Saturday 18 November 2017

All for a good cause. . . where your donation goes

Laura Noonan

Laura Noonan

NAVIGATING the finances of Ireland's charities is a minefield.

First, there's the lengthy process of convincing charities to part with basic financial information that would be readily available in other countries.

Then there's the even more complex task of interpreting that information in a meaningful way. How much charity money goes to good causes and how much goes on back-office costs always makes for a good headline.

The 30 charities that the Irish Independent examined spent an average of 87pc on "charitable activities" and 13pc on everything else.

That 13pc might sound high but when we looked at 30 top charities in the UK, we found that they spent 21pc of their money on things other than "charitable activities".

Of the Irish organisations, Amnesty International, Guide Dogs for the Blind and the Irish Cancer Society had some of the lowest spends on direct charitable activities.

All were asked about their expenses and all of them provided explanations.

Amnesty, for example, spends 71pc of its cash on advocacy and campaigning. Last year it took in €3m in donations. Just over €2.1m was spent on advocacy and campaigning, while €870,000 went on fundraising and administration.

A spokesman pointed out that Amnesty had higher fundraising costs because it doesn't get state cash and therefore has to spend more on raising money from the public.

That point is supported by our research, which shows that charities with a higher reliance on state funding generally spend a higher amount of their cash on "charitable activities".

For instance, the Irish Wheelchair Association gets 88pc of its total funding of €53.2m from the State and spends 95pc of its income on charitable activities.

Enable Ireland received 92pc of its €44.3m from the State in 2010 and spent 95pc of its money on charitable activities.

Other differences stem from the fact that charities have different levels of volunteer support. If a charity has thousands of volunteers, it can keep costs down and spend more on charitable works.

So an organisation like St Vincent de Paul, which has 10,500 volunteers and 587 paid staff, is able to spend about 90pc of its income on charitable activities. That meant that €66m of its €73.25m income in 2010 went on good works.


Charities were also asked for information about things such as advertising costs, pay cuts, auditing and corporate governance. Advertising and fundraising costs looked high at some -- €10.8m at Concern, €1.25m at Trocaire and almost 9pc of Bothar's total income.

Charities said the costs of advertising often varied year by year. Some have seen higher spends on advertising in recent years, as they try to offset a fall in state funding by attracting more private cash.

The issue is complicated by the fact that some charities separate advertising from general fundraising costs, but some others do not.

There are no Irish guidelines, never mind rules, on how charities should present their figures, so charities adopt different ways of doing things.

On top of that, there is no getting away from the fact that some charities do not have anything in common with each other beyond the fact that they are charities.

A charity that runs homeless shelters and another that provides support to the disabled are not inherently similar organisations. Therefore, their costs won't be the same because they shouldn't be the same.

All of which means that the "you're comparing apples with oranges" argument can trotted out in response to pretty much any question.

Irish Independent

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