# Problem

### Trust

On average, only 60% of donations go towards charitable activities. With some such as **Kids Wish Network only giving 5.8% to charitable activities!**

Statistics & stories such as these, have led to a massive shift in Trust to charities. In 2018 and even Feb of 2022 surveys showed [52% of people don't trust charities](https://www.cafonline.org/docs/default-source/about-us-research/uk_giving_2023.pdf) & 4.9m less people in the UK donated from 2019-2022. The latter statistic is partly due to Cost of Living crisis, however, only 17% say they will cut charity donations & [53% say the most important factor](https://today.yougov.com/society/articles/43434-charity-donations-yougov-poll-july-21-24-2022?redirect_from=%2Ftopics%2Fsociety%2Farticles-reports%2F2022%2F08%2F15%2Fcharity-donations-yougov-poll-july-21-24-2022) is "Knowing my funds will be used in a way that will do the most good".

### Lack of Technical Expertise

The [2022 CAF Charity Landscape report](https://www.cafonline.org/about-us/publications/charity-landscape) found **89% of charity leaders believe technological change is relevant to their charity. Yet only 24% report having the knowledge of how to do so!** In addition, 41% state they are increasingly adopting online fundraising & 50% see digital fundraising as a priority.

### Consultancy & 3rd party fees!

Just a simple Annual Impact Report can cost charities a minimum of $3.5k, and much more if it is a big charity. Let alone website creation, marketing, grant writing, etc, of which most charities pay some fees each year towards. The big charities especially tend to pay a lot of consultancy fees, anywhere from [$300-$2.5k/day](https://www.charity-fundraising.org.uk/fundraising-consultants-fees)!&#x20;

**Grant writing alone can cost a charity** [**$50k/year per writer**](https://fundingforgood.org/how-to-determine-grant-writing-fees/)**!**

These high fees see many charities, including smaller ones having to bow to these high fees. An overnight success, Captain Tom Foundation (Lockdown in UK success) left them scrambling to find out how to run a foundation. This attitude led them to spend [57.5% of funds used on administration & marketing costs, 10% of which went into "Fundraising Consultancy fees"](https://www.consultancy.uk/news/30465/captain-tom-foundation-investigated-over-consulting-spend).

Let's not even discuss the **fees regular banking can rake in from charities**. Among many other types of fees, a charity such as the one Tom volunteers for, can be charged up to 7% to transfer money from the UK to Africa. And that process will take 3 working days, with it being held longer sometimes.

### Quotes

> ***"**<mark style="color:red;">...the charity sector can no longer count on being given an automatic benefit of the doubt. The public wants reassurance that charities are behaving charitably</mark><mark style="color:green;">.</mark>**"*** \
> ([UK Government Report, 2019](https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/835686/Value_of_Charity_-_Oct_19_-_published.pdf))

> *“non-profit leaders are much more sophisticated about creating programs than they are about funding their organizations, and <mark style="color:purple;">philanthropists often struggle to understand the impact (and limitations) of their donations</mark>. There are consequences to this financial fuzziness. <mark style="color:purple;">When non-profits and funding sources are not well matched, money doesn’t flow to the areas where it will do the greatest good.</mark> Too often, the result is that promising programs are cut, curtailed, or never launched. And when dollars become tight, a chaotic fundraising scramble is all the more likely to ensue.”* \
> ([Stanford Social Innovation Review, 2009](https://ssir.org/articles/entry/ten_nonprofit_funding_models))

> *“<mark style="color:orange;">Charities must innovate</mark>, or risk stagnating. And when we talk about innovation, we're not just talking about snazzy new technology plays. <mark style="color:orange;">Innovation is about helping charities to be better</mark> - better in what they do, and better in how they do it. It's about solving problems, from <mark style="color:orange;">reducing inefficiencies and improving processes</mark>, to transforming internal cultures, to driving entirely new fundraising streams.”* \
> (Pollen8-Innovation consultancy- acquired by PWC, 2022)

### UK Charity Regulators' 5-year plan

* Influencing charities to ensure that <mark style="color:purple;">public expectations are met</mark> and shaping the debate about how charities thrive in a changing world
* Proactive intervention to <mark style="color:orange;">prevent and deal with harm and wrongdoing</mark>
* <mark style="color:orange;">Better data and information about charities which is easy to access and use</mark>&#x20;
* Providing charities with tools and guidance to enable them to continue to improve&#x20;
* **“Keeping charities relevant for today’s world”**
