income) was raised through Gift Aid (funds generated directly through sale of goods through FARA Shops) this was added to the FARA Charity reserves.

•In 2012 the FARA Foundation had `reserves of £2,852,599 in line with the requirements laid out in the Chairman’s report in FARA’s Reserve Policy- p7/37 of PDF of 2011 accounts.

To put it in over simplistic terms in 2012 for every one pound spent in FARA shops 21p was given to help with the daily support needs of the children and young people in FARA’s care and for their future requirements.

•In 2012 FARA Shops trade income was £7,314,510 (with a trading performance of 23.6%)

•In 2012 FARA’s trading costs were £5,724,941 which were to cover commercial rents for 50 shops, business rates, utilities, wages for 170 fulltime and 120 part-time staff, warehouse and distribution running costs, property maintenance, insurance, business administration costs.

FARA shops are performing favourably within the charity shop sector. Comparison can be made by consulting the league table in the Charity Shops Survey 2012 published by The Civil Society.

Further scrutiny of this league table shows that in comparison with others FARA is unusual in raising 97.5% of funds through shops rather than from voluntary donations.

Trinity Hospice generates 33% of income from 21 shops
Debra generates 72% of income from 116 shops
Sue Ryder generates 47% income from 392 shops

Income revenue from charity shop fund raising has much higher associated costs than that of voluntary donations (with modest business administration expenses.) FARA continues to struggle to generate voluntary donations from the general public however, we have been very lucky to receive many donations of goods for re sale through continued support for our shops.

[AbbevilleMummy]

Thanks for the response Fara but you didn't actually add any real information.

The results I posted re Trinity Hospice were purely with regards to their shop operations and I intentionally left out voluntary donations etc in order to compare like with like.

I will do a similar analysis of the accounts for the other companies you have mentioned and post the results on here to see if you do compare favourably to them as you certainly don't with Trinity Hospice.

[Scottov]

Reading this thread I am astounded that someone on a parenting website has got the time or inclination to be so consistently nasty (hi Scottov), but I guess it takes all sorts....

Before Nick's post I was about to point out that the high prices could be actually be damaging to revenue, thus negating the people who think items should be set at the highest price possible. Excuse my rusty economics but there is a situation called 'price elasticity of demand' whereby a price increase results in such a fall in purchasing that revenue/profits fall. Examples of such items would be non essential items (eg the bits and bobs people have mentioned picking up in Fara without thinking) or goods that can be replaced easily with other products or from other sources (brand new items fit the same price as second hand). It's only anecdotal evidence but I'm another person who has pretty much stopped shopping at Fara - my dd is almost 4 and I shopped there regularly when she was a baby but have only bought a couple of things for my 6 month old ds because I find everything over priced.
I do however still donate and as this is our last baby we potentially have a lot to donate but Nick's post has made me think again. I'm shocked that so little of their revenue goes to charity. Surely something should be done to publisize this? Did the article ever get into the Wandsworth Guardian?

Thoughts Scottov?

Thoughts about what?

About price elasticity, as a GCSE level economic principle?

About price elasticity not being especially applicable to a charity shop - demand is highly elastic in a market with many alternatives?

About you exercising your natural rights to choose to shop elsewhere?

Or about FARA's public benefit test? I'd have thought that is FARA's management to talk about

[Scottov]

Clapset and Tootingmummy - please don't encourage scottov to post! It's been a bonus having my computer down for the last 3 weeks that I didn't read a single one of his unpleasant posts!

Very interesting that you claim to read my posts, but run away & hide everytime I ask you if you can substantiate your earlier slanderous assertions

I think its very interesting that Nick is trying to bring a fact based analysis to proceedings, as opposed to fantasist ravings.

[Scottov]

Thanks for the response Fara but you didn't actually add any real information.

I don't know that its fair to say they haven't provided any real information. What I think is perhaps true, or maybe the point to raise is how sustainable is a retail based business model in difficult economic times?

That seems to be the question: they have a bricks n mortar based retail model, versus say Trinity Hospice who are more donation based - is the model now a problem? There are a lot of fixed costs involved in such a setup

Reserves seem high, but if they have committed to long term programs then it is arguable they are needed.

I do wonder if such a high multiple (reserves/annual charitable distributions), or how many years worth they are holding back is necessary. But it might be.

Trinity hospice is another worthy charity, who many do and should support. Comparing the efficacy of their operations with Fara might tell us more about their respective models than it does the efficiency of their management.

If there is an inherent weakness in their business model however, then I would think that is highly relevant to their customers, donors & supporters. Not to mention their directors

From the directors point of view Its one thing to say we do as well possible under the circumstances, when perhaps they are better off questioning if there a better way of doing things. I.e. a retail model generates 17p per £1, and perhaps that's a pretty good retail result, when whether to stick with a retail dominant model is the bigger issue.

I'd be interested if anyone is able to strip out the retail operations from an oxfam or a trinity hospice type setup. That would validate (or disprove) their claims about how well they run things