A BBC Panorama documentary that raised ethical concerns about Comic Relief's investments had little long-term effect on the charity's reputation, and its decision to immediately divest its suspect assets might have been too hasty, according to the charity's finance director.
In December 2013 Charity Projects, the charity that operates Comic Relief and Sport Relief, said it would review its investment policy in light of criticism of its decision to invest money in arms, alcohol and tobacco, as uncovered by the documentary.
The review, which was published in May, promised that the charity would divest assets from those areas.
The charity's annual accounts, published last month, show that income from investments fell from £6.1m in 2012/13 to £3.9m in 2013/14.
Helen Wright, the charity’s finance director, told a session at the Charity Finance Group’s annual conference yesterday: "The general public are less sensitive to this than we sometimes think."
She said that the charity did market research on public perceptions of Comic Relief before and after the Panorama documentary was broadcast – by February 2014, she said, public sentiment "had rebounded to almost the original position".
Wright, who joined the charity in October 2014, said the research had found that "many people had little or no awareness of the programme". She said that the following month's Sport Relief raised a record amount of money. However, she also acknowledged that Comic Relief's responsibility was not to its own brand only – it had, she said, a collective responsibility not to tarnish the reputation of charities in general.
"The fall was greatest among non-supporters; it reinforced and validated their position," Wright said of the market research. Chief executive pay and administration costs came out as a concern for more people, she said.
The charity's annual accounts show that the charity previously targeted a return of 5.5 per cent on its investments over a rolling five-year period – but under a new policy, this was revised down to 4.5 per cent. "In the current climate we’re very much looking at that as a best-case scenario," Wright said of the new target.
A slide shown during the session by co-presenter Claire Brown, a director of the advisory firm The Elders, who sat on the charity’s investment review panel, said that the changes would probably result in more risk and volatility.
In December 2013, Charity Projects sold all investments it believed were in areas that were raised as a concern in the documentary, roughly 80 per cent of its total portfolio, Wright said.
The charity's accounts say: "Proceeds realised on sale were £3.9m less than the market value recorded in the last accounts, but exceeded historic cost by £14.4m." Brown said: "If Comic Relief could have had a choice and done this more slowly, it probably wouldn’t have chosen to divest, especially in a rising market."
As of January this year, the charity still had £35m left to reinvest.
Ian Theodoreson, chair of the CFG and of that session at the conference, asked why the charity had divested all its suspect assets immediately, rather than waiting for the review to take place. Brown said the charity might have underestimated how long the process of reinvesting might take. Wright said: "With hindsight, it might have been done differently."