Internal expenses eat up charity revenues
Sports foundations promising to do altruistic work with publiccontributions are spending too much on fundraising and administrative,says the organization representing Canadian charities.
Sports foundations promising to do altruistic work with public contributions are spending too much on fundraising and administrative, says the organization representing Canadian charities.
A Toronto Star investigation reported the country’s most high-profile sports charities — including the six Canadian NHL club foundations — routinely spend between 40 and 65 per cent of their revenues on internal expenses.
“It’s definitely on the high side in terms of what widely perceived to be acceptable in the sector,” said Cathy Barr, vice-president of operations with Imagine Canada. “The reasonable donor that has some understanding of these issues thinks the 15 to 20 per cent range (for fundraising and administration) is acceptable.”
Experts interviewed by the Star also said well-run charities should be keeping overhead costs to around 20 per cent. Anything above 35 per cent triggers the interest of the Canada Revenue Agency. Five of the six Canadian NHL club foundations sit above that CRA threshold, the Star investigation found.
Only the Montreal Canadiens Children’s Foundation reported fundraising and administrative costs at below 20 per cent last year.
Imagine Canada has a voluntary ethical code that sets standards for charities around fundraising and financial reporting practices.
About 300 of the country’s 83,000 charities have signed on to the code introduced in 2007.
None of the country’s major sports foundations are among them, said Karen Alebon, who runs Imagine Canada’s ethical code program.