I just had a minor heart attack while reading an article on the Third Sector magazine website reporting that the Office of the Scottish Charity Regulator should publish charities' administration costs. Apparently a market research company Scotinform made the suggestion in an independent report, after surveying members of the public about their views on charity regulation.
As I've blogged before, and as has been eloquently spelled out elsewhere recently, administration costs do not help donors to find the best charities. The best charities are those that use their resources wisely in order to maximise their impact: the number of homeless people who find long-term jobs, children who are happier and more successful, or families who are freed from unaffordable debt. The amount of 'administration' involved in achieving these aims will vary wildly. Donors should look for the impact their money buys, rather than the amount 'wasted' in support costs. (There is also a more pragmatic point: each charity records its administration costs in different ways, so comparisons aren't even possible.)
And OSCR doesn't even publish charities accounts online (unlike the Charity Commission for England and Wales). Reporting on misleading figures like administration costs without publishing the full accounts would do much more damage to the public's perception of charities, and could have devastating impact on excellent charities, achieving great results, which happen to cost a lot money to run.
Wednesday, 29 July 2009
Subscribe to:
Post Comments (Atom)
Posts
1 comments:
(To your blog via Bloggers Circle, just FYI)
Eleanor
This is a useful and timely post. I meant to write something on this whole issue myself, when I saw the following comment from a 'troll' at Iain Dale's site (in response to a fairly irresponsible statement on how 'we all know' that a great deal of aid is wasted:
A lot of aid from western countries is provided as block grants to "charities".
I had a look at one recently.
93% of the money they raised themselves went on expenses - salaries, office rent, computers, fund raising etc. The CEO and CFO took home $AUS378,000 between them - from a charity that took in $AUS2 million in donations from the public per year.
(https://www.blogger.com/comment.g?blogID=6214838&postID=1544854640594045842)
I actually got as far as googling a few of the terms used by the troll to see if I could track down the accounts of the said Australian aid agency, but couldn't find it. However, it's very likely that the salaries/office rents the troll refers to are incurred 'in country' eg. local salaries of development workers.
While the troll therefore displays an antediulvian interpretation of aid work (i.e. real aid is only food/belongings handed over), neither OSCR or the children's charities action you talk of (in your linked post) will do anything to dispel this kind of myth.
At best they lead to a kind of 'race to the bottom amongst charities to show who can display least on the admin budget line, and at worst this can lead to poor, even corrupt accounting practices. It is also wholly out of keeping with the now established (though not acted upon) principles of Full Cost Recovery (Treasury Guidance and all that).
It's odd that the word 'administration' can have such very different connotations when applied to the public sector. Here, 'an administration' connotes a body who's job it is to administer a whole function, and as such there is no negativity associated with it. It seems that only the charitable sector, and those supposed to administer it, are the ones with this hang up.
Post a Comment