Time to be open about costs

Organisations in the not-for-profit sector, just like their private sector counterparts, require time, effort and resources if they are to be managed effectively. But there is increasing criticism from some quarters of the level of management and administration costs that these organisations incur. Charities and other not-for-profits need to be more confident in explaining their costs and in making the case for good management.

In a recent interview in Third Sector magazine, Conservative MP Charlie Elphicke criticises what he sees as the high administration costs of some charities. “Some charities are very high on management, marketing and lobbying costs,” he says. “Would that money not be better used to help people?” And he is not alone in expressing such concerns.

Surely, however, a reasonable amount of money spent on management, marketing and lobbying is helping people. Effective organisations need high quality managers and staff. They need offices and computers. They need ways of getting their message across to the public. And they do, on occasion, need to lobby politicians to make the law work for everyone.

When I give money to a charity, I do so because I support what it is trying to achieve. But I don’t tell it how to spend my money. I trust the organisation to know how to use my donation to best effect, whether that be giving it directly to a beneficiary, making an awareness video, campaigning against ill-thought-through legislation – or paying the office gas bill.

Charities and not-for-profits should be open about their management and administration costs, rather than apologetic about having them at all. They should explain what these costs relate to and how they are essential to the organisation’s work. And they should challenge those who seem to think that everyone in a charity should work for free. In today’s complex world, good management is a virtue. And it costs money. The sector must not hide from this fact.

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