Debra Allcock Tyler: Ranking charities by their running costs would be unfair and unworkable

In the third sector, transparency works and comparators don't, says our columnist

Debra Allcock Tyler
Debra Allcock Tyler

In the Oscar-winning film The Social Network, the founder of Facebook, Mark Zuckerberg, is shown as having the idea for the website when his girlfriend dumps him. In the film, he hacks into several university and college networks, downloading photos of female students and getting people to rate them as 'hot' or 'not'.

Leaving aside one's personal view of individuals who engage in such tacky and insensitive activities out of spite, the film seems to assume that we all have the same tastes. It completely fails to recognise that some of us might have a penchant for short, balding blokes with big noses.

This, for me, is akin to the proposal to rate charities against one another, whether by performance, results, administration costs, fundraising spend or any other one of the myriad activities the sector engages in that could be 'measured' or 'bench-marked' or 'league-tabled'.

It simply doesn't work. Comparing one charity with another, by almost any measure, is like comparing classical music with urban pop (don't ask me; I don't know what the latter is either!). It is largely a matter of subjective opinion.

And whose opinion is the most valid? That of the public, who for the most part don't seem to understand how modern charities operate? Or that of the trustees, who know what they need to spend in order to raise the money they need? The media, which seems to me often to have a skewed view of what makes an effective charity? Or the funder, who, if they're any good, will understand how the charities they fund operate?

In 2002, the Directory of Social Change published a book called The Major Charities: An Independent Guide. The sector went nuts, as I recall, accusing the DSC of doing precisely that - comparing apples with pears and balding blokes with hairy hotties. But Luke FitzHerbert, the sadly now-deceased author, made some powerful points about why it is important not to compare. He cited the example of Samaritans, "where all of the charitable activity is carried out by trained volunteers, unpaid, where the financial costs are just those of the administration that makes the service happen. In such cases the ideal may be for administrative costs to be 100 per cent of charitable expenditure."

This is a sensible rejection of the current, often uninformed debate. The idea that administrative or support costs are a waste and do not help the beneficiaries is just silly. We need to stop speaking as if somehow the cost of administering a charity is separate from delivering the cause. The cause can't be delivered without administration, which has a cost. This cost depends on the nature of the charity and its work. And the acceptability of that cost is always likely to be entirely subjective, depending on your level of understanding, engagement or passion for that particular charity. And so it should be.

In our sector, transparency works; comparators don't. Let's not confuse the two. And let's give it up for balding hotties.

Debra Allcock Tyler is chief executive of the Directory of Social Change

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