Charity Finance magazine has launched a survey asking charities about their core functions. Gareth Jones explains why.
Core costs, support costs or admin costs, call them what you will, but they are an area where there is a clear disconnect between what charities want and what their funders want.
Research by nfpSynergy earlier this year found that charities’ biggest gripe with institutional grantmakers is that they want them to provide more funds that are unrestricted or for core costs.
And when it comes to state funding, benchmarking research by the Charity Finance Group has found that on average charities are making a deficit of 0.5 per cent when delivering public services, putting them under pressure to keep core costs low and fund what does remain through voluntary income.
The market for individual giving is tricky as well. Just last week, research from the Charity Commission found of the 45 per cent of people who felt their trust and confidence in charities has decreased, 60 per cent put it down to too much money being spent on advertising, wages or admin.
Seeking to fundraise from such member of the public puts pressure on charities to minimise their core costs and publicly promise that a high percentage of each donation “goes to the cause”, as if the two have no relationship with each other.
Within this context, it is little wonder that charities report that their core functions are under resourced.
Efficiency
All of this is not to say that making efficiency savings is a bad thing. Charities should always be looking to minimise their core costs in ways that retain the capacity to support the frontline in areas such as finance, tax, IT, safeguarding, and property.
But when vital components of a charity’s infrastructure are missing or not functioning as they should, then beneficiaries can feel the effects.
In some cases the problem is that upfront investment is required to make these efficiency savings. For example, manual administration processes might be eliminated with the help of better software, but the cost of implementing that software is out of reach.
This leaves a situation where charities’ core functions are simultaneously inefficient and under-resourced.
Culture change
Many of the challenges identified above are cultural ones, which is why charities must recognise and demonstrate the value that effective infrastructure brings.
For this reason, we’ve launched a short, anonymous survey and are keen to hear from you. We want to know whether you feel your charity’s core functions are adequately resourced, and hear your stories about how core functions have make a real difference to helping the people you exist to support.
We’ll then publish the findings during Charity Finance Week (taking place 8-12 October), where we’ll be celebrating the ways finance and other core functions help charities to achieve their objectives.
You’ll find coverage of this issue in Charity Finance magazine and on civilsociety.co.uk, while we’ll also be highlighting it at a parliamentary reception in the House of Lords.
We look forward to hearing from you.
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