ACEs High: The Media Loves Complaining about the Amount of Cash That Many Charities Seem to Be Throwing Away on Internal Bureaucracy, but How Concerned Should We Really Be about the Huge Apparent Variations in Administrative Spending across the Sector? Rob Paton Analyses the Results of a Recent CIMA-Funded Research Project to Find the Answer. (Accounting Charities)

Paton, Rob, Financial Management (UK)

I am told that a tabloid newspaper once parked some flashy cars outside the headquarters of Oxfam and took a photograph which it then published alongside an article denouncing the agency's overpaid administrators. That exercise in creative journalism took place many years ago, and public concern about the performance of charities has only increased since then. This often puts their management accountants in the firing line.

"How can you justify spending X thousand pounds or Y per cent of your total expenditure on bureaucracy?" the accountants are asked at the AGM. "How come A N Other Charity seems to be spending so much less on administration than you?" And there's the rub. Comparative measures such as the administrative-costs-to-expenditure (ACE) ratio are now much more widely available, and they vary considerably between charities.

But are these apparently large differences really a cause for concern? Until now, all we have known is that ACE ratios vary between fields of activity and also by organisational size (large charities seem to be more efficient). But even after …

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Publication information: Article title: ACEs High: The Media Loves Complaining about the Amount of Cash That Many Charities Seem to Be Throwing Away on Internal Bureaucracy, but How Concerned Should We Really Be about the Huge Apparent Variations in Administrative Spending across the Sector? Rob Paton Analyses the Results of a Recent CIMA-Funded Research Project to Find the Answer. (Accounting Charities). Contributors: Paton, Rob - Author. Magazine title: Financial Management (UK). Publication date: July-August 2002. Page number: 40+. © 2009 Chartered Institute of Management Accountants (CIMA). COPYRIGHT 2002 Gale Group.

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