Fundraising

How charities use your money


Charities primarily spend their income on achieving their objectives (their charitable purpose) – helping disabled children, protecting animals from cruelty, pursuing a cure for cancer, campaigning and educating to put an end to child abuse or renovating the village hall.

If the charity is local and run by volunteers, this is often a simple process – there are few costs associated with the organisation itself (like rent and wages) and the money is used in the same area where it is raised, so supporters can see exactly where their money has gone.

Other organisations, and those trying to make a difference outside their local area face a more complex picture. A proportion of the money they receive has to be spent on running the organisation - management and administration does cost money.

On average, of every £1 generated by a UK charity, 80p is spent directly on achieving the objectives of the charity, and 20p is spent on operating and administration costs (and on future fundraising activity).
It is unrealistic to expect a large charity to be well managed without recognising that it has to pay salaries that will attract and motivate the right staff. It will also have to pay open market rates for bought-in goods and services.

Fundraising itself also costs money – just as a company has to spend on promotion and advertising to bring in customers, charities have to invest in fundraising to attract supporters for the first time, to keep them informed about what’s going on and to reach them with appeals for further help.

A proportion of a charity’s income is re-invested in fundraising to keep the organisation running and delivering its services.