The Cost of Raising a Pound - Perception and Reality

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How much does it cost a charity to raise £1 from the public in the UK? Research by the Charities Aid Foundation (CAF) in the UK reveals a huge disparity between public perceptions and the reality of how much charities spend to raise their funds.

A survey of 1,037 individuals in the UK undertaken by ICM for CAF reveals that the public think charities spend 42p to raise one pound.

However, analysis of 162,500 charities’ data from their annual returns held on CAF’s Charity Trends website shows that in reality charities only spend 12p to raise one pound.

When asked how much charities should be spending to raise a pound, those surveyed said 26p – more than double the actual figure that charities are spending.

In the UK, fundraising costs are made up of the costs of advertising (direct mail, outdoor, internet, TV), devising and running fundraising campaigns, and organising fundraising events and sponsored challenges.

The figures also show that the cost of fundraising a pound was 10p in 2007 and 2008, but this increased by 2p in 2009.

The research says this is likely to be a result of the more difficult economic circumstances. Inflation and the fall in donations have meant charities are having to spend more on fundraising.

Commenting on the figures, Richard Harrison, the Director of Research at the Charities Aid Foundation says the research shows the discrepancy that exists between the perceptions of charity fundraising and the reality.

Harrison says this proves that charities are extremely efficient and effective at fundraising, and spend less than a third than the public assumes they do.

The Research says it is hard to be sure what is behind the ‘gap’ in perception and reality. Perhaps some kind of ‘urban myth’ has developed. Perhaps the occasional negative story in the media has more impact than ever imagined? Or perhaps it has to do with a lack of understanding of how the modern charity sector has evolved in recent years, as it has taken on more of the burden of social services.

For more information go to http://www.charitytrends.org/InsightFull.aspx?action=view&id=6