Mail on Sunday publishes critical story about running costs at leading charities

The article says that 10 of the UK's biggest charities collectively spent £225m on support and governance costs. However, the charity sector has strenuously denied that it wastes donors' money

Leading charities have defended how much they spend on chief executive pay and back-office functions after an article in The Mail on Sunday criticised their running costs.

The MoS article said that ten of the UK's largest charities spent more than £225m on support and governance costs in their most recent accounts.

The article said that two charities, Marie Stopes International and Save the Children International, said that 100 per cent of their expenditure went on "charitable activities", even though both pay their chief executives more than £200,000 a year.

Last month, Third Sector exclusively reported that the MoS was believed to be working on a critical story about charities’ expenditure. Third Sector understands that the MoS made a number of amendments to its planned story after charities criticised its interpretation of the figures.

The article quoted Gina Miller, who has campaigned for charities to be more transparent about their costs, calling for a shake-up of charity sector accounting rules.

Miller said in the article: "Well-run charities, like any organisation, need to spend money on running their operations in an effective and efficient manner. But I believe it is misleading to donors to roll up all these costs. It is clearly absurd that charities are allowed to hide large elements of their costs within their disclosed charitable spending number."

"If a charity receives £100 and after overheads £50 is available for spending on the genuine end charitable activities, donors should be told this rather than misled."

It also quoted the former Liberal Democrat minister Lord Wallace of Saltaire, who worked on reforms to the Charities Act 2016, saying that it would be far better to separate out support costs and staff costs from charitable activities.

"Then you get a sense of what proportion of their income is needed to cover support costs," he told the MoS. "If it's only 5 per cent, they're doing incredibly well. If it's 10 per cent, that's probably normal. If it's up towards 40 or 50 per cent, there is something definitely wrong."

The MoS said in the article that it analysed the accounts of Britain's ten largest mainstream charities by income: Save the Children International, Save the Children UK, Cancer Research UK, the National Trust, Oxfam, the British Heart Foundation, Sightsavers, Barnardo's, Marie Stopes International and the British Red Cross.

Of the ten, the National Trust recorded the highest "support service" cost. The MoS said that £61.9m of such expenses were included in charitable spending of £533.7m. This included expenditure on governance, human resources, legal activity, IT, administration and finance.

However, a National Trust spokesman told the MoS: "Every year we spend millions of pounds protecting nature and historic places. We simply wouldn't be able to do this without our support systems that allow staff and volunteers to do their jobs, as well as ensuring visitors have the best experience."

A spokesman for Marie Stopes International told the MoS: "We are committed to transparency, which is why we also publish a clear and detailed breakdown of our income and expenditure in our annual report, free to view at the Charity Commission website and our own."

The National Council for Voluntary Organisations also defended the spending by charities, telling the MoS that they were merely following the Charity Commission's rules.

"Charities spend prudently on things like IT or office costs, but can't do their work without them," the spokesman told the MoS. "They follow approved accounting standards and provide full details of their support costs in their publicly available annual reports."

A spokeswoman for the Charity Commission told the MoS that its annual return "requires more information than ever before, including chief executive pay". But she added that it would be reviewing in the coming year what information charities should submit and how this could best be displayed.

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