Charities 'held together by sticky back plastic'
The UK is concerned about how much charities are spending on administration, but the chief executive of a company that advises donors on the best way to spend their money insists "it's a poor way of judging a charity's effectiveness".
"Looking at administration costs is a very, very crude and frankly meaningless way of assessing whether something's a good charity or not," says New Philanthropy Capital's Martin Brookes.
"Many charities actually spend too little on administration costs. The analysts in my organisation spent a great deal of time looking at charities and finding out really that they're held together by sticky back plastic and elastic bands."
Oxfam might be considered an exception. According to its latest annual report, it spent £44.8m in 2007 on UK staff salaries, with director Barbara Stocking earning more than £94,000 a year. Support and governance costs - admin in other words - made up about 11 per cent of the £213m spent on "charitable expenditure".
But then Oxfam is the eleventh highest-income UK charity according to the financial information publisher CaritasData, and it employs over 2000 people in the UK alone.
Perhaps that's why it's very concerned about conveying a message of good money-management. Supporter relations executive Anna Williamson doesn't hesitate a second in breaking down where each pound goes. "About 80p goes directly on emergencies, international development and campaigning, a further 10p on running costs and 10p is used to make more income. For every pound that we invest we get £4 or £5 back. Shall I send you a link to our annual report?"
But Mr Brookes is adamant we should be measuring effectiveness in other ways: "We all want to see money going to the front line and going to the causes that we care about, what we should really worry about is charities' performance, not simply how much money is passed through.
"You can look at the number of people that it helps. You can survey those people to see whether the charities have a particular impact on them or are helping them really significantly. You can try and track influence in government policy if that's what they're trying to achieve."
The Redress Trust, a London-based charity which helps torture survivors get compensation, came first in it's income category at the Charities Online Accounts Awards this year, an event celebrating charities that publish easy to access accounts reports on the internet.
Redress development director Jo Deverson argues scrutinizing how much is spent on admin alongside other things is good for keeping charities in check. She says there are ways of monitoring and budgeting to make sure a charity stays efficient.
"I would encourage people to look at the bigger picture. Look at what the charity's doing and whether they need these costs to carry out their charitable activities."
"We couldn't do it without an office to sit in or without paying our staff, particularly our lawyers who are essential to what we do."
The Donkey Sanctuary: seeing is believing
VIDEO: The Donkey Sanctuary got over £20m in donations in 2007. Kyriaki Karadelis went to Devon to find out why
Giving money for nothing is 'old fashioned'
AUDIO: If it's not obvious to donors how their money will be spent, you can't expect them to give you any
Trust me, I'm a charity
The UK’s foremost reason for lacking trust in charities is not knowing where the money’s going, but whether that’s stopped us from giving to them is another matter
The man who keeps 'chuggers' in check
Kyriaki Karadelis catches up with Mick Aldridge from the association that regulates face to face fundraisingNews
It's early days yet, but self-regulation is working for fundraising charities, a spokesperson from the Fundraising Standards Board (FRSB) has said.
Charities that get a lot of money from bequests will feel the blow of falling house prices, according to the director of a legacy market research project.
Donations to religious organisations could increase if they lose their charitable status, according to a group whose members support ethical living without religion.
The umbrella organisation representing 13 UK aid agencies has warned it’s too early to say if the credit crunch has impacted on charity donations.