Can we trust charities to handle our donations well?

As Christians, many of us feel a deep responsibility to give generously to those in need, but if we’re honest we can also sometimes feel a sense of doubt around the reliability of those we give to.

The recent Stewardship Generosity Report highlighted that trust of charities was certainly a significant issue. Around a third of respondents indicated that one of the main barriers to giving was that either they were not confident that recipients would spend donated money well (15%) or they worried that too much of their donation would be spent on administration (19%).

Thinking like this is certainly understandable but it's not ideal. It can cause us to hesitate in giving and lead us to mistrust the organisations doing vital work in areas like poverty relief, disaster response and social justice, even though we desperately want to help.

We want to remedy that. So, we’re going to look at seven commonly held beliefs around how charities use their funds. These are common issues that people think about, but as organisations like the ICAEW have helpfully pointed out, many are misconceptions/myths. 

In addressing the points below we'll look at what a Christian donor response should be because we know there is a better reality at play, and we want to reveal that to you. We firmly believe that any issues of trust can be allayed with right thinking, and this is evidenced by the strong work of churches and charities that we work with. 

Leaning into our own unique perspective we hope to instil in you a sense of trust in those who you want to support, and to encourage you into more joyful giving that aligns with our shared Christian values of good stewardship, generosity and love for our neighbours.

 

Misconception 1: Charities spend too much of their donations on their admin and marketing

Let’s start with a very widely held belief – that charities spend too much on their administration and marketing. This leaves a smaller proportion of our donated money for creating impact on the frontline of the work we want to help with.

The reality: Admin and marketing are essential for charity effectiveness

Administrative costs are necessary for any organisation, including charities. These expenses cover essential functions such as financial management, compliance and staff training, all of which are crucial for the effective operation of the charity. Without these, a charity cannot manage its resources effectively, potentially jeopardising its reputation and mission.

Marketing, too, plays a vital role in a charity’s success. It helps raise awareness of the cause, attracts donors and engages the public. Far from being a waste of money, effective marketing ensures that a charity can grow its support base and increase its impact.

As Christian donors, we should view administrative and marketing costs as essential investments in the charity's ability to do good work. Without the transparency and accountability these functions bring, we would probably be in a much worse position with regards to trust.

Misconception 2: Charities pay their staff too much money

Another widespread line of reasoning, quite closely linked to the first one, is that charity staff are overpaid. This can lead some of us to question whether our contributions are being used effectively or whether they are being used to unduly line someone’s pockets.

The reality: Fair wages attract, retain and reward skilled professionals

Charities, like any other organisation, need skilled professionals to operate effectively. Competitive salaries are necessary to attract and retain the best talent, which in turn ensures the charity can fulfil its mission effectively. Charity staff often work in challenging environments requiring expertise, dedication and passion. By offering fair reward for that work, charities can maintain a motivated workforce, ultimately leading to greater impact.

As Christians, we are called to treat others justly, including those who work in the charity sector. Supporting fair wages for charity workers is not a misuse of funds but an investment in the quality and sustainability of the charity’s work and a blessing to those who choose to work in that invaluable sector of the economy.

Misconception 3: Charities should not make a profit 

Some donors believe that charities should operate on a break-even basis, with all funds being spent immediately on their cause, and that building up reserves is unnecessary or even unethical.

The reality: Reserves are crucial for stability and longevity

All organisations need financial stability to continue their work, and that includes charities. Building up reserves allows charities to weather financial uncertainties, such as unexpected drops in donations or economic downturns. These reserves also enable charities to plan for the future, invest in long-term projects and respond quickly to emergencies.

Profit in the context of charities does not mean private gain; it means financial sustainability. A surplus at the end of the year allows a charity to reinvest in its mission and ensure that it can continue to serve its beneficiaries effectively.

As Christian donors, understanding this helps us appreciate the importance of financial prudence in ensuring that charities can fulfil their God-given missions over the long term.

Misconception 4: Charities should not spend money on fundraising

There is a belief among some donors that a charity spending donated money on fundraising is wasteful. The line of reasoning is that every pound spent on fundraising is a pound taken away from the cause.

The reality: Fundraising is essential for expanding impact

Fundraising is not just about collecting money; it’s about building relationships, raising awareness and ensuring the charity can continue and expand its work. A successful fundraising campaign can generate far more income than it costs, allowing the charity to do even more good.

For example, if a charity spends £1000 on fundraising and generates £5000 in return, that’s a highly effective use of financial resources. Effective fundraising also helps build a community of supporters who are committed to the charity’s mission, leading to sustained giving and greater impact over time.

As Christians, we should see fundraising not as a cost, but as an investment in the future of the charity and the work it is doing in the world.

Misconception 5: Charities need less because they are tax exempt 

Another misconception is that because charities don't pay tax, they don’t need as much financial support from donors.

The reality: Tax exemption helps charities maximise their impact, not reduce their need for support

Charities are often exempt from certain taxes, but this does not mean they don’t need donations. Tax-exempt status simply allows charities to devote more of their resources to their mission rather than to paying taxes. This tax relief helps charities maximise their impact, but they still rely heavily on donations to fund their work.

The need for donations remains critical because tax exemptions do not cover the full costs of running a charity. Charities still have to pay for staff, programmes, infrastructure and other operational costs.

For Christian donors, understanding this can reinforce the importance of continued and generous giving to support the causes we care about.

Misconception 6: Charities should be politically neutral

Some people believe that charities should stay out of politics altogether and focus only on their direct charitable activities.

The reality: Advocacy and policy work are integral to many charities’ missions

While charities must remain non-partisan, this can still advocate for political change in areas that impact their work. Many charities engage in advocacy and policy work to address the root causes of the issues they are tackling. For example, a charity focused on poverty relief might advocate for policy changes that address systemic inequality, which is a key driver of poverty.

Engaging in policy work is often essential for achieving long-term change and aligns with many Christian values, such as seeking justice and caring for the marginalised. When charities work to influence public policy, they are acting on behalf of the communities they serve, often giving a voice to those who are otherwise unheard.

For Christian donors, understanding the reasons for political engagement in connection with a cause will mean that they can better comprehend the heart behind the charity’s mission.

Misconception 7: Charities are untrustworthy

Finally, there is a lingering belief that charities are not transparent or are misusing their funds, leading to a general mistrust of charitable organisations.

The reality: Reputable charities are highly regulated and committed to transparency

In the UK, charities are subject to stringent regulations and oversight. The Charity Commission monitors and regulates charities to ensure they operate legally and ethically. Most reputable charities are committed to transparency and regularly publish detailed reports on how they use donations, ensuring that funds are spent effectively and in line with their mission.

As Christians, it’s important to do our due diligence when choosing which charities to support. By researching and selecting reputable charities, we can give with confidence, knowing that our donations are being used wisely and for the intended purpose.

Give with wisdom and confidence

As Christian donors, it’s important to approach charitable giving with both generosity and discernment. By understanding the realities of how charities operate, we can dispel common myths and make informed decisions that align with our values.

Our donations are not just financial transactions; they are expressions of our faith and our commitment to helping others. When we give with wisdom and confidence, we can be assured that our contributions are making a real difference in the world. So, let’s continue to give generously, with open hearts and informed minds, trusting that God will use our gifts to bring about His purposes.

Giving with Stewardship is a great way to give confidently. Our 13,000 registered partners are subject to Stewardship’s detailed and robust application and approval process to ensure they meet charity standards and our Christian charitable objectives. We can also request partners to provide us with follow-up reports that demonstrate how the funds were spent.

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