Oxfam sex scandal wiped £400m from brand valuation, report reveals

Oxfam's prostitute scandal in Central America has eroded the value of its brand in the UK by hundreds of millions of pounds, PRWeek can reveal.

A new league table, which ranks the top 100 most valuable charity brands in the UK, has placed Oxfam at seventh, with a brand value of £541m. This is marginally higher than Comic Relief (£537m), but well behind sixth placed British Red Cross (£767m) and top brand Cancer Research UK (£2.32bn) (see the top 15 below).

The valuations are worked out by blending audited financial fundraising data with brand sentiment data (known as BrandVue) from research and brand consultancy Morar HPI, which produced the report.

The report highlights that a charity’s brand can play an important role in its fundraising activity, particularly in driving new donor acquisition, and some charities are more vulnerable to the impacts of brand erosion than others. Like consumers, donors are increasingly taking decisions based on whether a charity lives up to its values.

A year ago, Oxfam's reputation plunged into crisis after a Times investigation discovered that senior employees had regularly paid local prostitutes for sex in earthquake-struck Haiti in 2011.

The NGO, which tackles global poverty, was then accused of a cover-up after failing to report the findings of an internal investigation to regulators, leading PRWeek to choose the Oxfam crisis as one of the eight biggest PR stories of 2018.

Morar HPI senior director Julian Dailly told PRWeek the Oxfam prostitute scandal had battered the charity’s ‘brand strength’, which in turn wiped hundreds of millions of pounds off its valuation calculation.

"Oxfam is among the top 10 brands, yet its brand strength is far below the average for the top 10 – only scoring 31 out of 100," Dailly explained.

Exacerbating the problem, the role of Oxfam’s brand strength to generate income is relatively higher than several of its top 10 rivals, the report found.

"If Oxfam’s brand strength was at its historical norm, in the region of £400m would be added to the value of the brand, bringing it well within the top five," Dailly said. "We hope Oxfam is able to recover by the next year’s table to be able to show this relationship clearly."

In response to the findings, an Oxfam spokesperson told PRWeek: "We are committed to regaining the trust of the public and delivering on our mission to tackle the root causes of poverty and create lasting change."

How other NGOs fared

Other charity brand values that were lower than expected at the time the report was produced include Save The Children and UNICEF, which have also been dogged by allegations of sexual harassment and inadequate internal procedures to investigate and address complaints.

Save The Children ranked 13th with a brand value of £436m, while UNICEF was listed at 20th, with a value of £341m.

Dailly estimates recent scandals wiped "tens of millions of pounds" off their brand valuations.

Like Oxfam, the brand strength scores for these charities were relatively low, with Save The Children achieving 42 and UNICEF 41.

Dailly said that while the number of scandals in the past year have eroded public trust in the charity sector, not all charity brands are equally impacted.

"The stronger brands by definition are more resilient," he said. "The league table shows that the top 20 brands, maybe even the top 10, have become far better at marketing and branding than the wider market and consequently have attracted a disproportionate share of donations."

Some charity brands are even prospering. The report found higher than expected brand values for Comic Relief (£537m with a brand strength of 50) and Royal British Legion (£494m with a brand strength of 55) – the latter benefitting from last year’s centenary for World War One.

Thumbnail image ©Berofoto via Flickr

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