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Sadly, when it comes to judging how charities, most people still seem to be obsessed with certain aspects of expenditure. How much is spent on fundraising? How much does the CEO get paid? How many pennies in each pound does the charity spend on tea bags and paper clips? At NPC, when analysing charities, we take a different view.
Managers of companies have a legal duty to maximise benefits for their shareholders. This means that it is written into law that businesses must strive to produce the best results they can. In contrast, charity legislation requires little more than that trustees and managers ensure money is not wasted. There is barely any emphasis on creating value for beneficiaries, and nothing that relates to the results of organisations’ work.
On Monday evening I went to a talk at the offices of Withers LLP by Dame Stephanie Shirley, a seasoned philanthropist and, since May 2009, the UK’s first Ambassador for Philanthropy. The talk was entitled “Facilitating Giving”, but the main thing I took away from the talk were Dame Stephanie’s inspiring words about her own motivations for giving – and her views on the challenges facing the charity sector.
Last week, the Boston Foundation, one of the oldest and largest community foundations in America, announced significant changes to the way that it is giving grants.
Not only is it changing from funding programmes of work to providing general operating support for charities, but it is also making this funding unrestricted, so that charities can spend it on whatever they need to. But the good news doesn't just end there.
Next week NPC publishes the findings of a year-long pilot project carrying out research in to charities in India. One of the things we believe very strongly in is the importance of free public information on urgent social causes and the performance of non profits seeking to tackle them. But donors wanting to make a difference in India have, until now at least, faced an almost total lack of independent analysis. This matters.