During the month of Ramadan, we often hear charities marketing “100% donations” or “no admin costs” – buzzwords that imply your donations only go to those in need and are morally and spiritually superior to those that charge an admin fee. However, we question how ethical and transparent these practices are and want you to understand that admin fees are not the bogey man that some campaigns make out to be!
For this article, we have worked with Islamic Relief to help breakdown why admin costs are necessary. While this is a paid partnership*, however, we are in full support of the article below. You can find out about their work here.
Admin fees can help to maximise your donation, increasing the impact of each pound that you donate.
Simply put, a donation with an admin fee is still a 100% donation.
Here are just 7 out of many reasons why you shouldn’t measure a charities impact based on if they charge an admin cost.
1. Delivering Aid To Those In Need Costs Money
When you are donating money you are trusting that the charity is able to get that money to those who need it. Sometimes those people live in another country or are hard to reach. Admin costs also are used to account for rent for buildings, insurance admin staff salaries, volunteer expenses, equipment, as well as governance costs e.g. audits to comply with legal obligations and Charity Commission rules.
Charities like Islamic Relief ensure that it gets the best value for your donation. Your donation goes towards delivering aid on the ground as well as raising more funds for the people who need it the most.
2. Admin costs can increase your impact
Admin costs can be used to increase the impact of your donation. For example, at Islamic Relief for every £1, 87p goes directly towards the people in need for that specific project, 4p goes towards administrative costs to help to deliver the aid e.g. (insurance, volunteer expenses and equipment) and finally 9p goes towards raising more funds. For each £1 raise, the 9p is used to raise another 90p! That means your donation is almost doubled!
3. Admin fees do not reduce the impact of your Zakat.
A zakat donation with an admin fee is a 100% donation.
In the Qur’an, Allah (SWT) tells us that Zakat is designated for eight categories of people, including:
“…those employed to administer the funds…” (9:60).
Since there are eight deserving categories, each is entitled to a proportion of 12.5%.
Accordingly, charities like Islamic Relief allocate a maximum of 12.5% for the purposes of administering the funds in line with Shariah guidelines.
4. What about charities that claim to not have an admin cost?
All charities have expenses to cover, whether that is salaries, rent, accountants or supplies. Charities who claim 0% admin costs on your donations, are likely to be funding the admin costs with alternative donations.
These alternatives include corporate donations, gift aid, grants or profits from activities like charity shops.
Charities like Islamic Relief believe it is more appropriate to show that admin costs are necessary, rather than to hide them, to encourage transparency in donations.
With Islamic Relief, your donations are in safe hands.
For every £1 you donate:
🤗 87p to helping those in need
👩💻 4p toward admin costs
📈 9p to raising more funds
For every £1 we use for fundraising – we raise £10 more! 💪
— Islamic Relief UK (@IslamicReliefUK) April 16, 2020
5. Admin costs cover costs of staff and volunteer costs
While charities like Islamic Relief rely on over 3000 volunteers, the staff that work at charities are those with specialist skillsets like fundraising, international development or marketing. This enables work to be delivered at a high standard so your donations are spent effectively and in a way that has the most impact.
At charities like Islamic Relief, 95% of their overseas staff are local residents who come from the communities they serve, ensuring that the salaries they receive go back into the local community and economy.
If we don’t cover the costs of volunteers and salaries we can easily create a barrier to entry to working in charities. Individuals should not have to choose between working for a for good cause and looking after their basic needs and their families because they are unable to make the economic sacrifice.
6. Your money can also help to create policy change through campaigning.
Many of the individuals that charities are trying to help, are in dire situations due to structures of inequality. While monetary donations and items such as clothing, food and books can help to relieve those in need, we must also look at the root causes of poverty, inequality and injustice.
Campaigning on issues such as gender justice and climate change contributes to ending policies and practices that exploit women and girls and damage the environment. Raising awareness of these issues mean those that are affected can be further positively impacted through policy changes as well as increased donations due to awareness.
Campaigning and lobbying governments also help charities bring in extra funding from bodies and organisations, meaning even more aid and a greater impact on lives.
7. High-performing charities actually spend more on administration than weaker charities.
Investing money into skilled staff, equipment and resources, should not be seen as the antithesis of creating impact and changing lives. Frugality is not to be equated with piety, especially where there are real lives to be impacted.
Charities invest in the equipment and infrastructure they need to ensure they are able to do their work efficiently and keep their staff safe. For example, just encrypting your donor details and keeping them safe costs money and is not something that should be skimped on. If you are concerned about a charities spending, you can always look at their annual reports and read about them on the Charity Commission website.
Without admin costs, those that you intend to help may not receive the aid they need, when they need. Admin costs are a necessary cost as a means to increase the impact of donations which allow us to fulfil our spiritual duties. While we rush to do good deeds and consider giving zakat and sadaqah, let’s remember that admin costs are needed in order to achieve the lofty goals that charities set our to achieve.
*Every now and then we partner with companies to bring you sponsored content, this helps us keep going at Amaliah. We strive to ensure we maintain the same editorial integrity that keeps you engaged in our non-sponsored content.
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