Website focus on charities a timely contribution to a sacred trust

By Tim Costello
CEO World Vision Australia 

Published in the Daily Telegraph and the Courier Mail on Wednesday 26 October, 2011

The move to make Australia’s charities more accountable with the establishment of a ‘my-school’ type website is to be applauded.

Charities such as World Vision, which is Australia’s largest overseas aid and development agency,  are built upon a ‘sacred trust’ in which donors expect their hard earned dollars to make a very real difference in the lives of those in need.

Donors are right to expect greater transparency. This is true now, more than ever, as charities in Australia experience a significant funding squeeze as the rising cost of living and ‘compassion fatigue’ starts to bite.

But it should be noted that there are also dangers when charities embark on a race to the bottom to boast the lowest overheads. And such league tables can encourage donors to ask the wrong questions when they are assessing where they should direct their money.

It can also be unhelpful to effectively compare ‘apples with oranges’ if you simply look at the overheads of one organisation against another in a sector which has tremendous diversity.

But let me say firstly, that I am pleased to note that World Vision sits among the organisations with the lowest cost of fundraising ratio. The comparison chart published in national media put our rate at 14 percent. In fact on our calculations our cost of fundraising is actually just 11 percent.

For the record World Vision has an administration rate of 9 per cent.

I am also incredibly proud that World Vision recently won the PricewaterhouseCoopers Transparency Award for the quality and transparency of its financial reporting.

World Vision works with the world’s poorest and when you consider a vaccination that can save the life a child can often cost just a few dollars, we strive hard to ensure as much money as possible reaches the field.

But there is a danger when we put such costs under the microscope across different charitable organisations. That danger is that we confuse efficiency with effectiveness.

We must make sure we are really asking the right question of a charity. And that question must not just be about their overheads but also about their performance. Are they actually making a difference?

To put it another way if someone you loved had a serious illness that required major surgery, you are hardly likely to be calling different medical centres to compare their overheads. Instead you would be asking about the survival rates they achieve for such an operation.

It should be no different with charities. Charities have to balance both effectiveness and efficiency. They have to ensure they get the very best people and processes to ensure the donations they receive not only reach the right place, but that the impact of these donations are monitored and evaluated to ensure constant improvement.

In the case of overseas aid, agencies could effectively put a cheque in the mail to Africa and boast a near zero administration rate. But donors rightly demand both efficiency and effectiveness.

In the case of overseas aid, donations do make a life changing difference. Scores of World Vision’s supporters have travelled to meet their sponsor children and witness firsthand the world of difference their regular pledge makes.

I have personally had the privilege of seeing the impact of our programs in many of the world’s poorest communities.

So it is my hope the charitably sector embraces the new ‘one-stop shop’ information portal. It is also my hope that this new facility will help increase the public’s faith in reputable charities.

Today, the famine in the Horn of Africa, in which some 13 million people have been affected, serves to highlight the incomprehensible suffering and need that World Vision responds to. We do it with the generosity and trust of everyday Australians. It is a sacred trust that we work extremely hard to keep.

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