On Thursday 24th Sept, The Sun carried a misleading story about how much UK charities spend on their ‘charitable causes’ (as opposed to on things like fundraising, salaries and pensions).
According to the story, for every pound Cancer Research UK is given, ‘only 57p’ goes towards beating cancer.
This is wrong.
For every £1 donated to us, 80p is used to beat cancer, and below we’ve outlined in a lot more detail below about why the 57 per cent figure is inaccurate.
But first, we want to reassure our supporters: when you make a donation to Cancer Research UK, we spend your money wisely. With no government funding for our research, it’s only thanks to your generosity that we’ve helped double cancer survival rates in just 40 years.
We couldn’t have made this progress without you.
The charity sector has certainly had a lot of negative press this year, but we want to assure you that Cancer Research UK is at the forefront of best practice when it comes to fundraising. We will always be honest and transparent about where your money goes (and you can read our recent reports and accounts here).
You can be sure your money is helping us to accelerate progress, and achieve our ambition to see three-quarters of people surviving cancer within the next 20 years.
So, let’s take a proper look at the figures …
How 80p in every £1 goes to our important work
The Sun’s figures bear no relation to what we actually spend on fundraising. They merely compare what we actually spent on our charitable work in 2013/14 (£379m, the vast majority of which is scientific research, but also includes things like producing accurate information for the public) to our total income that year (£665m).
They appear to have missed the fact that we also spent an extra £35m as part of our investment in the new Francis Crick Institute.
But in terms of income, the 2013/14 financial year was a bit of an odd year for us – we had an ‘exceptional item’ in our accounts – ‘accountant speak’ for the fact that a large amount of unanticipated money came in.
In this case it was because, as part of the move to the Francis Crick Institute, we sold one of our research institutes. This money will be spent in future years.
Here’s some more detail about why our 2013/14 income seems so much higher than what we spent on beating cancer:
- We plan our income and research expenditure over extended time periods (five years or more) so if money comes in suddenly, we can’t respond instantaneously and spend more in a particular year. This is mainly because the careful, high-quality research we fund takes time to set up and deliver results – a clinical trial might take 10 years – so we need to be able to support research over long periods to reflect that. That’s great, but the flip side is that, since research is a long-term process, it’s generally difficult to spend large amounts in the short term.
- As we said above, in 2013/14 we sold, for proceeds of £76m, the freehold on our London Research Institute more than two years earlier than we expected and for considerably more. We also had a record fundraising year thanks to the generosity of our supporters, including more than £7m from #nomakeupselfie in the last month of the financial year. And while we quickly found, and funded, important new clinical trials, this wasn’t fast enough for it to be reflected in the accounts. You’ll see that appear in our accounts next year.
- Charities have to maintain a certain level of “reserves” to balance the fluctuations in their income and expenditure – our reserves are very closely monitored, but with the exceptional income in 2013/14 these increased sharply. Our reserve levels allow us to plan for long-term research commitments, but would only last for a few months if our fundraising took a considerable down-turn.
- Alongside the increase in our fundraising income and reserves, we launched our new research strategy in 2014 – we plan to carefully increase what we spend significantly over the next two to three years, to boost the impact of our research and policy outreach work. We’ve already doubled what we spend on some of the most urgent areas: lung and pancreatic cancer research, for example.
Another thing to note is that the 80p in the pound figure excludes our shops. This is because we want to be able to show the true effectiveness of people’s financial donations, compared to other charities – and not every charity has a retail chain like we do.
Compared to other forms of fundraising, running shops is a very different type of raising money, based on business principles where customers purchase a product that has a price attached to it. Our costs include stock collection, rents, shop staff and shop maintenance costs. Income from our shops is therefore better compared with similar commercial retail activities, rather than voluntary donations.
Here’s a graphic we prepared for our most recent year’s annual review (2014/15) – the figures are slightly different from The Sun’s, which focused on the previous year:
So, let’s do the maths, using the 2013/14 Charity Commission figures properly.
If you take our income (£665m) subtract the money from the sale of the LRI (£76m) and the income from our shops, this leaves £500m total income.
As you can read in our report and accounts, our fundraising costs were £90m. This leaves £410m to spend on charitable activity and top up our reserves.
So when you divide this by £500m total income, that gives you 82p in £1 spent on our work.
This figure forms part of our fundraising promise and our commitment to being transparent about where our supporters’ money goes: saving lives and beating cancer.
So, we hope that sets the record straight – and thank you for your continued support. You’re the ones helping us to make an impact – the bake sales, the wardrobe clear-outs, quiz nights and hundreds of other activities that you all do for us, every day – they’re the things that will help us to fund life-saving research and beat cancer sooner.
- Ian Kenyon, chief financial officer at Cancer Research UK