Donors should look critically at the organisations they donate to, and should support those they perceive as “doing the best job for the money”, according to Our Community Group Managing Director Denis Moriarty.
In response to Fairfax Media’s probe into charity fundraising costs – previously reported by Our Community* here – Mr Moriarty said organisations who were shy about investing in fundraising can struggle to survive.
“Australians, on the whole, don’t tend to give money to good causes unless they understand the importance of the cause, and they’re asked to give. And raising awareness and asking strangers for money costs money,” he said.
The Fairfax Media investigation, published in late December, revealed that some of Australia’s biggest charities were spending almost half their donations on fundraising.
The investigation examined what percentage of public donations some 15 Australian charities spent on fundraising. It found some were spending up to 40 cents in every dollar and others less than 5 cents.
Mr Moriarty said it was problematic to rate causes by how much they spent on administration and fundraising as there was much variation in how various groups calculated the figures and no rules to stipulate what expenses must be counted.
His views echo previous comments to the Funding Centre by Fundraising Institute of Australia chief executive Rob Edwards in response to calls for charities to be forced to disclose the percentage of donations spent on administrative costs. “What we need to do is get a standard set of accounts that compares apples with apples,” Mr Edwards said.
Mr Moriarty said it was unwise to presume that the internal processes of a charity were the only things pushing up fundraising costs.
“Governments of all flavours around the country have been useless at establishing meaningful fundraising legislation,” he said.
“Anyone who is truly worried about the costs of fundraising should be banging down the doors of every MP in Australia demanding something be done to reduce fundraising red tape.”
Mr Moriarty said that judging an organisation on its internal costs also missed the point.
“You don’t make a choice between buying an iPad or an Android, say, based on what the manufacturers spent on administration. You look at whether you think it’s worth the money,” he said.
“If there’s a choice between two products, your money goes to the one that does the best job for the money. That’s the way it ought to be with giving.”
Mr Moriarty's full response can be read here.
*The Funding Centre is an Our Community initiative.
