The Institute of Chartered Accountants in England and Wales (ICAEW) have published a new guide for charities entitled, ‘Dispelling common myths about charities’.
In addressing the 10 most common misconceptions around charities, the guide raises some important questions for trustees to consider, whilst also helping to promote transparency and a positive public perception of the sector.
With around 200,000 charities registered with charity regulators in the UK and a hugely diverse range of services and aims – it is key that the public has confidence in the charity they are supporting.
Neil Heslop, CEO of the Charities Aid Foundation, wrote in a recent blog about a decline in the number of people giving to charities for the past five years, a situation intensified by the cost of living crisis. Charities are dedicated to their cause, however the public needs to trust this to keep pledging their financial commitment.
If a charity operates effectively, is financially sustainable and invests their funds in a meaningful way, this naturally helps them to grow and thrive. When the majority of charities are run in this way, there is an increased understanding and professionalism within the sector and public opinion is not as easily swayed by isolated incidents of malpractice.
The 10 misconceptions around charities that the guide focuses on are
- Charities spend too much on fundraising.
- They should not make a surplus or build up cash reserves.
- Too much is spent on highly paid executives.
- They should not undertake commercial activities.
- Charities should be run and staffed [for free] by volunteers.
- Too much is spent on overheads.
- Charities don’t pay taxes, so need less money.
- Professional qualifications are needed to become a charity trustee.
- Charities are less vulnerable to fraud than other organisations.
- Charities should not engage in campaigning and political activity.
Within each of the 10 areas, the guide offers constructive advice on how to tackle the specific misconception, helping trustees to think clearly about any action they need to take when setting up and running a charity.
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