“O you who have believed, if there comes to you a disobedient one with information, investigate, lest you harm a people out of ignorance and become, over what you have done, regretful.” (Quran, 49: 6)
It has come to our attention that a status is being shared on social media, ranking charities according to the percentage of their income given to charitable spending.
For those who post and share it – please think very hard about the damage that you are doing to the good work of charities and individuals.
Charities rely on this month of the year to raise funds to support beneficiaries for the rest of the year and these messages seriously harm these efforts.
Although the message is over a year old and based upon erroneous figures (the actual figure for the year in question was 84%, and was 80% in the accounting year prior to that), the following points are important to bear in mind:
- The author has taken the total percentage of charitable spending from the annual expenditure rather than income; the latter includes the retained funds that a charity will then utilise in the coming months after those accounts were submitted, much of which will be used for beneficiary/charitable expenditure.
Small charities like HHUGS rely upon retaining funds to ensure we have some contingency to support our families. This is all the more important in the increasingly uncertain financial landscape in which we work.
Just as a small example with HHUGS the subsequent spends changes from the 68% presented to an 85% charitable spend. The “retained” figure was used up shortly thereafter, in most years the retained figure was less than in this financial year presented (2015-2016).
Even with the corrected figure of 84% “charitable spend”, HHUGS was the only charity listed with an income below £1 million.
- Using percentages is misleading as the incomes of the charities vary massively. What is 15% to one charity will be 100k and to another much larger charity, that will mean 2.3 million spent on “income generation/governance”. Presenting the admin expenditure in figures rather than percentages enables everyone to make informed decisions.
- The way the figures have been put together fails to reveal the full extent of donated income and how it is spent. The author and those circulating the post have made the assumption that all income comes from grassroots donations from individuals, who now have been misled to believe that their donations are not reaching people in need; it fails to take into account that for many of these charities, their income will include Gift Aid, grant or corporate funding, or finance from a social enterprise. It does not allow for the fact that some of the income may have been specifically for the purpose of admin costs.
Larger charities are able to pay for building, staffing and resource costs from the Gift Aid they receive because they raise tens of millions annually, but in the case of smaller charities like HHUGS, with a very modest income and subsequently smaller amounts of Gift Aid, they will be unable to cover their admin costs in their entirety through Gift Aid.
HHUGS does not receive millions of pounds a year, nor do we receive any corporate or trust funding currently. We have a modest income and close to 200 vulnerable families to support who look to HHUGS alone to stand by them when the rest of the community have abandoned them. We rely on ordinary Muslims like you giving small amounts to enable us to continue supporting vulnerable families every day. We can assure donors that any zakah or restricted donations received are used solely for their intended purpose for the beneficiaries and not on any admin costs. We humbly ask you reflect on the damage these posts do and do the opposite of what they expect you to do. Instead of withholding your support, dig deep and commit to supporting the families HHUGS supports.
May Allah reward your efforts and make this a fruitful Ramadhan for you and your families.
https://www.hhugs.org.uk/Ramadhan
Text RAMD99 £10 to 70070