The Importance of How Charities Spend Their Money

Times are tough. Let us be in no doubt that the world in which we live has changed a great deal over the past year or two. Much of this change is as a result of the downturn in the Worlds economic markets and the credit crunch that seems to have gone hand in hand with it.

It is as a result of people having less disposable income that the general public is demanding to know how their money will be spent when they donate to charities and good causes.

In fact, research just published has shown that over 60 percent of people who were questioned said that were worried over how much of the money they donate actually goes to the charity or cause in which they are making a donation. Combined with this over half questioned expressed concern that too much money was being spent by charities on administration rather than on the actual cause itself.

The truth is charities and businesses of all types have to more than ever justify what they do to their customers and in the case of charities their customers are their donors and volunteers.

So what can charities actually do to address potential donors concerns that their donations are being used as effectively as possible and not being wasted on admin duties?

Well from a donors point of view they could cut down on direct mail and focus their attentions on having interesting websites that communicate what they are spending their money on and what benefits are being made. A charities website could be updated in real time with news, events and items of interest available 24 hours a day, 7 days a week. Compare this with the time, effort and costs involved with a direct mail campaign targeting existing or new donors and you can see how many charities could reduce their costs and put their donors minds at rest.

Clearly not everyone has access to a computer but if more charities starting asking their donors how they wanted to the communicated with whilst at the same time asking for their opinions on how best they should use their money then they could carry out valuable market research at the same time as asking for donations.

Many charities, especially smaller charities, are struggling at the moment so feedback they receive from the general public should be encouraged and looked at in a positive way even if the feedback is negative.

Charities like all businesses in the modern world have to listen to their customers and whenever possible meet or exceed their needs. If for charities this means communicating smarter with donors on what their money is being spent on then so be it. Some charities and business will unfortunately go out of business in the coming weeks, months and years but those that listen and learn will have a far greater chance of succeeding.

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