How do I know if a charity is problematic?

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There's a charity I want to donate to but how do I find out information on eg. How much of my money reaches the projects they say it does and how much is admin.

Are they a registered charity? You can see their accounts here: https://www.gov.uk/find-charity-information

That also means they'll have their accounts independently examined or audited.

You could also just ask them?

What do you think a reasonable level of admin costs is? How will you know that's appropriate for that particular type of charity?

If you post the name of the charity I could have a look.

Thank you. It is called TearFund - I don't know if it's a religious thing so am keen to see if they do much religious outreach or if the money all goes on the project.

Ok it's definitely a religious thing but that's ok with me if they don't do preaching/leaflets to the people who need help

I googled and it seems to be an evangelical Christian charity working with local churches.

A decent proportion of a charity’s costs will be spent on admin. The people delivering the programmes will not do that is they are not paid, so there needs to be payroll costs. They’re also not going to do that work if there’s no HR. They won’t get funding for those projects unless someone fundraisers for it. They also need effective comms to ensure their message lands and to continue getting funds in. Then someone has to manage the finance side. Charities not having admin costs is an absurd notion.

Tearfund is also a Christian based organisation.

A well-run charity will spend quite a lot on "admin". It's important to, for example, ensure that funds aren't being given to fraudsters or terrorists, that internal financial controls are robust, that there are decent safeguarding procedures in place, that the computer system isn't vulnerable to hacking, that donor requirements are being complied with. (A grant contract from e.g. DEFRA or the European Commission runs to many, many pages of stringent obligations.) None of this can be done by volunteers. It requires professional, experienced staff.

I would love to know how a charity could avoid spending any money on admin - full time volunteers? Not very likely, is it? It does annoy me when people raise this as an issue, I work as an administrator for a charity and I can assure you I am the lowest paid staff member. My daughter earns more than me waitressing.

A quick look at the Tearfund website has links to their annual reports, the standards they adhere to for disaster relief and a statement of how much money goes on admin.

Money on admin in charities is often criticised but they need to spend enough to comply with employment law everywhere they work and keep track of all the money.

If someone recruits people that deliver work, that's admin
If they run a database that helps when people put information on about clients, that's admin

If they manage volunteers, that's admin

If they get money in, pay staff, and deliver grants, that's admin

Which of these admin tasks is not essential - they all help deliver the services to clients.

And of course, charities can give grants to scientists etc.
All great.

The scientists get paid.
There are admin costs in science, running a building etc.

Admin is essential and helps deliver the services that are needed.

I'm so glad to see all the posts from people who actually understand what it takes to run a charity. I'm a trustee of a small charity, and good admin is absolutely vital to to running a non-profit organisation that actually delivers a quality service to its service users. I would more feel the need to ask questions of a charity that spends too little on admin.

How much of my money reaches the projects they say it does and how much is admin.

It can't reach the projects without admin. And charities working in other, difficult countries/difficult situations, need to spend even more on admin. There simply is no way round it. Some charities are relatively cheap to run, and others much more expensive. That's not because there's a difference in how much they care or how efficient they are. The difference lies in the type of work they do.

I haven't said I don't think it should go on admin. I just wanted to find out how much they spent on admin vs projects. Is there like an independent auditor?

I tried to find it but couldn't ill try again now I know it's called annual reports thanks

What I was trying to explain is that the difference between their admin costs and their project costs won't actually mean much. You simply cannot compare charities that way, as their needs, the work they do and where they do it affects the ratio so much. A charity spending less on admin could actually be delivering a much poorer service than one that spends a much higher ratio.

While it's good that there's transparency, to the average donor, it means very little. And some excellent charities are being disadvantaged due to the understandable lack of knowledge of the average person.

I'm a charity trustee. All our income goes on "admin" in the sense that we deliver services to people. So we pay staff to do that. We aren't giving money or goods to people - we are providing them with support. So that's all staffing costs.

Before I joined we had an employee who was paid to do admin tasks - office management, financial support, payroll etc. They resigned and the board decided not to replace her. Terrible idea - the CEO ended up getting a volunteer to do it which meant managing the volunteer who wouldn't always turn up or doing it herself. People couldn't do the work they needed to do because IT didn't work, there was no one answering phones etc. So even "pure admin" needs to be done and done well.

