Charities are misunderstood

Charities are misunderstood because they are often bad at marketing and fail to communicate the fundamentals of how they operate.  I realise this is a bold generalist statement that will have many on the back foot, but the truth is there for all to see.  Survey as many people as you like from the general public and I can guarantee they will tell you that most people believe 100% of their donations should go directly to service provision.  The truth is no organisation can survive if it is run that way.  So why aren’t charities educating the public?

Let’s get a few things out in the open about charities.

  1. There are hundreds of thousands of charities and each one as valuable as the next depending upon what has made an impact in your life.  For example, you will give to breast cancer charities cancer charitiesbecause you have been impacted by breast cancer in your circle.  That does not mean that heart diseases charities are any less important, because the reverse scenario can be true for the next person.
  2. Charities by nature provide for those less fortunate, so they rely on public support to rally behind them and help them through donations.  But donations in most cases do not totally fund an organisation, the difference must be made up through government funding or charging fees for the use of services.
  3. By nature charities are conservative and are founded on the assumption that they should provide for the lowest common denominator.  In other words, fees are often charge to families on the basis that they can afford the lowest amount possible.  There is no means testing.
  4. Volunteers greatly assist many charities, but they cost money to coordinate.  There are some very small charities who operate with volunteers only to provide small services.   The majority of charities however must have full time staff.  Bringing volunteers into charities means someone must coordinate them and ensure policies and procedures are followed correctly, not to mention insurances etc are taken care of.  Volunteers do not generally run an organisation and in most cases they constitute very small portions of the labour required to operate services.
  5. People who work for charities must be paid market rates otherwise you don’t get the best people running services.  People who work for charities (and many make careers out of it) aren’t rich people who can give up their time for free.  People who work for charities do so because they want to commit their time for a cause or to make a difference.   That dos not mean they can be taken advantage of and therefore paid less money.  Remember also that many of the staff are not directly providing services.  Charities needs accounts people, HR, payroll, management, communications and marketing staff as well as staff to run fundraising.

What is the important thing to note from the above points?  Charities need money to pay for operating costs and staff, not all the money you donate can or should go only into service provision.  If charities are to survive they need to have a solid financial foundation and that means when money comes in from whatever source it should be directed into; staff and facilities, investments to guarantee long term survival, and yes to services.  The percentages of how much goes into each should be made transparent by individual charities.

The problem is where I started this blog, charities are misunderstood because they are often bad at marketing.  Charities are failing to communicate the fundamentals.  If charities would say openly, “we need money for long term sustainability, for staff to provide the best possible services and to operate the service itself” – the public would understand.

The Australian Charities and Not-for-profits Commission needs to pay attention to the communications and marketing.  It will be great to see clear reporting in a financial sense as result of the establishment of this commission, but the communications and marketing is more important.  Charities need to have a united voice so the public do understand that while they are not in the business of making money must still operate as a business in a competitive market place.

When you next give to the charities of your choosing, include a note that says please make sure my donation is used to provide quality staff and facilities, contributing to investments to guarantee your long term survival as well as into the services itself.