In today’s Guardian I am delighted to see an article stating that
Donors should not favour charities that have low administration costs as they are likely to be low performers, new evidence has suggested.
As an arts manager I obviously believe that charities should have good administration at their core. I think that a strong set of processes to manage a company allows for greater freedom and flexibility, but that does come at a price.
It is great to see some research backing this up, as at the moment, with so many trusts and foundations reducing the amount of money they spend many are refusing to cover core costs.
For the non-initiated, core costs cover admin, the General Manager, the office/desk space, phone, internet and all those other boring things. They are boring compared to a wonderful project which makes a difference in a poor area, however if there isn’t someone invoicing and chasing invoices, managing the website and updating the spreadsheets, keeping funders informed, looking for the next lot of funding etc then the creatives wouldn’t have the money to do the creative work.
As such many end up hiding core costs, or worse, forgetting about them, until they realise that they can no longer pay someone to do the long term strategic thinking, planning and implementing and they are going to have to close down.