Effectiveness versus Efficiency

Every couple of years, the tabloid media target charities that 'waste money on fundraising and administration'. So what can you do to protect your charity from this charge?

It's something we're all familiar with and can be very damaging if your charity is labelled in this way. Donors will certainly think twice about supporting you again and unless you can make a strong counter argument, you may well see people cancelling their direct debits too.

The fundamental problem is essentially a misunderstanding of what to measure when judging the impact of giving. The media standard has so often been pence in the pound on admin and/or fundraising. But this is a measure of efficiency, which tells us nothing about the impact you are making.

What we should be measuring, of course, is effectiveness. It is far more important to know when giving money to a charity how many lives can be saved, how many people healed of a disease, how many acres of rain forest protected etc. This after all is what charities are really about - making a difference in the world. Of course we should not be wasting money, but to measure efficiency above effectiveness is surely barking up the wrong tree.

So what can you do to protect your charity from the assault of the tabloids and persuade sceptical donors that you are worth their investment?

Firstly, know what your costs are and know how to explain them when asked. Practise this on your mum or your gran and see if it convinces them. Then when the journos come a-calling, you will be prepared for their questions. If your costs do seem high of course, this may need to be addressed in your budget and next set of accounts.

Secondly, identify some simple unit costs which demonstrate your effectiveness ('it only costs us X to achieve Y'). With a calculator and a bit of thought, you should be able to come up with some impressive sounding figures.

Thirdly, use these examples of your effectiveness (and cost effectiveness) in your communications. Try to set the agenda with your supporters and lead them into your way of thinking. Then when the media are pushing their 'wasteful charities' line, you will have given your organisation a degree of protection.