Cut out the middleman

Observations on charities

Next to taxi drivers, second-hand book-sellers understand human life better than any other group of people I know. Their abstract or theoretical knowledge, gleaned from the first few pages of thousands of books, combined with their observation of similar numbers of customers, gives them an unparalleled insight into human affairs. When a second-hand bookseller speaks, therefore, I listen.

I went into my local second-hand bookshop the other day. I think every book ever published has passed through the owner's hands at least once. He remembers them all. One of the greatest regrets of my life is that I didn't buy the memoirs of the Scottish physician to Tsar Alexis from him 30 years ago, but in those days £40 was a lot of money to me. He remembers the book well. I don't remember what I did instead with the £40.

The other day he gave me Oxfam Trading's latest summary of accounts to read. He was simultaneously amused and infuriated. Oxfam shops do not have to pay their staff (apart from their managers), all their stock is given to them free as donations and they are even exempted from business rates. All things considered, therefore, it is a miracle of disorganisation that they make so little profit.

I saw at once what he meant. Turnover was about £65m. Management costs were £5m. Operating costs were £49m. Thus Oxfam made about £11m profit, or 17 per cent, on its turnover. In other words, for every pound's worth of goods the British public gave to one of its shops, Oxfam managed to extract only 17p for its charitable work. Administrative costs would further reduce that figure.

The bookseller, who has struggled for years to keep literary culture alive in an inhospitable environment, argued that those who are charitably inclined and have books to dispose of would do better to sell the books to him and then donate the money directly to a charity of their choice. He would give them more than 17 per cent of the resale value, probably more like 33 or even 50 per cent.

Cutting out the middleman is one of the mantras of the fair-trade movement. I accept it is an age-old and often very nasty slogan that can lead to expulsions and even massacres and ethnic cleansing. It also misunderstands the vital, economically fertilising role of the middleman.

Still, there are middlemen and middlemen. Some are efficient and humane, some efficient and inhumane, some inefficient but humane and yet others inefficient and inhumane. For my part, I don't call a return of 17 per cent on the value of free goods very efficient. So why not follow the second-hand bookseller's advice and sell the books to him before giving the proceeds to charity? Go on, cut out the middleman.