Is it time to stop fueling the charitable costs fallacy?

You don’t have to look very far or very hard in our sector to see statements like;

for every ￡1 you donate 95p will be spent on our charitable work

(often with no explanation as to what the other 5p has been spent on, probably a hot tub for the CEO or something – yes I am joking)

Here’s another example;

For every ￡1 you donate; 73p is spent helping people in need. 16p is spent generating funds. 11p is spent on running our organisation.

?

But – without the “other stuff” none of the rest of that ￡1 could make a difference, your running costs and fundraising are helping people/dogs/lost pigeons in need too, surely? And just because you have to separate it all out in your formal accounts, is it really helpful for the sector to keep sharing our little pie charts and infographics of a pound coin? I’m not sure it is.

No organisation, including charities, can run without money or leadership. Why are we pretending that these costs matter less in making a difference? They don’t, they are vital.

When we alienate running costs – you know, keeping the lights on, having a leader, paying for stamps – we do our sector a disservice. We perpetuate the belief that charities should exist on as little as possible and well, I don’t believe that to be true. For anything, anyone, to thrive they should be nurtured and not starved. This is basic stuff – and we all need to be warm enough to work, and have the occasional custard cream, and enough paper for the printer. All organisations need to be managed and governed well. You can't pretend that doesn't cost money.

I am sure an individual giving expert will be along to tell me why this stuff matters to donors. And I think that transparency does matter hugely, but reducing it all down to a % and using language which doesn’t accurately explain why the ‘other stuff’ is so vital makes it seem like it is merely a choice.

Maybe your charity is making better choices because your “other stuff” only costs 5p and at that other charity it costs 22p? I’d go so far as to argue that it is not aiding transparency at all.

We need to be better at talking about what charity leadership means and looks like. We need to talk about the fact that investment in fundraising brings return and enables good causes to thrive, and how donations support all of that to take place.

So next time you reach for that little ￡1 pie chart think about if there is another way to explain why the running costs and the fundraising costs matter. Don't be ashamed of what it costs to do great work and make a big difference.

Sarah-Jane is a fundraising consultant, passionate about improving the charity sector you can find out more at www.sjpickeringconsulting.com