London Marathon – Dispatches FAQ – Why does 25p in the £ earned by The London Marathon Limited go to charity?

Why does 25p in the £ earned by The London Marathon Limited go to charity?

In fact it is 100% of the profit that goes to charity. The London Marathon Limited which puts on the London Marathon and other events is not and never has been a charity. It is a trading company like any other trading company. The only difference is that it is owned by The London Marathon Charitable Trust Limited and all of the profits go to the Charitable Trust.

Virtually every major charity in Britain has a separate trading company. Just like with them the whole of the profit of our trading company goes to charity but only after the costs of putting on the event which include costs such as the expense of toilets, barriers, venue hire, staff, rent and all of the other costs of every year staging 5 world class events, and putting on Britain’s largest consumer fitness show.

Trading subsidiaries of charities do not hand over 100% of their turnover – just their profits. An equivalent sized trading subsidiary of a charity as an example is Oxfam Activities Limited which last year had a turnover of £17.9m and made a £1.8m profit. The London Marathon Limited made a profit of £4.45m on a £17.8m turnover.

In fact, the London Marathon is the most profitable mass race in the Europe and probably the world and, thanks to the foresight of the race founders, all of this profit goes to charity.

The London Marathon Limited stages what is widely recognised as the world’s greatest marathon and this is what attracts people to take part and hence they raise over £47 million per annum for charities.

The London Marathon Limited has 25 full time staff and over 640 paid temporary staff by the time of race day. Its salaries are based on what the market rates are for other major sporting events and the glib comparison made by the programme with charities salaries is unfair and completely irrelevant. The London Marathon Charitable Trust has no employees at all. The amount of pay that the top paid employee received included a one-off bonus for finding and securing a new sponsor without using a sponsorship agency which saved the Marathon (and hence the Charitable Trust) over £3 million over the life of the sponsorship.

We would also point out that in the months that we have been asking the programme makers to detail their allegations they have never put to us any complaint about the amount of salaries nor the level of costs of the Event. Had they done so, or taken up any of our repeated offers to meet or even returned our telephone calls they would have had full explanations and then not made the fundamental errors that they have.

As it is, we wrote in great detail to the programme makers answering fully the few points they did put to us but the programme has largely ignored everything that we said.

The way in which the programme has been promoted in regard to this issue is in our lawyers’ view clearly defamatory and untrue and they have already written to the programme’s PR company threatening to sue for libel.

What about the money that the runners raise for their own charities?

The money that runners raise for the charities that they choose to run for goes directly from the runner to those charities which get 100% of the money raised by them. Between them last year the runners raised £47.2m and all of that money went directly to the charities without any of it coming to the London Marathon.

Why does the London Marathon not reveal more information about its costs and grants?

It is complete and utter nonsense to say that our accounts lack “transparency”. Channel 4 has seen the letter from our auditors who have confirmed to that our accounts fully comply with all regulatory standards and requirements. The last filed accounts for the Charitable Trust ran to 30 pages and in addition the last filed accounts of The London Marathon Limited ran to a further 16 pages.

The London Marathon accounts drawn up for directors have a complete line by line breakdown of all of the expenses incurred in staging the world’s greatest marathon and all of our other events and these are seen by Directors who include representatives of the City of Westminster, City of London, London Councils, Mayor of London and UK Athletics. In addition our directors include very experienced independent appointees. Our accounts are subject to a level of scrutiny that no other running event in this country has to go through. Indeed it is difficult to think of any sports event in the United Kingdom that has so much externally appointed scrutiny of their accounts. What is particularly striking is that so many of our directors are nominated by democratically accountable organisations.

On the programme, Kate Sayers said we have to be accountable to our “stakeholders” and, as set out above, that is exactly what we are.

The amount that we spend on individual elements of the costs of staging the event is highly confidential and commercially sensitive. For instance, we have detailed negotiations as you would expect with all of our suppliers. If we were to reveal the amount that we pay to them it would damage our ability to get the best deals by having competitors compete for our business. In many cases we are also bound by contractual confidentiality provisions.

We also note that Channel 4 when asked under a Freedom of Information request refused to give any information about the how much they have made from the sale of advertising to charities.

In refusing to give the information Channel 4 said “we…consider that the information requested is highly commercially sensitive” and that “it could severely prejudice Channel 4’s ability to secure the sale of advertising airtime to such advertisers at competitive rates in the future”.

