Good charities spend more on administration than less good charities spend

Giving Evidence

Ground-breaking analysis by Giving Evidence disproves the popular idea that charities should spend less on administration.

This is the first analysis which shows (doesn’t just argue) that high-performing charities spend more on administration costs than weaker ones do.

So it’s unarguably wrong-headed of Parliament’s Public Accounts Committee to be considering limiting charities’ admin costs. It’s unarguably wrong of donors such as Gina Miller to suggest that admin costs be capped. The data indicate that such caps would nudge donors towards choosing weaker charities, at untold cost to their beneficiaries.  It’s time for this to change.

The analysis

Judging a charity’s quality  is hard. Some of the most rigorous analysis is by GiveWell, a US non-profit run by former Wall Street analysts, whose analysis is often dozen of pages. GiveWell looks for various sensible indicators of quality, including: a strong documented track record of impact; highly cost-effective activities; and a…

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