More relevant charity reporting ?

National big name charities appear to be holding their own with the recent Red Nose Day raising over £74 million and people running, cycling and trekking all over the world for various other household names such as Breast Cancer.

The media profile that these charities benefit from makes me wonder about the smaller charities and how their fund raising has been effected by the recession.

If charities have to compete for limited donations, the idea that charities should attempt to quantify the benefit they are providing so that funders can compare how effectively charities are achieving their objectives seems even more important.

Joe Bates

There has been a feeling within the charity community for some time that they should attempt to do this.  It would enable them to demonstrate that what they are doing is for the benefit of the public as well as in pursuit of the aims for which they were originally set up.

 For the charities it would provide a very useful tool in comparing the charity’s effectiveness, a bonus at a time when the Charity Commission has reviewed the charitable status of certain independent schools and fee paying care homes.

I would make direct expenditure on charitable activities the headline figure in the charities accounts would enable people to see at a glance what the charity was achieving, both with the charities commission and the public.

A possible example of this could be a charity which seeks to reduce bullying in a school playground.  If at the beginning of the year 50% of the children reported being unhappy due to bullying and at the end of the year this was reduced to 40% as a result of the charity’s activity, an attempt would be made to value this increased happiness amongst pupils in financial terms. 

In practice evaluating such benefits in financial terms may be easier said than done, but, providing a benchmark as to the effectiveness of the charity would be a good place to start.
Joe Bates 20 April 2011