People more likely to want lower charity reserves when talking money instead of months

• When asked how many months expenditure a charity should keep in reserve, the average of people’s responses was 7.3 months
• Just 4% said up to 1 month, while 1-3 months (17%), 4-6 months (18%) and 6 months to 1 year (20%) were the most popular options
• Just 10% said over 1 year, with 12% saying whatever the charity feels is right
• This average falls when people are asked about actual figures, equating to just 3-4 months of reserves
• When asked to imagine they donated to a £12m charity and to decide what figure of reserves they’d be happy with, 24% said £1m and 26% said £3m, with the average at just under £3.6m
• 9% said £6 million was the right amount, while 5% of respondents wanted to see the charity hold back more than that
• 14% were happy with whatever the charity decides

More than half of people think charities should be out spending their money rather than saving it, according to research out today. The poll, carried out by research consultancy nfpSynergy, reveals that over a third of think charities should have less than six months’ worth of expenditure in reserves. It also shows that people are more likely to agree charities need larger reserves when talking in months, rather than actual money.

The nationally representative study saw 1,000 British adults asked what they thought was the lowest amount of expenditure it would be wise for a charity to keep in reserves in case income dropped. The average choice was 7.3 months, with 20% of people saying six months to a year and 18% saying four to six months. 12% were happy with whatever a charity decides. Some people were happy to see very low amounts saved, with 17% saying 1-3 months and 4% saying less than a month, while just 10% felt more than a year was necessary.

However, when asked their opinions on actual figures in reserves, the average amount equated to three to four months, with half of people comfortable with charities having three months or less. Asked to imagine they were donating to a charity with an income of £12 million a year and to decide how much that charity should keep back, 24% thought £1 million and 26% chose £3 million. 14% were happy to leave it to the charity’s judgement. 9% said £6 million was the right amount, while 5% of respondents wanted to see the charity hold back more than that.

nfpSynergy’s Driver of Ideas, Joe Saxton, said:

Whenever we ask about the reasons people don’t give to charity, the most common reason is always ‘not enough money being spent on the cause.’ The message from this new research is clear; people don’t want to see large amounts of money tied up in reserves rather than going to the cause. Put simply, donors don’t want their donation sitting in a bank account for years to come.

Our research shows that people are comfortable with higher reserves when talked about in terms of months. If charities want to keep some money back, they need to publicise this as ‘X months’ worth’, not ‘£X million pounds’.

Overall, our view is that if charities want to respect the views of their donors, they need to spend the money they raise on the fantastic work they do and show the results of this to the world. The public clearly value having an impact today and making a difference over saving money for a rainy day.

Please see the attached slides for more details.

For further comment from nfpSynergy’s Joe Saxton, please contact him directly on 07976 329 212 or joe.saxton@nfpsynergy.net

SOURCE: nfpSynergy’s Charity Awareness Monitor, which regularly surveys a representative sample of 1000 16+ year olds throughout mainland Britain, January 2014 wave.

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MEDIA COMMENT:

To interview nfpSynergy’s Joe Saxton about these findings, please contact him directly on 07976 329212 or joe.saxton@nfpsynergy.net. If you cannot contact Joe, please contact Rob White (07739 463786; E: rob.white@nfpsynergy.net) for further assistance.

Note to editors:

nfpSynergy is a research consultancy that aims to provide the ideas, the insights and the information to help non-profits thrive.

We have over a decade of experience working exclusively with charities, helping them develop evidence-based strategies and get the best for their beneficiaries. The organisations we work with represent all sizes and areas of work and include one in three of the top 100 fundraising charities in the UK.

We run cost effective, syndicated tracking surveys of stakeholder attitudes towards charities and non-profit organisations. The audiences we reach include the general public, young people, journalists, politicians and health professionals. We also work with charities on bespoke projects, providing quantitative, qualitative and desk research services.

In addition, we work to benefit the wider sector by creating and distributing regular free reports, presentations and research on the issues that charities face.