Charities may soon be obliged to divulge how much of the money from donors is being spent on the cause and how much is going on such items as executive salary, public relations, human resources, staffing and IT, lumped together as “support and governance” costs. In many cases these expenditures are hidden in a gross figure for “charitable spending”, or under “fundraising”. The net effect is to persuade donors that charities are spending more of their income on front-line services than they actually are.
Following a recent expose in the Daily Mail newspaper headlined ALL IN A GOOD CAUSE? there have been calls for changes in the way that charities are allowed to report their expenditure, to give donors a better idea of how wisely, or otherwise, their donations are being used. A table of “support and governance” expenditure of the UK’s top ten charities showed that the National Trust spent £61.9 million, Save the Children Fund spent £42.9 million, Oxfam spent £33.9 million, Save the Children International spent £28 million and Cancer Research spent £18.4 million, followed by British Red Cross at £17.2 million, Marie Stopes International at £13.2 million, British Heart Foundation at £4.2 million, Sightsavers at £3.8 million and Barnado’s at £2.3 million.