This post is written by Dr Triona Fitton, Pears Philanthropy Fellow at the University of Kent.
A recent report published by the True and Fair Foundation (TFF) into income generation in the charity sector has once again brought to public attention the dilemma facing charitable organisations with a retail arm: What are charity shops really for?
The report highlights the low profit margins of charity shops, averaging 17%, with some large charities such as Scope making only a 5% profit margin in their shops; 13% less than high street giant Next, using for-profit retailers as a benchmark for charity shop success. Recommendations for a reduction in charity shop mandatory rate relief (they currently pay 80% less than other high street retailers, with the option for local councils to grant a discretionary 100% rate relief) also suggests that charity shops should not be treated any differently to for-profit shops. The comparisons in the report treats charities as ‘for-profits in disguise’, to paraphrase Burton Weisbrod; where their commercial output is more important than their charitable cause.
The TFF report has been criticised for its misrepresentation of statistics and flawed analysis, with several umbrella bodies and charities featured in the report such as Sue Ryder and Guide Dogs for the Blind speaking out against inaccuracies that undermine the work of their charity shops. Nevertheless, I would argue that the problem with the report goes beyond that of misrepresentation or poor quality research. Crucially, the report has fundamentally misunderstood the value of charity shops.
Firstly, charity shops are an important resource for those on low incomes for everyday items, as well as for second-hand bargain hunters in search of unique purchases. In spite of claims that they are becoming prohibitively expensive, Avril Maddrell and Susan Horne argue in their book Charity Shops: Retailing, Consumption and Society that many charity shops price their goods dependent upon what local people can afford, ensuring they don’t price themselves out of their local market. My own research into charity shops also found that a smaller shop without the pressure of competition within a chain of shops was more likely to price goods down rather than up. Also, haggling prices down or ‘letting people off’ a few pounds continues to occur.
Secondly, a charity shop provides some welcome relief from consumerism and its malcontents. The tendency towards ‘fast fashion’ and the disposal of items before they are at the end of their use is balanced by the donation of these goods to charity. The Giving Something Back report by Demos reports that the reuse of goods sold in charity shops reduce CO2 emissions by roughly 3.7 million tonnes a year – a figure similar to the entire carbon footprint of Iceland. Charity shops are, according to a report by WRAP UK, the most common source for pre-owned clothing in the UK, which goes some way towards reducing the £140m worth of clothing that ends up in landfill each year.
Thirdly, and perhaps most importantly, charity shops are the public face of a charity on the British high street. They raise awareness of smaller organisations that do not already have a high public profile; they work to embed a charity within a community through recruitment of volunteers and involvement in local events; and they provide a friendly, welcoming environment where browsing and chatting is encouraged. They are also a gateway point for entry into the local job market, with people of all ages learning skills and progressing to paid roles through volunteering in a charity shop.
Whilst charities more generally have been subject to a great deal of scrutiny in the past year for their fundraising practices and executive salaries; charity retail has, until now, emerged mostly unscathed. In response to this form of criticism, charity shops have an opportunity to defend the valuable asset they are to society; not only as an income source for charities but as an employability resource, a recycling site and as the ‘kind face’ of the UK high street.