Charities need to be run well and that costs money. That's a hill I will die on. Waste should be avoided of course but that's very different.

Tearfund have been going for years I would be surprised if they weren't legit.

A few seconds searching has revealed that TearFund had income last year of over £85 million. (So by charity standards, they're massive.) In the same accounting period, they spent £75 million on their charitable activities, £487,000 on governance, £14 mill on fundraising, and £24 mill on grants to other organisations for them to carry out their own charitable activities. Is that a reasonable breakdown? I don't know. As @saraclara says, it's impossible to know without knowing in detail what their governance structure is like, how they go about raising funds from donors, what services they offer etc.

TBH, you could donate money to a small local charity and it would potentially have a much bigger impact on the charity's beneficiaries, because their income is smaller and so donations are proportionately more valuable. But the flipside is that there's a greater risk of inefficient systems and processes, even fraud etc, purely because smaller charities can't afford the staff. (Not all smaller charities obviously.)

https://register-of-charities.charitycommission.gov.uk/charity-search/-/charity-details/265464/charity-overview

The Tear Fund is a large international charity working in a complex area in 'difficult' countries. So I'd expect their admin costs to be high. However, the costs of what they do on the ground, in terms of food, education and water pumps etc, is pretty low. So the admin vs project spend might look poor. But that's meaningless.

A local British charity funding equipment for physically disabled people will have the opposite pressures. The equipment is massively expensive, but the admin will be more simple. But that doesn't make them better than Tear Fund, which has to send highly trained staff out to far off countries, provide reliable transport to get to remote areas, and manage all kinds of legal and sensitive issues in very different cultures.

As a comparator - Christian Aid last year had an income of around £90 mill and spent £80 mill on charitable activities.

Completely agree with many points made by PPs - am also a charity trustee (and chair of the board) of a medium sized charity.

However, Tearfund's latest annual report is on this page: https://www.tearfund.org/about-us/annual-report - and on p43 shows that they spent 10% of their income on "support and running costs" and 13% on "fundraising".

Agree with PPs though - as a lay person, how will you assess whether that is a reasonable level of expenditure on those things? Tearfund appear to have complicated and multinational operations - that kind of charity often has a higher % of "admin" costs than a UK based charity that just gives out grants (for example), because running a big complex operation is risky and needs a lot of admin.

You also ask if there is an independent audit - yes, their accounts will have been audited by a firm of accountants. But it won't be for the auditors to judge whether the proportion of income spent on admin is reasonable or not. If there were serious concerns about that, the charity regulator, the Charity Commission, might investigate. But they don't look proactively into every charity's admin spend.

The annual report also sets out clearly what their Christian ethos and activities mean - up to you to judge if that's a positive or negative for you.

Ha - cross posted with @saraclara the same point!

Oh right I see! Thank you that makes sense

You aren’t getting it.

Let’s take a project of building a school in an African village and educating girls. To you the project is the cost of building the school, putting some desks in and maybe putting some books in.

The actual cost of the project is building the school, putting some desks in and some books in. Except before that you need someone on the ground to work with the government to get approval for the building, then to find someone to build the school. Now you’ve built the school, you need a teacher to run the classes so your person in country needs to recruit, you have recruitment costs. Your admin in country needs to make sure the school has all the proper paperwork to comply with law in that country. Both your teacher and admin in country want paying, so you need someone to run payroll (and you need to pay them too). We’re moving money from different countries so we need someone to manage the finances, check money is being laundered or fraud isn’t being committed (they all want paying). Then we have someone who needs to raise the funds for this project because teachers in African villages don’t just fall over pots of money and know how to build a school. The fundraiser wants paying too (payroll is really earning their keep now). We have a lot of people, so we need HR to make sure that the charity is following employment laws in both countries. The project goes well, so comms need to come in and shout about the project, so people like you give more money to help more project. But can you believe it? Comms want paying too! Now for all these people we have to pay national insurance contributions (or the in country equivalent) and pension contributions.

Every project needs a great deal of admin to actually happen. But I recognise your username now and well… I think you just like stirring the pot!

@TipsySquirrel I got it after some further explanation thanks