Guide to donating to charities

How much of your donation is gobbled up by fundraising fees and expenses?
 
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02.CHOICE member survey

In late 2007 we surveyed our members about what was important to them in a charity. The results from the 240 respondents are shown here.
Whats important graph

What CHOICE readers said

Survey respondents were also given the chance to make comments, some of which are shown below.

  • "There seems to be a lot of competition for our dollar, with very little information available on costs and effectiveness."
  • "All charities require finances for administration, running costs — it’d be naive not to think so."
  • "I will not donate to charities unless I know how the money is split and what their overhead cost percentage is."
  • "All charities should have an easily locatable ratio of admin and frontline delivery costs."
  • "It must be acknowledged by donors that charities have operating costs and that these need to be funded from somewhere. I suppose all donors want is reassurance that a significant percentage of their donations do go to charitable causes."

The charities respond

Many charities CHOICE contacted acknowledged that the lack of financial accounting standards is a problem for the sector and its donors. Here is a sample of their comments. (Note that some respondents didn’t want to be identified.)

  • "Figures can be manipulated and misconstrued to paint the charity in a positive light."
  • "There can be clever accounting used by charities — it’s all very legal — that shows their fundraising costs as being minimal."
  • "There’s no benefit for charities in reporting their cost of fundraising accurately. There’s no benefit for charities in being transparent — they’re not rewarded for this."
  • "Charities pluck numbers out of the air for their fundraising costs. There’s no agreement about what constitutes administration costs. Some will say it’s only the people in your fundraising department. Others might include IT, HR, marketing departments ... there’s no consistency."
  • "Most people give with their heart and not their head. They should give with both. But it's hard to get the transparency and information that you need." — Pro Bono Australia.
  • "If we are to continue to receive donors' support we must be consistent and more transparent as a sector." — Charities Aid Foundation
  • "Until donors become more demanding about knowing where and how their money is spent, charities will not have a strong incentive to improve their transparency and accountability." — Givewell
  • "The cost of fundraising is open to interpretation by charities. There should be complete visibility of fundraising costs for donors. They should be able to know how much of their donation reaches the cause. It should be available on a website for free, like in the US." — Movember Foundation
 

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