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Charity efficiency star rating mooted by entrepreneur philanthropist 8

Governance | Celina Ribeiro | 11 May 2011

The entrepreneur founder of a new foundation has called on charities to reduce their spending on administration and suggested he might work towards developing a star rating system, ranking charities on their efficiency.

Mike Clare, an entrepreneur who set up the Clare Foundation in 2009, told an event at the Speaker’s House last night that charities should be more efficient and entrepreneurial.

“The average charity spends 20 per cent of its income on administration. My ambition is to reduce that to 15 per cent in five to ten years,” he said.

The philanthropist said that as part of his foundation’s drive to make charities more efficient and entrepreneurial, he would like to introduce a star rating system which would enable the public to instantly gauge the efficiency of charities they might consider donating to. This might be similar to the information on the Charity Commission website, he said, but more simple and recognisable.

Clare, speaking at the event organised by the Clare Foundation in Westminster, made further, and familiar, critiques of the charity sector more generally.

He called on the ministers present, including minister for civil society Nick Hurd, to reduce the red tape involved in running a charity and criticised the “nanny state” of charity regulation.

Clare also suggested that “160,000 charities in the UK seems far too many” and asked whether it was necessary for the UK to house “200 deaf charities, 200 blind charities, 500 cancer charities”.

He said that charities working in related fields should consider more collaboration, even simply sharing administrative facilities, and said that the Clare Foundation would “be delighted” to help charities negotiate mergers and collaborations.

Charities' stewardship of their major donors also came into the crosshairs. “It is so important for charities to involve their benefactors,” said Clare. “It keeps the generous philanthropist keen to learn more and then give more.”

Clare, who has appeared on the Sunday Times Rich List, mused on the contradictions about major philanthropists which can polarise opinion about those wealthy individuals who decide later in life to give away their fortunes.

“I don’t like to pay any more taxes than I need to, however I’m more than happy to put my hand in my pocket to give money to charity,” he said.

The Clare Foundation provides subsdised accommodation and business support services to charities. In its first year, it spent £544,000.

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