Financial integrity - how to make sure you’re giving safely
Is the charity registered?
- The Charity Commission is a government organisation which regulates charity activity across the UK. All legitimate charities have to be registered by them and they make sure that charities are acting legally. They also provide information about the charity – including information on how they spend their money – to the public via their website.
- Check the organisation is actually a registered charity. There should be information about this on the charity’s website (check to see if they have a registered charity number on their site – it’s often in the footer at the bottom of the page), or on any communications they send out. However it’s still better to be safe than sorry, so it’s worth taking a moment to search the Charity Commission’s register.
Check where your money is actually going
- Ideally you want to make sure that as much of the money you give goes where you want it to. Where you want it to go obviously depends on your priorities: do you want your money to go directly to the programmes the charity offers or would you like it to help cover the admin side of things, ensuring the charity can keep doing what it does?
- Check whether the charity offers you a choice – can you dictate where your money goes?
- Does the charity offer a breakdown of their financials on their website? All reputable charities should do this, but if you can’t find what you’re looking for, you can ring them and ask for a copy.
- Check if the charity has the Fundraising Standards Board (FRSB) tick on their website and materials. This means that the charity is regulated by the FRSB and is following fundraising best practice.
Accountability and transparency
All charities should be a) accountable for the actions they take and b) transparent, open and honest about the way they operate, decisions they make and the way they communicate.
Top things to keep an eye on:
- Are the communications sent out by the charity clear and easy to understand, free of technical jargon and confusing explanations? Has the charity acknowledged mistakes it has made and actively learnt from them? I.e. has it changed its working practices in accordance with lessons learnt?
- Does the charity provide definitive statements about how it spends your money? Too many charities are unclear on how they spend their money.
- What do their annual reports say about their expenditure? Check what their expenditure is, specifically the amount spent on charitable activities. The greater the amount spent in this area, the better – generally speaking. Ideally, the charity should be spending at least 80% of its income on charitable activities; this means that the money is actually going to the cause and gives you pretty solid evidence that they are having an impact.
- You also want to check that the charity isn’t spending significantly less than they have coming in – this is a pretty big red flag.
- Is the charity happy to explain any of its actions (big or small) to you? Every charity asking for money should be more than happy to quell the fears of donors or potential donors. If you have any questions that aren’t answered by the FAQ section that most charities have on their website then don’t hesitate to drop them an email or pick up the phone.- Similarly, be wary of charities that spend a significant proportion of their income on administration. Of course charities need to spend money on admin, otherwise they wouldn’t function well, but if they are spending a lot of money in this area it implies that they run pretty inefficiently.
- Is the charity transparent about the salaries of senior staff? One thing to bear in mind is that different people have different opinions about how much CEOs and senior managers in the charity sector should be paid, so what may seem outrageous to you may in fact be reasonable.
Giving safely online
Sharing your information online is safer than it’s ever been, but it’s still worthwhile following the golden rules:
- Go directly to the charity’s website. If you don’t know the exact web address, then use a search engine such as Google, Bing or Yahoo to help you find the charity you’re looking for. Only enter your details if you’re confident the site you’re on is legitimate – using a trusted search engine to find the site, or typing the website address in yourself, are usually good guarantees.
- Check if the site you’re using offers SSL safeguards on its donation forms. These applications protect you by making sure any information you enter remains private and secure. There’s a simple way to see whether SSL safeguards are in place. Just look at the left hand of the URL bar before the https:// part of the web address and if there’s a padlock icon there, you’re good to go. The padlock indicates a secure link.
So now you know what to look out for to ensure you're giving safely, it's time to choose how to donate - cash, credit card or child sponsorship. Our guide on the best way to give to charity gives you the lowdown on over 10 different ways to give...