Podcast Summary:

James Reed: All About Business, Ep. 49 – How to Spot a Charity That's a Red Flag (and How to Give Smarter) | John Spiers
Date: October 27, 2025
Host: James Reed CBE (A)
Guest: John Spiers (B), Entrepreneur, Philanthropist, Founder of EQ Investors

Main Theme & Purpose

This episode explores how individuals—particularly business leaders and philanthropists—can become more effective and discerning charitable givers. John Spiers shares his deep experience in both entrepreneurial and philanthropic sectors, offering practical advice on identifying high-impact charities, understanding new business structures like "philanthropy companies", and getting the most out of charitable efforts, both personally and societally. The episode provides listeners with specific frameworks and warning signs for charity selection, leadership lessons from social enterprise, and ideas for leveraging technology and data for smarter giving.

Key Discussion Points & Insights

1. The "Philanthropy Company" Model (00:00–09:30)

• What is EQ Investors?
  • A wealth management business focused on running with "emotional quotient"—prioritizing long-term relationships and impact over pure profit. (01:39)
• Company Structure as a 'Phil Co' (Philanthropy Company):
  • EQ Foundation (a registered charity) owns ~25% of the business for long-term stability and to reinforce the firm’s impact-driven ethos (03:02–03:51).
  • Pros: Boosts client trust, provides culture of integrity.
  • Cons: Charities as passive shareholders, pressure for regular dividends, inability to inject capital during growth, not suited to all business models (03:55–04:50).
• Market Distinction & Trust:
  • Unique ownership structure helps build—and maintain—deep client trust, a "jigsaw piece" rather than a silver bullet (05:03–05:33).
• Why He Set It Up:
  • Initial idea was annual profit gifting, but found market skepticism ("You must be charging me too much"), so shifted to structural share gifting instead (06:10–06:23).
  • “When something’s new and people don’t understand it, we’re in a world where people often tend to think, well, there’s something, you know, this sounds a bit weird. It’s probably not good.” — John Spiers (06:10)

2. How to Spot and Support High-Impact Charities (08:06–15:03, 19:01–32:33)

• Core Criteria for Effective Giving:
  • Focus on impact achieved, not admin costs or CEO salary.
  • “Far better the charity spends a lot of money employing the best person… than saves money and gets somebody who’s right. So that’s a very important message.” — John Spiers (08:16)
• How to Judge Impact:
  • Tough for donors—no simple balance sheets, outputs not always clear. John compares following expert investors (à la Warren Buffett) to piggybacking on top grantmakers' choices in philanthropy (08:51).
• Use ‘Signalling’ from Grantmakers:
  • If a small charity is backed by trusted organizations (Comic Relief, Esmée Fairbairn), that’s a strong indicator they’ve been properly vetted (09:02).
• Red Flags & Board Structure:
  • Chequered governance (e.g., same board for years, poor diversity, persistent late filings, deficits) should trigger deeper scrutiny (21:27–22:36).
  • “If you’re consistently running deficits or if your income’s declining…you need to do a little bit more digging.” — John Spiers (21:47)
• Data Limitations and Digital Transparency:
  • Charity sector data is poor; John advocates for better digital reporting, even proposing a small filing fee to fund improvements (23:09–23:31).

The Giving Is Great Platform (19:01–24:37)

• Designed to help sort through 200,000 UK charities by aggregating grant data, financials, and governance to visualize which ones are supported by major funders and spot governance/financial red flags quickly.
• “I went to the Charity Commission search engine… it wasn’t even as easy as getting a needle in a haystack.” — John Spiers (19:36)
• Giving Is Great also flags high reserves, persistent late filings, and provides insight into board composition.

3. John’s Charitable Focus and ‘Impact Overhead’ (10:39–13:53, 35:21–37:19)

• Personal Focus Areas:
  • Early years (first 1,000 days of life) for brain development and breaking cycles of disadvantage.
  • Environmental causes, especially initiatives to extract CO₂ (“...it could be transformative. Worth a go.”) (12:22)
• On Overheads and Reserves:
  • Don’t obsess over admin costs; a well-paid capable CEO may deliver more impact than a frugal one.
  • Be wary of charities with excessively high reserves—though ‘excess’ is nuanced for fast-growing organizations (36:09–37:19).

4. Barriers to Giving & Sector Challenges (23:43–34:57, 39:11–40:13)

• UK wealthy are surprisingly poor givers: Most give little because they don’t know how to judge charities or lack confidence; fundraising is often off-putting (“They don’t know how to give. They lack the confidence…”—24:38).
• Market Dysfunction:
  • Unlike businesses, weak charities can persist due to lack of “Darwinian” pressure; thus, the best need to be actively supported and signposted (28:17).
• Uneven Government Funding:
  • Tends to go to larger national charities, often bypassing the most dynamic local organizations.
  • John advocates for match funding (“I think the government funding should always be provided on a match basis.”—34:01).
• Data & Structural Reform:
  • Calls for modernizing Charity Commission data categories (e.g., distinguish ‘teenagers’ from ‘children’), and for consultative reform involving data users.

