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A more charitable interpretation of fundraising

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A more charitable interpretation of fundraising

In David Brindle's thoughtful article on charities' fundraising costs (Rattled confidence, G2, October 20), the Directory of Social Change criticises the Charity Commission for "failing to get to grips" with the issue. However, in 1995, the Charity Commission introduced a new framework for accounts. For the first time, charities had to prepare accounts on a common basis. This made possible the compulsory submission each year of accounts by all except the smallest charities, bringing a sea-change in transparency and accountability.

The Charity Commission monitored 44,000 sets of accounts last year. It looked at the relationship between expenditure on fundraising and publicity and the amount raised. It identified fundraising issues in more than 1,400 cases in the last round and, where necessary, it took them up with the charities concerned.

The accounting framework must be suitable for all charities, which number in the hundreds of thousands and vary widely in size and circumstances. It is just not possible, as the Directory of Social Change would wish, to enforce identical presentation of accounting issues by all.
John Stoker,
Chief commissioner, Charity Commission

• We agree that for a charity to spend 93% of its donated income on fundraising is unacceptable. However, we are dismayed by the use of out-of-date figures in your article the figures you quote refer to the two years up to March 1997. Since then, major changes have been implemented at Lighthouse and the current picture is radically different: our draft accounts for 1998-99 show a ratio of 26% - a figure much closer to the average costs for large charities. Comparing one charity with another can only be done fairly if the information which is used to make those comparisons is clear and consistent.

As the Directory of Social Change report points out, what one charity considers a fundraising cost, another charity does not - it makes comparison of reported fundraising costs impossible.
Stuart McQuade
Chief executive, London Lighthouse

• You quote the report as saying that the Romanian Orphanage Trust, now The European Children's Trust, has high fundraising costs. It also complimented The European Children's Trust as "an unusual and creditable example of a charity whose annual report notes that it has high fundraising costs, but goes on to argue that this is justified". Our costs were high at the time because we needed to invest to secure the income which would enable us to fulfil our mission. This year, we forecast a trebling of our income. We have also reduced our fundraising costs by a third.

Other charities devoted to Romanian children collapsed due to lack of funds. Because we have invested in our future, we continue to have a significant impact on the reform of orphanage systems in eastern Europe. Donald McCready
European Children's Trust

1999 Oct 10