# Which charity brand will be the first to jump on admin costs?

- Link: https://fundraising.co.uk/2012/05/24/which-charity-brand-will-be-first-jump-admin-costs/
- Published: 2012-05-24T16:21:35+01:00
- Author: Kevin Baughen

**Several charity folks have already talked to me about this week’s[ Third Sector Women](http://www.vanillaventures.co.uk/thirdsectorwomen.php)(
TWS) networking and learning event and about how the conversation turned to the 
difficult issue of fundraising for expenses. **

I didn’t attend but one speaker strongly suggested that the charities in the audience
should all be braver collectively and just be honest about what it costs to run 
their organisations. Yes, but do we need to be shouting about it specifically?

Within commercial product marketing it’s well-known that if a company or sector 
competes on price alone, then that’s all the target audience ends up paying attention
to.  Think Easy Jet and Ryan Air.

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So for charities to increasingly talk about their own expense ratios, we run the
risk of raising the profile of this one, very singular and grossly misrepresentative
aspect of what the sector actually achieves.  That said, if there is a misunderstanding
around charity expenses amongst donors, we do have an obligation to clarify the 
situation in order to underpin the credibility of our future fundraising activity.
The trouble is, there are several self-inflicted issues we need to perhaps overcome
first:

1) A few charities with very loud voices (ie; high media profiles) talk openly about
expense ratios as a selling point of their organisations.  And because we believe
what we see on TV, charities who don’t match these figures must be worse (see above
Ryan Air point).

2) Not all charities measure their expense ratios in the same way.  For example,
Comic Relief markets the fact that every penny of every donation goes to the projects
they support.  So how do the project delivery staff salaries get paid?  Who puts
the petrol in the vans that drive volunteers around the various project sites?  
The answer is likely to be that donations do (of course).  The definition of project
costs in this instance is being applied to cover a whole range of ancillary costs
which are justifiably required to make those projects a reality.

All charities could justifiably state that the reason they have an electricity bill
to pay is purely because without the premises they couldn’t deliver their charitable
goals.  With such different approaches to accounting for expenses in play, how are
donors supposed to make an objective decision?

NB – I personally think [Comic Relief](http://en.wikipedia.org/wiki/Comic_Relief)
does an outstanding job but have also known interns who receive expenses for working
there – so they must have some expenses…

3) We aren’t working hard enough to allay the misconception that “not for profit”
means “free”.  I’m sure every charity worker would love for their living expenses,
mortgage or rent and car tax to be magically paid for but life doesn’t work like
that.

I wish I had a pound for every case I’ve come across of a donor complaining about
charities wasting money on unnecessary services… who did they think they were complaining
to, a front line project worker?  No, they often demand to speak to someone in Membership
Services or a Director ie; someone who shouldn’t really be there according to the
donor.

4) We evidently don’t explain clearly enough that charities have the same kinds 
of expenses as everyone else, irrespective of how big the organisation is.  Donors
reluctantly pay for their insurance and they pay tax – so do charities.  These are
unavoidable costs in a modern society and in many cases such expenses are incurred
solely to protect beneficiaries and the public (I’m thinking about public liability
insurance as an example) or are required by law.

So, I think we do need to take some brave decisions on this issue but not necessarily
the obvious ones:

 * let’s stop using expense ratios as a marketing tool altogether.  There is too
   much variability in how they can be accounted for and over time, donors and the
   public at large will simply see them as uncredible – the alternative is more 
   regulation!
 * let’s stop talking about ‘admin costs’ as different to ‘core costs’ altogether.
   It suggests that there are some things charities do which aren’t linked to the
   core purpose.  If this is the case in any charity, then processes really need
   to be overhauled for obvious reasons.
 * instead let’s get back to basics and talk about what we can do for people with
   the donations we receive.
 * let’s find a celebrity champion or 10 from the sector to stand up and deliver
   these key messages consistently as part of an overarching awareness campaign

And finally, let us as a sector encourage and support a handful of the biggest, 
brightest and best charities in the UK to come out in defence of this position. 
To be brave and state that whilst every effort is made to ensure costs are controlled
and effective project delivery is absolutely paramount, we will not be drawn into
competing on a playing which is not level.  That’s simply not fair to our beneficiaries
or our donors.

I think this is about protecting the long term brand credibility of our sector so
to start the ball rolling, I nominate – and would be happy to support by building
the right statements with them – senior representatives from: RNLI, Barnardos, Comic
Relief, Children In Need, Oxfam, RSPCA, NSPCC, Samaritans, Cancer Research UK, Help
for Heroes. Obviously this isn’t an exhaustive list but these charities do have 
a powerful media profile. 

Please be brave and take a stand for our collective brand. 

Get in touch if I can help or if you’d like to take this idea of a sector brand 
position forwards.

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