HOT ISSUE: Should charities be ranked according to the cost of their fundraising?

LUKE FITZHERBERT, co-editor of The Major Charities from the Directory of Social Change

A crude ranking of the fundraising costs of different charities, without any context, is not the best way of making them public. In our new book, The Major Charities, we give detailed figures but no rankings and we try to explain each charity's situation, especially when it is unusual. Ideally. this explanation comes from the charity's annual report, but in many cases no explanation is given, even when high levels of costs are disclosed in the accounts.

CAMPBELL ROBB, director of public policy at the NCVO

There is a need for voluntary organisations to begin to show the relationship between what they are trying to achieve and what they spend. However, crude league tables, such as those used for schools and hospitals, could never take into account the individual characteristics of all the different organisations that make up the voluntary sector. The NCVO hopes that its work with other other voluntary sector organisations will encourage the development of meaningful performance indicators.

JOHN NAYLOR, chief executive of the Carnegie UK Trust

The cost of fundraising is an important element in assessing charity performance. But transparency about the way funds are raised is also crucial. In particular, when charities use third parties to raise funds, it is vital to be clear about the nature of the relationship and the costs. There is also a danger in simplistic league tables, for example, what is the time scale? Putting in a mailing system may be expensive in the short-term but should pay off in the long run. And fundraising via legacies can have up to a seven-year payback.

STEVE JONES, director of communications for Help The Aged

Ranking charities by the cost of fundraising is meaningless to donors unless done on a fully transparent comparative basis. The most effective measure is how many pence in the pound go on providing services to and for the charity's target group. But a donor will be more interested in giving to a particular charity of their choice based on what that charity does and the most cost-effective way of giving. This can only be provided through open communication and via, for example, an annual review.

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