As much as $11 million worth of donations to the Australian Red Cross Bushfire Appeal could be spent on administration fees, according to a recent statement from the organisation.
The news comes after the charity was forced to reevaluate their last financial plan, which suggested a large chunk of the funds raised specifically for this year’s ongoing bushfire crisis should be saved for future disasters. Obviously, this plan copped a huge amount of public backlash.
“We’ve got people in tents, on lounges, in caravan parks, in showgrounds, people sleeping rough on their burnt-out properties and they don’t want to hear about a three-year program,” Liberal MP for Bega Andrew Constance told press.
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A total of $115 million has been donated as part of the bushfire appeal to-date, up from yesterday’s $95 million estimate, but up to $11 million of that could be used to cover administration costs
Although $11 million sounds like an exuberant sum of money (and it is), this equates to approximately a 9.5% administration fee. A roughly 10% admin fee is considered to be pretty high for charities, but is far from abnormal.
Australian Red Cross director of emergencies Noel Clement also told 7 News that this figure was the maximum budget for administration costs, and that the actual figure would likely be significantly lower.
“We are not expecting to spend 10 cents in the dollar,” Clement said. “We have a commitment to spending no more than that.”
“We know from past experiences we tend to spend a lot less than that, and that’s what we will be working to do.”
While the thought of $11 million not going to the victims of the bushfires is enough to make anyone mad, the Australian Charities and Not-For-Profits Commission has previously stated that administration costs is not a fair measure to decide whether or not a charity is worth donating to.
“The main problem with using administrative costs to inform decisions about which charities to support is that the information is an unreliable indicator of the extent to which actual donations make a difference in the community,” The ACNC said, according to CHOICE.
“Some charities make a real difference in the community and have relatively high administration costs, and some charities may be less effective but have low administration costs.”
Despite the hefty administration fee, the Australian Red Cross has pledged to speed up its delivery of the much-needed funds. So far, the charity has delivered $7 million worth of funds in the form of 700 individual grants of $10,000.
“We’re now paying a million dollars a day and we’re keen to continue to speed that up, we know the assistance is needed now,” Clement said.
The Australian Red Cross’ Poppy Brown has also confirmed in an ABC interview that all of the funds will be used to help in the immediate and long-term aftermath of this year’s bushfire crisis, with funds being rolled out over the next three years. She confirmed that the money would not be held for future natural disasters like previously proposed.
I’m not saying the Australian Red Cross is the best charity in the world, but I’m also not saying it’s the worst. If you’re giving money to any charity or organisation, you should do your research to make sure that your views align, and that your money is going where you think it is.
If you’re interested in making any sort of charitable donation, you can check out the ACNC website to view the total income and expenditure of any registered not-for-profit in Australia before making your decision.
