Many people believe that charities waste money on ‘administration’, and hence that the best charities spend little on administration. A strong form of this view is that the best charities are by definition those which spend little on administration, i.e., you can tell how good a charity is just by looking at their admin costs: one sometimes hears this view.

’s nonsense. The amount that charities spend on administration is (probably) totally unrelated to whether they’re intervention is any good. If I have an intervention which, to take a real example, is supposed to decrease the number of vulnerable teenagers who get pregnant, but in fact does the opposite and increases it, then it doesn’t matter how low the administrative costs are: the fact is that the intervention doesn’t work. As Michael Green, co-author of Philanthrocapitalism: How Giving Can Save The World says: ‘A bad charity with low administration costs is still a bad charity’.

Read the full article about charity performance and admin costs by Caroline Fiennes at Giving Evidence.