Opinion: Donors are not stupid, so give them the facts

Although I have spent years writing about poor, misunderstood charities, I am only now starting to understand why people are persistently suspicious about how their donations are spent.

It's easy to see why people become stuck on this issue when some charities still insist on engaging in what can only be described as a price war, each competing with the other over who can present the lowest fundraising and administration costs, and thereby get the most to the cause. This does nothing but endorse the myth that administration costs are a waste and turns the whole process of giving on its head, with a greater focus on the money that doesn't get to the cause than the money that does.

As part of our market research survey for The Good Giving Guide, 42 per cent of people questioned were concerned about how much money gets to the cause or beneficiaries. And, after putting myself on the donor's side of the fence, I've come to learn that there is a total lack of any accessible information on why charities have to spend what they do.

Most charities accept the need to challenge misconceptions and myths about their expenditure, but most still fail to mount an effective defence of it. Part of the problem is that charities think that their supporters and the wider public wouldn't understand complex messages about costs apportionment.

Even though we were writing a book explaining why charities need to spend money to raise and distribute money, getting charities to talk to us about their spending and administration costs was like getting blood from a stone. Most were simply not prepared to "take the risk" to talk on the record about their policy.

But donors aren't stupid. The research also found that people quickly understood the issues around spending when they were explained to them, and went away with a different attitude. Many had misunderstood what charities spend their money on and agreed with the need to invest in proper systems, staff and long-term fundraising strategies.

Charities need to spend less time shouting about how little they spend and more about why they spend what they do. This is the only way charities can switch the giving debate back to how much goes to the cause instead of how much doesn't.

Annie Kelly is a freelance writer and co-author of The Good Giving Guide

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