Exclusive: Which aid relief charities spend the most on fundraising?

Reuters News
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Posted: Jul 14, 2015 8:07 PM

By Tom Esslemont

LONDON (Thomson Reuters Foundation) - As the business of international aid booms, rival charities are locked in a race to attract donors with some spending close to a fifth of their resources on fundraising, a Thomson Reuters Foundation investigation has found.

A survey of the world's 50 biggest humanitarian non-governmental organizations (NGOs) by expenditure found their total annual spending has more than doubled to $18 billion in the last 10 years - greater than the national GDP of one third of the world's countries.

The growth has come as more public money is funneled to victims of disasters and conflicts.

The competition for funding is driving NGOs such as World Vision, Save The Children and Oxfam to invest more on attracting cash. The survey found that almost $1.5 billion (6.6 percent of total expenditure) was spent on fundraising in 2013-14, compared to an estimated $500 million (5.8 percent) in 2003-04.

But in an unregulated sector that spans the globe, readily comparable data on spending is not available, experts say.

"There is still not enough accountability in the sector and often the data is only as good as that which charities are prepared to put forward," said Robert Bourgoing, head of AidInfoPlus, an aid transparency website.

The Thomson Reuters Foundation's first annual survey on the Business of Aid shows that ActionAid spends the biggest share of its resources on fundraising at 17.4 percent.

ActionAid said its fundraising costs vary across the 10 developed countries and emerging nations where it seeks cash for its mission to protect human rights and defeat poverty.

"Internationally, however, the fact remains that for every dollar we invest in fundraising we see a return of nearly five times that much that we spend on transforming people's lives," a spokeswoman for ActionAid said.

ActionAid is followed by Plan International at 14.18 percent and the medical charity Médecins Sans Frontières (MSF) close behind at 13.8 percent, though differences in accounting procedures make exact comparisons difficult.

An MSF spokeswoman said the charity relied heavily on private fundraising that is more costly than seeking donations from institutions and government grants.

DIFFERENCES IN ACCOUNTING

The biggest 25 NGOs said their fundraising costs generally included staffing, communications and marketing but other charges may be included in program budgets.

Of the largest 25 NGOs surveyed, seven spend more than 10 percent of their revenue on fundraising, six more than 5 percent and 12 less than 5 percent.

Andrew Natsios, a former head of USAID, the United States government aid program, and a former vice president of World Vision U.S., said standards in aid accountability have been strengthened in recent years.

"But NGOs, which are engaged in saving millions of lives, are not always wildly enthusiastic about adhering to them. So, could they make better use of the cash they raise? Absolutely," said Natsios, who is now professor of International Development at the George H. W. Bush School of Government in Texas.

Bangladesh-based BRAC, the world's largest NGO by number of staff with more than 120,000 employees, said it had 'no active fundraising'.

Financial information for Acted, Direct Relief, Global Communities and the Norwegian Refugee Council showed less than 1 percent of expenditure went on fundraising.

"Seventy percent of our budget in Bangladesh is from programs which are self sustaining, including microfinance and social enterprises," a BRAC spokeswoman said, adding that minimal staff hours were absorbed by campaigning for donations.

NGOs taking part in the Thomson Reuters Foundation survey were also asked whether they paid celebrities for endorsing their work and on travel.

World Vision said it would be a "huge piece of work" to calculate the amount each of its operational sections spent on travel expenses.

International Medical Corps said it had spent $10,000 on celebrity travel expenses in the year 2014-15. International Rescue Committee and Save The Children said they covered celebrity travel expenses but did not provide exact figures.

Other respondents said celebrity travel expenses were covered but these were "minimal".

(Reporting By Tom Esslemont, Editing by Belinda Goldsmith; Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women’s rights, corruption and climate change. Visit www.trust.org)