charity efficiency

So someone suggested last night that Oxfam waste our money. The specific claim being (if i remember right) that ‘there was a report’ saying that even though they pay less than the commercial sector to their employees, and they use volunteers to do work for free, they are still an inefficient beaurocracy squandering cash in only the way well-meaning but incompetent lefties can.

Well, I couldn’t find any hint of this report by looking on the internet, although i did find this from Oxfam Ireland

We strive to keep our administration costs to an absolute minimum in order to ensure that the value of each euro/pound that you donate is maximised. During the 2002/2003 period, 90 cent/pence in every donated euro/pound went towards supporting our overseas programmes and campaigns work…When you make a donation to one of our Emergency Appeals, 100% of your donation goes directly to that Emergency relief effort…Did you know that for every pound or euro donated, there is the possibility of us raising a further four pounds or euros from other European (both government and other institutional) funding sources?

The annual report of Oxfam UK (the third biggest charity in the UK, incidentally) gives their accounts. So, next, I looked at this and the accounts for Cancer Research UK (who are the biggest charity in the UK) and two other international development charities – Christian Aid and Action Aid, comparing the total income, charitable expenditure and admin and management costs for each charity.

So Oxfam have about the same admin costs as other international development NGOs and about the same charitable spend as another charity of comparable size. But I guess a lot depends on what they include under ‘charitable spend’. This here is a pretty crude index of efficiency.

Simply put I don’t have the expertise to assess if, or if not, Oxfam are being more or less inefficient that anyone else. What they do, and the scale they do it at, makes comparisons difficult. My ignorance of the subject doesn’t help either. Does anyone have any advice or leads on this – i’d love to hear more about how to tell if a charity is spending money well?

This guy seems to have looked into it and to have been satisfied with what he found out. There’s an article about league tables of charity spending efficiency, and why they can be misleading, here, which seemed important.

For me I think the more important thing is what the money is being spent on (which is what I think Emily was getting at when she started the conversation and concluded by saying, “I just don’t want them spending my money on bibles” i guess). Given that Oxfam operates in 75 countries, provides emergency disaster relief but also – and this is the majority of their work – invests in long-term development work, including lobbying and policy work to challenge the institutions and structures which keep under-developed parts of the world under-developed, I’m going to continue giving them my money and not worry about the efficiency which which they spend it – it’s got to be better than not giving anything at all.

Oxfam International
The Trade Justice Movement