Oxfam Unwrapped is a kind of gift catalogue from which you can ‘buy a goat’ or various other items as a gift. A goat costs £25: you give Oxfam £25, which it uses to provide a goat to somebody in a less developed country, and in return Oxfam gives you a card picturing a cheery-looking goat to give your friend. Jolly good.

Your £25 appears to be ring-fenced (‘restricted’ as the charity-wonks say) to buying goats. In fact it isn’t, for this good reason. Theoretically, each of the 50m adults in the UK could ‘buy a goat’ tomorrow, and it would be just crazy if Oxfam suddenly rained 50m goats onto the unsuspecting communities it serves. So, sensibly, Oxfam’s small-print says that your £25 will go to ‘either your chosen gift or something else in the same category.’ (Goats are in the ‘livestock’ category whereas ‘training a teacher’, for example, is in the ‘education’ category, amazingly enough.) ‘This kind of flexibility means that poor communities worldwide can get exactly what they need if and when their circumstances change’ Oxfam says.

You can go one better. You can remove the ‘restriction’ altogether by ticking a box at check-out which says: ‘I am happy for Oxfam to use my money to fund any part of its work.’

‘Unrestricted’ donations are almost invariably the best way to give to a charity. They allow responsiveness, allow the people who are actually receiving the money a real-time say in what they get, and can be used by the charity for what is actually needed at the time, rather than what was needed when the goat-catalogue was printed.

Charities say that they’d rather have £660,000 unrestricted than £1m restricted. That is, making the donation unrestricted – ticking that box – magically increases the usefulness of your donation by half. Half a goat for free.

This sounds like some dull technicality. But the difference on the ground is real, normally because restricted donations create complicated accounting and faffing about at headquarters, which itself costs money – eating up roughly the missing £340,000 in the example above.

Some charity ‘gift catalogues’ don’t even offer this option. The Good Gifts Catalogue, for example, says that ‘your money buys the gift described… we guarantee it’. Even if it’s no longer needed or the recipient community has enough of those items already or something else has become more urgent since the catalogue was printed? Isn’t it important to give communities – anybody – the right to some control over their life in real-time? They get that much more if they can influence decisions to respond to changing circumstances.

‘Tis the season to be flexible: always.

(Unfortunately when the FT reported this story, it got it wrong, describing the reduced restriction as ‘marketing bull’. At least it correctly represented my view about it!)

[Source: for the £660k/£1m: Garvey, B., Sutherland, L., 2006, ‘Restricted and project funding survey, nfpSynergy’, p. 7]

How do you find out whether a charity is achieving anything?–>