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Information for students and researchers
There is an increasing public interest in the topic of charity performance and an unfortunate tendency on the part of some sections of the media to undertake very simplistic comparisons of performance between one charity and another and to encourage donors to do likewise.
It is important to recognise that it is NOT legitimate to use simple financial ratios to compare between charities.
It is important to recognise that it is NOT legitimate to use simple financial ratios to compare between charities.
Of course this hasn’t stopped many researchers from calculating financial ratios to map the performance of the sector as a whole and such data is now widely available.
Data is also available for the United States, which has a rather different reporting structure for charities than the UK and which has attempted to set a number of quite arbitrary benchmarks for fundraising performance.
Researchers interested in the topic of charity costs, either fundraising or administration can now access a wide variety of published material.
Data is also available for the United States, which has a rather different reporting structure for charities than the UK and which has attempted to set a number of quite arbitrary benchmarks for fundraising performance.
Researchers interested in the topic of charity costs, either fundraising or administration can now access a wide variety of published material.
Why are comparisons not legitimate?
There are a number of reasons why published charity accounts are not a reliable basis for comparison...FACE, ACE and FCE ratios
While it is not legitimate to use ratios to compare the performance of one organisation with that of another, this hasn’t stopped researchers seeking to plot trends and/or highlight poor or exceptional performance...Fundraising costs in the United States
In the United States, nonprofits above a certain size must file a Form 990 return with the IRS...Where can I find out more?
Further reading and information sources are listed in this section...Administration and management costs
The salaries of senior staff, together with the costs of managing and administering an organisation are often of great interest...Why can some charities claim to have no administration costs?
In our view any claim by a charity that 'all the funds you donate will be applied directly to the cause' should be viewed with caution...
