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How would the ideal charity spend its

income?
Report on the views of the public on charities June 2016

The public are happy for a charity to spend an average of 14% of its income
on each of campaigning, fundraising and running costs, and 58% on
beneficiaries

Nearly 70% of the public see CEOs as administration costs

CEO pay is the second most important factor on deciding which charity to
donate to, after number of beneficiaries

This report aims to provide information about public views on ideal charity spending, the importance of
CEO pay in the public eye as well as the publics perceptions about which activities count as
charitable.

How would the ideal charity split its income?


Figure 1: How the public would like to see charity income split
Running costs,
14%

Fundraising
costs, 14%
Helping
beneficiaries,
58%
Campaigning
for change,
14%

When we asked the public to do a breakdown of how their ideal charity would spend its income on
fundraising, running costs, campaigning and beneficiaries, the largest share, at 58%, went on helping
beneficiaries (see figure 1). Obviously, this does not come as a surprise, although it is interesting to
see all other costs including campaigning for change coming in at around 14% of the total income.,
This is probably reasonably close to the actual amount spent on these areas by the majority of
charities, though both running costs and campaigning are not recorded as such in charity accounts.

Our next question tried to understand which activities and staff members, the public think of as
counting as part of administration costs, which as fundraising costs and which as money spent on the
cause. In this area we see a different level of confusion and misunderstanding.

Figure 2: How the public see different types of spending


Perceived as Administation costs
Perceived as spending on the Cause

Perceived as Fundraising costs


Not sure

A charity's Chief Executive

69%

A director managing several medical research


projects

46%

6%6% 19%
9%

24%

21%

A person campaigning to change the law

18%

A magazine giving people information about a


medical condition they suffer from

18%

A nurse feeding children in a refugee camp

7%
11%

20%
24%

39%
37%

23%
21%

66%

16%

Although very few charities (and CEOs!) would agree, a whopping 7 out of 10 people would count
CEO pay as an admin cost (see figure 2 above). More curiously, 24% of people think a magazine
giving people information about a condition they suffer from would qualify as fundraising. This figure
has risen from 20% in 2014.
What does this say to us in terms of the discrepancy between charities own view of the costs
associated with the cause and the publics perception? The public categorise various types of costs
very differently and this is a factor in their scepticism of charities effectiveness the publics
understanding of the cause is much narrower than the voluntary sectors own view.
In the past, we also asked how much the public is happy to pay a charity chief executive in comparison
to other professions. 1 in 5 are not sure how much a charity chief exec should be paid while 23% of
people think 40-60k would suffice (probably pretty close to the real world pay of the majority of
charities who have a chief executive). In general people seem more certain about how much a bus
driver and social worker should get - on average half of the public think they need to earn somewhere
between 20k-40k. However, for higher paid positions such as a bank CEO, hospital CEO or a small
company CEO, people are more uncertain, and their answers are much more varied.

CEO pay is almost as important as the number of people you


help
In order to understand the publics attitudes towards different types of charities when deciding to part
with their donation, we presented them with 3 different charities, and in each scenario how likely they
would be to give to each charity. Our 3 different made-up charities varied in terms of size, income,
CEO pay, number of beneficiaries and cost of fundraising. We know that these scenarios are not
perfect (there are many different combinations we could have used), and this is rarely how donors
would make a decision to donate but we were trying to understand the different financial and impact

measures that might influence this decision. We found that the public is mainly concerned about
beneficiaries the cause is the most important thing. However, this is followed by CEO pay suggesting
that as long as the CEO pay to income ratio is sensible, they are happy.

Figure 3: Deciding factors when it comes to giving


The most important factor
when deciding which
charity to donate?

34%
Number of beneficiaries
31%
CEO pay
20%
Charity Income
16%
Fundraising costs
Seeing fundraising costs coming last in this list is especially interesting, considering the negative media
coverage the charity sector has been exposed to since the beginning of last summer, which focused on
the fundraising activities of charities.
But the question is, who values what more? Our research shows that over 45s are much more likely to
think of CEO pay as the deciding factor when it comes to their donations. As this is the portion of the
population which gives most to charity, it is important to take notice of this figure when thinking about
communicating your decisions on staff pay. Although they are unlikely to seek out this information,
they may well be off-put by any information they hear in the media or elsewhere.

Recommendations
The private sector, MPs and trusted institutions like the BBC and lately charities, have all been
experiencing closer scrutiny from media. We are living in the digital age which means all aspects of our
lives and work are under constant scrutiny. This means that public controversies are likely to become
the new norm for many types of organisations. Although the sector is generally open with its accounts,
the public still craves more transparency or a more managed transparency. Hand-holding with donors
and presenting them with key facts from your accounts rather than directing them to a dense annual
report, or worse still expecting them to go to the Charity Commission website for information, is likely
to be far more successful.
Charities should make sure they talk about their decisions on where and how they spend their money
with donors to ensure that they are setting the agenda if not, then it will be the media that decides
how this discussion is framed, and last summers coverage indicates they will not be particularly
favourable to charities.

It sounds obvious, but communications need to be really clear about how each element of work
contributes to the aims and objectives of the charity. In that sense, hand-holding communications may
involve joining the dots for donors for example,, the role of a medical research co-ordinator ensures
that learning is shared in each research lab and duplication of effort avoided, which means that more
cures and treatments can be developed!

About this research


This report is intended to highlight the most recent key findings from our research about the publics
views on charities. Data reported here is based on nationally representative sample of 1,000 adults
16+ in Great Britain. Data shown here is from the January 2016 wave of research. For more
information please contact Joe Saxton on joe.saxton@nfpsynergy.net

About nfpSynergy
nfpSynergy delivers research, insights and expertise to help non-profits understand their audiences
and make informed strategic decisions.
We use a range of research and consultancy skills to help charities find out exactly what they need to
know. We speak to over 30,000 people a year about non-profits. With over 15 years of experience and
vital trend data, we can help you collate, analyse and understand the opinions of your key audiences
and integrate them into your work. We have already helped over 150 charities in a vast range of ways,
including understanding supporter journeys, segmenting their audiences and evaluating and improving
services for the people who need them.
Non-profits of all sizes and areas have benefitted from our work, including three-quarters of the UKs
top 50 fundraising charities. We have also written over 100 popular free reports and presentations on
the major issues facing the sector.