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Mail on Sunday accuses charities of ‘misleading’ donors

25 Feb 2019 News

The Mail on Sunday has accused Britain’s biggest charities of “misleading” donors over the way they calculate money that goes to their cause.

NCVO has now called for reform of how information is displayed on the Charity Commission's register.

An investigation by the newspaper looked at the most recent accounts of the UK's ten largest “mainstream” charities and found that together they included more than £225m executive pay, public relations and support services in £3.9bn of charitable spending.

The article highlights Marie Stopes International and Save the Children International as reporting figures suggesting 100 per cent of their expenditure goes on charitable activities.

It also mentions Cancer Research UK, National Trust, Oxfam, Save the Children, British Heart Foundation, Sightsavers, Barnardo’s and British Red Cross.

Gina Miller, founder of the True and Fair Foundation, which has been critical of charity spending previously, told the paper donors were being “misled”.

She said: “If a charity receives £100 and after overheads £50 is available for spending on the genuine end charitable activities, donors should be told this rather than misled.”

Lord Wallace of Saltaire, a former Liberal Democrat minister who worked on reforms to the Charities Act 2016, told the paper that charities should separate staff and support costs from charitable activities.

He said: “Then you get a sense of what proportion of their income is needed to cover support costs. If it's only 5 per cent, they're doing incredibly well.

“If it's 10 per cent, that's probably normal. If it's up towards 40 or 50 per cent, there is something definitely wrong.”

Charities following guidelines

A spokesman for NCVO told the paper that the charities mentioned were following the Charity Commission's rules.

He said: “Charities spend prudently on things like IT or office costs, but can't do their work without them. They follow approved accounting standards, and provide full details of their support costs in their publicly available annual reports.”

Similarly, a spokesman for Marie Stopes International told the paper: “We are committed to transparency, which is why we also publish a clear and detailed breakdown of our income and expenditure in our annual report, free to view at the Charity Commission website and our own.”

And a spokesman for National Trust is quoted as saying: “Every year we spend millions of pounds protecting nature and historic places. We simply wouldn't be able to do this without our support systems that allow staff and volunteers to do their jobs, as well as ensuring visitors have the best experience.”

Commission to review information

Meanwhile, a Charity Commission spokeswoman said the regulator would be reviewing this year what information charities sould be submitting.

She said: “Charities must file their financial information in line with the requirements set out in the charity accounting framework.

"In 2014 the framework was amended to create a single figure for charitable activities that included governance and related support costs, and this reflects the fact that good governance is essential for a charity to operate effectively and to deliver on their charitable objectives.

“We know from our research that the public want transparency on costs and to understand the impact charities have, which is why our Annual Return 2018 requires more information than ever before, including data such as chief executive pay.

"We will be reviewing in the coming year what information charities should submit in future and how this can best be displayed to demonstrate charitable impact and increase transparency.

“The public rightly expects charities to be as efficient as they can be. Trustees should be acting in the best interest of their charity at all times and driven by their charitable mission and purpose in everything they do.”

Problem with the Commission website 

The story has prompted NCVO call for a review of how information is presented on the Charity Commission's website. 

A spokesman said: “This isn’t the first time the charity register website has led someone to arrive at a very confused critique. I know this isn’t what the Commission want for the site and we’d welcome a conversation with them about how to solve its problems.

“In this case, if the website displayed the support costs figures that charities have to submit to the Commission we may well have avoided the unfair accusation that they are being hidden.”

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