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Public trust in charities is up but admin costs remain a big concern

Public trust in charities is up but admin costs remain a big concern
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Public trust in charities is up but admin costs remain a big concern1

Governance | Tania Mason | 4 Jul 2012

Overall public trust and confidence in charities has risen slightly over the last two years and is now higher than at any point since the Charity Commission began measuring it in 2005.

Yet, nearly three in five people agree that charities spend too much on salaries and administration costs.

According to new research conducted for the Commission by Ipsos Mori, the overall trust and confidence score stands at 6.7, up from 6.6 in 2010 and 2008, and 6.3 in 2005.

The new public survey suggests that charities are among the most trusted groups in society, third only to doctors and the police. In fact, 37 per cent of people believe that charities play an essential role in society, up from 30 per cent two years ago.

The Commission suggests it is likely that this increase is linked to the public’s awareness of pressures on public funds and the role charities can play during times of need.

However, two-thirds of the public say that some fundraising methods used by charities make them uncomfortable, and 43 per cent said that the most important factor affecting their trust in charities is knowing that a reasonable proportion of donations reaches the end cause.  

And while 47 per cent think charities would be better than private companies or the public sector at providing a caring approach, just 7 per cent think charities would be best at providing a professional service.

The Commission said: “This may indicate that some people still view charities as being run by ‘amateurs’ and is not necessarily based on direct knowledge or experience.

“At the same time, the public express concerns about charities spending too much on salaries and administrative costs, with 59 per cent either strongly agreeing or tending to agree that too much was spent on these costs.  

“This indicates a lack of appreciation that charities need to be well managed and may need to operate in a businesslike way to achieve their charitable purposes,” said the Commission.

It added that this throws up a potential concern for both the regulator itself and the sector: “What happens if the public learn more about how their money is spent by charities but disagree with the way it is spent?  This is a possibility given the high level of public concern about the amount of money charities spend on salaries and administration.

“We believe that openness and transparency by charities, and the ability to explain how all their expenditure and work supports their cause, are crucial in this respect.”




Chris Dennis
Director
Community Accounting Services Kernow
4 Jul 2012

I am always surprised when looking at charities accounts that they still include administration or support costs as a separate item rather apportioning them to their charitable activities.

I've seen many sets of accounts like this that purport to be SORP compliant from reputable accounting firms but include no cost apportionment.

I always liked the argument put forward by the late and great Luke Fitzherbert that said that no-one should donate to the Samaritans on that basis as they had 100% administration costs.

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