5. Practical Tips for Smart Giving (37:19–53:33)

• For New Donors:
  • Clarify your preferred beneficiaries (e.g., teenagers, early years), then use Giving Is Great to find charities already backed by reputable funders.
  • Review impact reports—but beware: most are “output reports” describing activity, not actual life changes or outcomes (41:18–41:33).
  • “The better ones will [publish proper impact reports]. …You’re never going to find 100% perfect data that proves beyond all doubt this charity is achieving incredible results. Eventually you’ll have to make a subjective judgment.” — John Spiers (42:00)
• Leadership in Charities:
  • Assess for strong, ambitious, credible leadership, ideally with commercial experience (45:20).
  • Meet the CEO and test for ambition and proper governance (46:04–47:43).
• Culture, Volunteers, and Fundraising:
  • Managing volunteers requires subtlety; fundraising is a perpetual challenge and “always raising more funds … it never ends.” (50:02–50:20)

6. Motivation, Reward, and the Joy of Giving (51:36–55:03)

• Giving Beyond Money:
  • Skilled volunteers—particularly from professional backgrounds—can add immense value to charities struggling with operational issues (53:19).
  • “The most important thing is… when you’re giving money, or it may not be money, it may be time or it might be skills, it’s incredibly rewarding when you can see how that it’s being effective…it’s probably the best feeling that life can give you.” — John Spiers (51:36)
• Personal Takeaway:
  • John’s motivation is not just altruistic, but personal satisfaction: “Overall, if I wasn’t getting something emotionally out of this, I wouldn’t be doing it.” (53:46)
  • On getting up in the morning: “I’ve always got a to-do list and I wish I didn’t, but I do. So that’s what gets me up.” (54:52)
  • Five-year hope: “Still above ground…still able to meet new people, learning new things, trying out new things myself.” (55:13)

Memorable Quotes with Timestamps

• On focusing on impact over overhead:
  “What you definitely don’t want to ask is how much they’re spending on overheads, how much does CEO get paid. Evidence…shows that at best gives you no reliable answer and at worst gives you the wrong answer.” — John Spiers (08:16)
• On following the lead of expert grantmakers:
  “If I find [a charity] in my preferred sector and it’s already being backed by, say, Comic Relief and Esmée Fairbairn… that’s going to give me some encouragement.” — John Spiers (08:51)
• On struggles with charity data:
  “The charity sector is pretty broken… Most people don’t know how to give…they lack the confidence.” — John Spiers (23:55)
• On leadership:
  “For me, that’s the number one thing… We will not support in a significant way any charity that we don’t have high-level confidence in the senior leadership.” — John Spiers (45:20)
• On the reward of giving:
  “It’s probably the best feeling that life can give you.” — John Spiers (51:36)
• On data reform:
  “If you and I turned up there tomorrow, I think we’re getting this sorted pretty quickly. But then, you know, I don’t know. I know I’ve always been a bit over ambitious about my own view of my, my abilities, but, but I think Microsoft’s a better idea.” — John Spiers (43:21)
• On what gets him up in the morning:
  “I’m a lark, not an owl… I’ve always got a to-do list and I wish I didn’t, but I do.” — John Spiers (54:52)

Important Timestamps

• 00:00–03:51: Introduction & EQ Investors’ structure
• 04:50–09:30: The rationale and lived experience of running a ‘philanthropy company’
• 08:16–09:00: Why impact, not overheads, is the key measure for a charity
• 19:01–23:43: The origins and value of Giving Is Great
• 23:43–24:37: Why so few wealthy people give, and how to remedy it
• 36:09–37:19: How to read charity reserves and financial health
• 45:20–47:43: Assessing leadership in the charity sector
• 51:36–53:53: The personal joy and fulfillment gained from philanthropy
• 54:52–55:13: Quick-fire Q&A (motivation and future)

Key Takeaways

• Smart Giving: Don’t fixate on admin costs; seek evidence of real impact and judge charities as you would any important investment—by leveraging expert research, grantmaker endorsements, and careful due diligence.
• Structural Innovation: Models where charities own equity in for-profit businesses can embed long-term purpose but are not a one-size-fits-all solution.
• Data & Transparency: Better digital information and sector transparency could massively improve donor confidence, but currently remains a bottleneck.
• Personal Motivation Matters: Philanthropy is emotionally rewarding—seek charities where your time or money has visible impact and consider offering your professional skills as a volunteer or advisor.

For Further Learning

• Explore Giving is Great for data on UK charities.
• Consider B Corporation certification and philanthropy-linked structures for impact-driven businesses.

End of Summary