New database will show how charity money is spent
The government has announced a commitment to create an open database of charity finances by March 2014. This will allow philanthropists to assess how charities spend their money.
A recent study by Ipsos Mori shows that lack of knowledge about how charities spend their money is one of the main barriers to trust and giving in the charitable sector. Almost half of people with low trust in charities (45%) feel charities “spend too much of their funds on salaries/administration”, while more than a quarter (27%) say they do “not know how charities spend their money”, and around a fifth (21%) believe charities “waste money”.
The database will consist of information from the annual returns sent to the Charity Commission from charities in England and Wales. It will give headline income and expenditure and show how charities with an income of over £500,000 allocate their revenue across fundraising and governance, charitable activities and reserves. This follows the recent launch of the beta version of DfID’s aid tracker, which allows UK taxpayers to see where their money goes, what it is being spent on and with what result.
It is hoped that this opening up of information will give greater insight into corporate governance, expose potential errors and abuses, and allow investors and donors to make more informed decisions.
Cabinet Office Minister Francis Maude said: “The data commitments . . . will strengthen the hand of citizens in holding commercial and charitable organisations to account.”
Meanwhile, HM Revenue & Customs has committed itself to a public consultation this summer on releasing parts of the VAT register as open data.
The Government has also published its response to the Shakespeare Review of Public Sector Information. Maude announced that the government would take forward implementation plans through the Open Government Partnership (OGP) National Action Plan and collaborate with data users to identify datasets that should be part of a new National Information Infrastructure, to be released by 2015. This process will give business, civil society groups and individuals a say on which are the most important datasets held by Government – particularly those that support economic growth – and allow them to more easily prepare for new dataset releases.
Ipsos MORI 2012 research on Public Perceptions of Charity:
The Government’s detailed response to the Shakespeare Review’s conclusions and recommendations