The latest edition of the Charity Brand Index, our annual publication looking at the best-recognised charities in the UK, reveals the depressing statistic that a quarter of the general public think that only around 40-59 pence in every pound given to charity “reaches or helps the cause”. A further 17 per cent think it’s less than that.
In part we’re at fault for asking such a silly question. All money given to charity is spent with the intention of helping the cause. When you give cash to Oxfam, it’s not as if it spends some on helping starving Africans and throws the rest on the fire. All of its cash goes, one way or another, on helping its beneficiaries.
Donors know that, I suspect. But what they are actually thinking is only slightly less corrosive. They are imagining, no doubt, that 40-60 pence in every pound gets “wasted” on fundraising, administration and back office services that don’t directly help beneficiaries.
This is a useless distinction, because it encourages charities to spend money on the wrong stuff. Charities should be free to spend their cash on whatever they think secures the best result for their beneficiaries, whether that’s paying the rent, or updating their IT infrastructure, or paying their chief executive, or providing immunisation, or counselling depressed children, or building a barn for a donkey.
What slender evidence there is suggests that charities with higher administration costs get better results. This makes sense to me, because hiring people to do things is expensive, whereas buying computers, or setting up systems to make sure they’re doing the right things, in the right places, is relatively cheap.
As a result, as a donor I’m always inclined to say: “Here’s my tenner, I trust you, spend it on whatever you think is best,” because a charity knows more than I do about whether that cash is being used effectively.
But evidently most people don’t agree with me and think charities waste a lot of their cash and need to be watched like hawks (though remarkably, despite this, they still seem happy to give).
This misconception is a longstanding problem for charities. Most donors haven’t got a clue what charities spend their money on, so when they’re asked a question like “When you donate to charity, how much do you think actually reaches or helps the cause?” they pick a number almost out of the air.
I would like to see the charity sector address this head-on. It’s about time someone started explaining to the population how things actually are in the world of charities. The public are not stupid – they’ve just not spent much time thinking about it. If you tell them the truth, they’ll get it.
It should be an easy enough sell, really – the sector hasn’t got much to hide, and charities are actually much more efficient than people think. Why not say so?