We are also concerned to note that the company making this Dispatches programme has what appears to be a conflict of interest. It is part of Ten Alps plc and a division of that company, Ten Alps Creative, is a direct competitor of realbuzz.com (our Online Partner) in the provision of website services. As its own website reveals, its services include Website Design, Website hosting and Website Build Architecture and Content Management all of which are services that Realbuzz.com provide to the London Marathon. One of the questions asked by the company was how much Realbuzz charged us for these services. Ten Alps also has a thriving business selling advertising for charities – just like Realbuzz.

Channel 4 also ignored all of the work we do to publicize the grants that we make. For instance, every local paper gets details of all of the grants made in their areas and we put out a press release giving details of every grant that is made or has ever been made. How can that be said lack transparency?

Is it right that the London Marathon sells advertising packages including entries?

The London Marathon publishes a range of different magazines and also sells advertising on its web pages. Our customers have a number of different options of how to spend their advertising budget and we are operate in a highly competitive market against titles like Runners World, Running Fitness and of course internet advertising channels like Google.

Many charities have told Channel 4 that our packages represent good value and of course if some charities do not agree then they have many other options of where to advertise.

As an example, Nick Barrett, Chief Executive of The Outward Bound Trust told the programme makers, “The Outward Bound Trust has a number of choices of where to advertise and chooses the London Marathon packages because in our experience they are effective and offer good value”.

Very few entries are used to support our advertising sales and, as Channel 4 have been told by many charities, the reason that charities buy advertising packages is not normally based on getting access to entries but in order to attract runners, either with their own places or without, to run for that charity. There are a range of packages available many of which do not have any places attached to them.

Of course Channel 4 did not tell the viewers that this is what charities were saying since they did not allow anyone on to the programme who had anything positive to say.

We gave them examples of how our magazine advertising packages in fact compared favourably with other rival publications.

Could the London Marathon not reveal which charities have how many entries?

Each year over 600 charities have entries in the London Marathon directly from us. In addition hundreds of other charities benefit from having runners with their own places run for that charity. We do not know who the tens of thousands of runners with their own places are running for as that is solely between the runner and their choice of charity.

We do of course know who we issue places to and we cannot tell people how many entries they each get without their permission. It is interesting to note that of the 172 charities with golden and silver bond entries contacted by the Programme only 12 were prepared to say how many places they had. We cannot be criticized for not revealing what the charities themselves do not want disclosed.

Is the London Marathon Charitable Trust slow in giving out grants?

This is a ridiculous suggestion. We have a very good record of paying out very quickly after grant conditions have been met. The London Marathon Charitable Trust prides itself on the speed in which it makes grant awards. Last year for instance, the Trustees made their awards less than 3 weeks after the money became available to them. Sometimes we have to act even more quickly to save playing fields that are under threat.

After grant awards are made, we usually then pay out within a maximum of 6 weeks after grant conditions are met and often much sooner.

Obviously we have to wait to pay out until grant conditions are met and this sometime takes time as recipients need to commission the work and sometimes get planning permission.

Our trustees over the years have included some of Britain’s most experienced grant makers and we currently have the Chair of Sport England and the former Chair of Sport England as trustees. Our standards and approach to grant making is fully in line with best practice.

The London Marathon Charitable Trust also must have the lowest running cost of any charity in Britain. 100% of its receipts are used for charitable purposes and it (as opposed to the trading subsidiary) has no costs or expenses.

As to the suggestion that it is unusual for charities to give grants to Council, that is completely untrue. Many of the projects that we have contributed towards have had other charitable funders including the country’s largest sporting charity, the Football Foundation. A good example of that is the announcement we made recently of our funding for a London Borough of Hackney project at Hackney Marshes in which the Football Foundation is a co-funder. In its last financial year alone, the Football Foundation made numerous grants to Local Authorities each in excess of £100,000 and cumulatively worth £15.5 million as well as many smaller grants.

Why is Channel 4 attacking the London Marathon?

This is really a question for Channel 4 but it should be noted that as a result of a previous Dispatches programme, the founders and the London Marathon sued Channel 4 and in 1995 Channel 4 settled the action by agreeing to pay costs and damages totaling over £1 million and by broadcasting an apology which in part said:-

“We now accept that the programme contained allegations which were wrong and should not have been broadcast and we apologise to Mr Brasher, Mr Disley and the London Marathon organisation”.

Channel 4 also undertook to the Court not to repeat the allegations.

We also note that only earlier this week another Channel 4 programme (Starsuckers) attacked another much loved charity, Band Aid/Live 8, an attack which drew a stinging response from Bob Geldof.

