Fundraising costs and how to measure them have become an obsession in the sector. Hours have been dedicated to working out exactly how much of every pound organisations spend on fundraising, and if it should be measured at all.
Charities Aid Foundation (CAF) research claims that fundraising costs are low and there is nothing to worry about. Fundraising costs were 8.8 per cent of total income in 1999 to 2000 and have been fairly steady over the past 20 years. Admittedly, using different methodology shows fundraising costs among the top fundraising charities to be far higher.
When the Directory of Social Change launched The Major Charities: An Independent Guide, there was an outcry that the book would allow journalists and the public to draw up inappropriate league tables and donors would be put off giving to some extremely good causes.
But the question is not really about whether fundraising costs are too high, but rather if charities have become too concerned about it. Donors may not be as affected by fundraising costs as the current debate would lead us to believe. One-off donors are unlikely to know how much a charity spends on fundraising and administration every year. And long-term donors want to know what the organisation is achieving.
Intangible results are the hardest to measure so organisations struggle to show donors their methods and achievements. Many organisations are starting to use annual reports to show supporters their hopes, successes and even their failures.
Transparency is key. If information is readily available, charities can stop worrying about the impending danger of league tables. A dedicated supporter will continue to give to an organisation which has a year of high fundraising costs as long as they know about the campaign the money has been spent on, and what it hopes to achieve.