Charity case

The Children's Society, Barnados and NCH put 70-80% of their budgets into children's services

The National Society for the Prevention of Cruelty to Children (NSPCC) has come under fire for spending �38m on fundraising, administration and campaigning, compared with �28m on children's services.

Yet the NSPCC said its advertising campaign against child abuse was as important to its aims as providing services for children at risk.

Andrew Watt, head of policy at the Institute of Charity Fundraising Managers, says the set-up costs for such a campaign are invariably high.

Although the campaign may run for up to 10 years, these costs distort the accounts into appearing admin-heavy in the early years.

Too ambitious? The NSPCC campaign aims to wipe out child abuse

"It's a distressing picture, and does not represent what an organisation is trying to achieve over time," Mr Watt says.

Charities which use face-to-face fundraisers to recruit direct-debit donors run into similar difficulties, he says.

The cost of training and employing teams of fundraisers is high. But once a donor is signed up, the standing order lasts six years on average.

"Spread over six years it's a phenomenal return," he says.

Goodwill v good marketing

Charities have long relied on marketing to get their message across - and in the information age, an organisation that is backward in coming forward risks missing out on donations.

NSPCC recruits celebrities to spread its message

"Fundraising is about creating a one-on-one relationship with a donor - you are trying to speak to them as an individual.

"And that's a relationship where good marketing plays a crucial role."

Although the 1990s saw a decline in donations, the British public has become more generous in the past three years, Mr Watt says.

And donors generally understand that fundraising comes at a price - but many overestimate how much actually goes into the administration pot.

Working hard for the money

220,000 registered charities in the UK 500 organisations share 95% of funds raised (�2.7bn)

"A study found that many thought that it was 60%, whereas the reality is about a quarter to 30% on average," Mr Watt says.

Yet a cursory glance at figures in the NSPCC's annual accounts could put off givers, he adds.

"We live in an age when people lack faith in institutions - and charities aren't immune to that."

Unless charities take the opportunity to explain where the money goes - and why - we could become a nation of non-believers.