In the past Dispatches programmes have attacked Mother Theresa and Lord Coe so perhaps we are not in bad company.The programme makers, Blakeway Productions, promotes its links with Blakeway Koimbi School Trust, a registered charity which supports a secondary school in Kenya. Established in 2004-2005, the Trust has properly submitted returns every year since. However, according to the Charities Commission records, since 2005, it has donated not a penny to its charitable cause.

In 2005, its charitable income was a princely £3,100, while its costs were £3,018, leaving a surplus to go to charity of £82. Maybe that's where Blakeway got the idea of investigating the London Marathon.

What about Patrick Cox of Male Cancer Awareness Campaign calling the distribution of places to charities unfair?

There are over 180,000 registered charities in Great Britain and we obviously cannot satisfy the demand from all charities. Charities have rallied to support the London Marathon and its distribution system.

Jo Dyson, Chair of the Event Managers Forum an Institute of Fundraising Special Interest Group, said, "The London Marathon is one of the most important days in the fundraising calendar for thousands of charities. We recognise that the London Marathon can never satisfy all of the demands from charities and the public for places and believe that in balancing the competing demands it has made the distribution of places as fair as can be in the circumstances."

As long ago as August 2006 we told Patrick Cox that his charity could have a Silver Bond and in fact wrote saying “I urge your charity to apply as soon as possible”. He failed to do so and you would have to ask him why he fails to take up the opportunity of a Silver Bond place. He does not seem to be reluctant to explore avenues for fundraising normally and even has publically said that his charity would take money from the British National Party.

Abi Crawford, Managing Executive of the Multiple Sclerosis Resource Centre said, “We know that charities without bonds want places but we find it hard to understand how they can justify wasting further charity resources in constantly trying to get the current Gold Bond system over-turned. What these few complainers are trying to do could potentially damage charities such as ourselves who have worked hard to make the Gold Bonds a success.

For charities, fundraising success does not lie solely within obtaining Gold Bond places. Any organization that is truly passionate about its cause and strongly believes that it is providing a worthwhile service will find innovative ways to fundraise and not merely rely on a Gold Bond place for their income.

It is sad that the spirit and ethos of the London Marathon is being challenged by those who it would appear; lack the ingenuity to find other ways to fundraise effectively.”

The vast majority of runners in the race have their own places, not via a charity, but 78% of them choose in any event to run for the charity of their choice. This means that every year all charities have an equal chance to try and persuade some of these tens of thousands of runners with their own places to run for them.

What about what Mike O’Reilly had to say?

Mike O’Reilly has a long history of antagonism towards the London Marathon. For example, in 2007 he threatened to sue the Royal Parks for giving permission to London Marathon for it to hold an event in one of the Royal Parks.

He wrote to the Royal Parks in August 2007 saying:-

“If this permission is not withdrawn then I will take all necessary legal action via my lawyers Mischon de Raya to prevent the event taking place on The Mall and Birdcage Walk including if necessary a High Court Injunction.”

If anyone has tried to block other races in London it is therefore clearly Mr O’Reilly.

Examples of his vitriolic statements are readily available and it is very sad that Channel 4 and Blakeway are prepared to give credence to this misguided individual. Over the years, there have been many complaints about the lack of standards of Mr O’Reilly’s race. Indeed one disgruntled runner even set up a website called British10kcomplaints.org. Many of the complaints about the race can be read on runnersworld.co.uk. Rather than continually attacking the London Marathon perhaps it would be better if he concentrated on improving the standards of his own event.

The City of London and City of Westminster have both concluded that they will not allow any new road races because of the amount of road closures for events that have already been granted. It is of no surprise to us that Mr O’Reilly has been refused permission under this policy since the London Marathon has also been refused permission for another event on the roads of these local authorities. The City of Westminster said:-

“…the use of streets in Westminster remain pressured and we are unable to consider a new road event at this time”.

What do runners and the charities think about the programme?

We are delighted by the support that we have received from runners, charities and others. We have been inundated with messages of support from people and groups attacking Channel 4 for their irresponsible reporting. Many of the social media sites have also had similar messages.

Perhaps the last word should go to another great race, the real,- BERLIN-MARATHON whose Race Director Mark Milde said,

“We find it quite unbelievable that the London Marathon is being attacked for “only” making a profit of 25% all of which it hands over to charity. The London Marathon is the envy of the running world and has established a benchmark that others aspire to. We know of no other race that makes such a high net margin and the fact that it is all handed over to charity is a fantastic advertisement for Britain. To have such a charity involvement is beyond imagination for Berlin."