Charities v Charitable. The cost of collecting your donation.
Many "Charities" worry me, though I applaud being charitable. And the cost of money raising and administering that money raising as a business - even before you look at the efficiency of the charity itself in targetting and spending its income - means that of each pound you hand over only a proportion ends up being applied to the cause you're supporting.
How much of a pound given in various ways, then, does the charity get to spend itself on what you've given your money for?
Seeing several newcomers in the charity fundraising business, I had a quick look at a few this morning...
"Any charity, no matter the size, can use JustTextGiving. It's free, and your charity gets 100% of every donation."
[I have not established how the costs of operating "JustTextGiving" are met ... can it really be out of Vodaphone's marketing budget and based on their revenue from the exposure they get via the web site, etc ... perhaps from other advertising streams too?]
"Our fee. It's completely free to fundraise for, or donate to, a charity through JustGiving. We charge charities £15 per month, plus a small 5% fee on each donation, including Gift Aid, made through our site. We then reinvest these fees back into making JustGiving better."
And in the fine print ... Credit card fee @ 1.3% ... Debit card (17p), PayPal (1.45%)
* Face to Face Fundraising
"Face to face donors give 10 million pounds to charity each month" according to the web site of the
Public Fundraising Regulation Association , but I would have no clue as to the average cost of colelction. I'm sure it varies dramatically based on whether the collection is done by agencies (yes, there are agencies), the inhouse team, or volunteers.
Regulations for street collectors were tighened this year - they cannot stand within 3 metres of a cash machine, for example - see [here]
. And there's a new financial fine that can be levied against people who break these rules - "Organisations carrying out the fundraising - agencies or charities with in-house teams - will accrue penalty points for each violation that is uncovered by PFRA's standards team. Once an organisation passes a 1,000-point threshold, the total number of points will be converted into a financial fine of £1 per point". That strikes me as an admission that there's a pressure problem here, but the penalty looks pretty toothless - a fine of 1000 pounds for breaking the rules and having that brought to the authorities attention 1000 times!
Of every pound spent on Lottery games, 50p goes to the prize fund, 28p to 'good causes' as set out by Parliament (though some of this is considered by some to be a stealth tax to pay for things the goverment should fund anyway), 12p to the British Government as duty and 5p to retailers as commission. Camelot receives 5p to cover operating costs profit.
* Health Lottery
"20p of every £ played goes toward local health good causes, endorsed by independent charity the People's Health Trust."
57p to winners, 23p remain for operating costs, marketing and admin, and profit for the operators.
Calling in on an 0844 number. And I read elsewhere ' Prosper with 0844 numbers from "***". You will receive a rebate of up to 4p a minute every time someone calls your number. Regular rebates, which represent your share of the revenue from your incoming calls, soon add up. They can help, for instance, to pay for your telephone costs, staff salaries or perhaps technical support services'
* Charity shop
"Remember that 60-80% of a shop •s income will go to running costs, such as rent and wages." ... example - 18p to British Heart Foundation from donated goods (from BBC report mentioned again in next paragraph)
* Doorstep Collections - goods
9p - Clothes Aid example. (Listen to [bbc report]
where the interviewer had to press quite hard for this figure)
93p Just Giving
??p Face to Face
28p National Lottery
20p Health Lottery
18p Money paid in major charity shop
9p Charity supported by doorstep goods collection
There are further stories here, though:
• Through "Gift Aid", charities can reclaim tax that you would have paid on your donation from the government "JustGiving" make a big point of that, and perhaps that's where the funding for "JustTextGiving" comes from? Please email me if you know!
• If you give money through the lottery, you get a chance in a cash prize that accounts for 50% or 57% of the money you give, so in reallity you get money back in the long term, and of every pound you don't get back, 56p goes to good causes (national lottery) or 43p does (health lottery).
• A pound spent at charity shops gives you good as well - the 9p or 18p to charity is a slice of the profit that the charity business makes from that sale. Not necessarily a bad thing, but you should be aware that when you spend a pound to help people / animals / whatever, only a tiny amount of that money actually goes to providing that help.
And of course I'm just talking in this post about the money flow into the charity's account for them to use for their intended purpose. There's further admin and distribution costs and perhaps salaries to be paid from the remenants of your pound before it reaches that sad little face you saw on the advert ... (written 2011-10-06)
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