We were deeply concerned to see reports of a flawed and misleading analysis of charity spending from the ‘True and Fair Foundation’ reported in the media over the weekend. The NCVO has responded to the inaccurate claims made in the story, and we have also sent letters to a number of media outlets. You can read the response that we sent to the Daily Telegraph below.

“We were disappointed to read your article in today’s paper about the percentage of charitable income spent on good works.  The report is a flawed and simplistic analysis of a number of charities’ annual accounts and indeed a large number of the comments in the article reflect this.

We made several attempts to explain these flaws to the journalist, as did several other charities and the NCVO.  So we were surprised to see the report represented as fact in today’s Telegraph when it is, in fact, utterly misleading.

Cancer Research UK is committed to providing accounts and financial information that is, in the words of Charities Minister Rob Wilson, “as transparent and accountable as possible – so people can make an informed decision about where their money goes”.  CRUK received the award for excellence in reporting in PriceWaterhouseCoopers 2015 Building Public Trust awards – recognition of our commitment to maintain our trusted status with the public.

The report from the True and Fair Foundation does not properly represent the reality of Cancer Research UK’s underlying operating model.  Specifically there are three points that it fails to acknowledge.

Firstly, CRUK has for a number of years been investing in the Francis Crick Institute – a brand new research institute in the heart of London which will help to transform medical research in the UK.  Our total capital investment will be £160m with £41m incurred in 2015.  This investment has not been included in the £423m of charitable activity quoted despite being clearly explained in our accounts.  On its own this would have increased our ratio in the table you quote to 73 per cent.

Secondly, CRUK includes in its annual accounts a clear explanation that shows that for every £1 donated 80p is available to beat cancer.  As with many charities CRUK runs a large retail chain (over 500 stores) that incur significant fixed costs in terms of rent and rates.  These stores allow loyal volunteers to support us with their time and allow the public to support us by donating items that they no longer wish to keep.  We generate over £20m contribution from these stores but, because the economics of these stores are very different to voluntary fundraising, where supporters give us their money, we exclude this income from the calculation of our efficiency.

Thirdly, CRUK as the largest funder of cancer research in the UK seeks to fund research activity that spans many years.  Clinical trials and basic underlying research take time – a clinical trial might take over 10 years to complete.  It is important that the scientists we support have the confidence to know that their research can be funded over the long term.  Following a number of years of successful fundraising CRUK is in a position to increase its annual expenditure which, at £464m, is 34 per cent higher than it was 4 years ago.  Again this is not reflected in the True and Fair Foundation report.

Significant progress towards beating cancer has been made over the last 40 years with survival more than doubling.  Cancer Research UK has been instrumental in much of the progress made and we are grateful to all our supporters for their generosity.  Charities like CRUK, which receive no government money, play a vital role in funding life-saving research and misleading stories such as the one published today risk undermining the trust that we work hard to sustain in all we do.”