Charity Fundraising Costs

As we all know, most charities spend a proportion of their income on generating further income. Also, we are aware that charities cannot spend 100% of their income on fundraising, otherwise they would not be spending any money on their charitable purpose. So there must be a level at which fundraising expenses are acceptable.

However, there are hidden fundraising ‘costs’ that are not on the accounts sheet. For example Christian Aid displays the following figures on their site:
Out of every pound we receive, we spend:
* 52p on long-term development projects
* 17p on responding to emergencies
* 12p on campaigning and education
* 18p on fundraising
* 1p on administration

The unseen item is how much resource do external fundraisers contribute. We can see that Christian Aid spend 18p in the pound on fundraising, but in addition to that we have the time and money that external fundraisers (the people who do sponsored bungee jumps, etc) commit to fundraising for Christian Aid. This time and money only adds to the 18p in the pound fundraising figure above – the money raised is already accounted for in the above figures. So even though these people are acting on behalf of Christian Aid, their expenses (and time) are conveniently off the accounting sheet.

To better appreciate the amount of resource that a charity (including it’s supporters) is actually spending on fundraising you need to estimate the time and money that is off the record.

From the figures available for Christian Aid (for example) it is very difficult to assess this cost as their income stream does not differentiate between income from external fundraisers and income from fundraising where the costs are directly to the Charity itself (e.g. the cost of letters asking for money).

For the estimate it is worth including both the time and money of the external fundraisers (this is what is accounted for if the fundraiser is an employee of the charity, after all). If we monetise the time spent by fundraisers then at a guess I would estimate that the final figures must fall into the range of 20p to 35p in the pound compared to the 18p in the pound published figure.

Please don’t assume that I’m questioning the published figure – I’m not. I’m just trying to add to that figure the fundraising costs that are external to the official Christian Aid organisation as incurred by it’s external fundraisers.

So, if we could actually have a reliable estimate of the true costs of fundraising by charities what would our response be? Charities that spend a large proportion of income on fundraising are criticised for that and they usually attempt to reduce that proportion.

There are probably some charities that have no ‘off account’ expenses for fundraising, but probably also other charities that have no ‘accounted for’ fundraising costs because it’s members freely give of their own time and resources to fundraising (i.e. it is all ‘off account’). Just because they can claim zero pence in the pound fundraising costs does not mean that they (in the larger sense than just the accounted for organisation) has zero fundraising costs – it always costs money to receive money even if it is just to check your bank statement and to write it into the accounts. The time and money of voluntary fundraisers should be taken into account by donors, in just the same way donors are interested in the official figures.

So bear in mind that a charity with a zero fundraising cost may, in this slightly different way of looking at things, actually have a 50% or higher fundraising cost.

Here the Charity Commission states that it will take up complaints where people identify that “fund-raising or administration costs that are excessive”.

Exactly Who is Doing the Giving?

Bartley brings up the issue of Government funding the church to carry out welfare services. This is a hot topic for many missions of the church including youthwork.

Whilst there are many considerations around the matter, I would like to merely ask: Who is doing the giving?

This is a hard question, but we all need to be careful that we consider it and are aware of it in our own situations.

As Christians, God has asked us to give our lives, as a sacrifice, to put others first. We show love in what we do, because it is our resource that we are giving.

If I give and in my giving I employ someone else to do the work, is it me who is giving or is it my employee? Well, it is me – surely. Sure, there may be the case where my employee is adding his giving on top of mine, perhaps putting in extra hours. That would be the his giving, not mine.

Our love needs to consist of giving of what we have got. Being a ‘professional Christian’ doesn’t mean that you are giving anything – it is only when you go beyond your job that you are giving, or when you receive ‘tiny pay’ (I knew that there was a good reason for such low pay! 🙂 ) – just the same as a shelf-stacking job down at Tesco’s, it is only when you go beyond the requirements of your job that you begin to give.

(note: how fantastically tax efficient it is to be a low paid youthworker and to make your giving your time rather than your money! Alternatively you could give money, but be taxed on the extra income you would need to receive before giving the money away. There isn’t a rule on this though – we just individually have to know God’s calling, and sometimes that can be to make money, possibly…)

When we think about giving let’s start by looking at what we have to give. It doesn’t need to be ‘silver and gold’ of which you may ‘have none’, but it does need to be something that you have.

Don’t seek merely to be an unloving, ungenerous, ungiving conduity of someone else’s love or giving. Don’t seek to merely be an paid arm of the state, or a paid arm of other Christians.

Sure, join with others who want to give, join with those who want to fund (as long as they have the same ultimate aims and wish to use the same methods as you), but don’t forget where your giving ends and someone else’s giving begins.

Ultimately it is giving what God has freely given us that matters.

Youthwork is a fantastically important thing to be doing – do make sure that the youth can see that you are not just giving other’s resources, but that you are giving your own too. It is that that gives you authenticity.

As an aside, I’ve just come across a case where (non-church) parents were given a letter by the youthwork explaining that as so much money went on upkeep of the church building it would be useful for parents to contribute to the youth activities. I was a bit bemused that the church felt it worth saying that the building was a higher priority than the people and that, whilst the church was willing to spend hundreds of pounds a week on the building, it wasn’t willing to spend a much smaller amount on people…

…..afflict the comfortable

Today I went to a conference on Funding in the South West. It was generally very good and amongst other things we heard from the CEO of the Big Lottery Fund, which has replaced the New Opportunities Fund and Community Fund. The new young people’s fund has been launched £200million to be distributed – priorities on Disadvantage, Proven young peoples involvement at all levels, Innovation, Demand led. Although some big questions raised on how much may be top sliced from the overall Big Lottery Fund (£600million) if London wins it bid to host the Olympics.

There was also a really good introduction to fundraising session by Jonathan Farnhill who used to work at the Salmon Centre. I also went to a session on income generation which had some good inputs. We were told that the slides from the workshops would be going up on web at but I haven’t seen them there yet. Two great quotes Jonathan used:- “Art is not a mirror to reflect reality but a hammer with which to smash it� Brecht. Secondly from Gilbran “If you cant comfort the afflicted – afflict the comfortable