Charity Amalgamation Is Welcome Development

[Opinion column written by Minister Wayne Scott] The news that the Women’s Resource Centre [WRC] and Centre Against Abuse [CAA] have combined efforts and resources to provide services to the public is a welcome development. I congratulate them on their decision to merge.

Bermuda has more than 400 charities serving every sector of society, some have very similar mandates and there is duplication of effort. By charities combining their missions wherever possible, the community will be better served.

Government has for many years provided funding to many charities, with some coming to rely on that funding to support the bulk of their annual operating expenses.

Because of severe annual operating deficits, Government has had to cut grants to several charities. This has prompted charities to seek funding elsewhere and to realize efficiencies that can make it possible for them to continue their work. Merging operations, as done by the WRC and CAA, is clearly one viable option.

Clearly, the challenge today is that we have too many charities competing for a shrinking pot of funding and resources from both the public and private sector.

Government is therefore encouraging charities that offer similar services to combine their resources. As I said last September, the time has come for charities to work together more closely so that the vital services they provide people are less likely to be put at risk.

Charities are required to commit time and money to produce financial statements, pay their business costs such as rental of office space and, of course, engage in fundraising. The more that is spent on these fixed costs, the less is available to carry out the mandate of the charity. By combining resources – both people and funding – charities can be more efficient in fulfilling their mission.

Groups such as Charity Watch in the US rank charities based on two main criteria:

• ‘Programme %’, which measures the percent of total expenses a charity spends on programmes in a year. Charity Watch considers a charity to be efficient when the ‘Programme %’ is 75% or higher – that is 75% of expenses are spent on charitable programmes with the remaining 25% spent on overheads.
• The second measure is ‘Cost to Raise $100’. A charity is deemed efficient when it spends $25 or less to raise $100.

Bermuda’s charities would do well to strive to achieve the above ratios, enabling them to demonstrate to donors that their funds are being spent on their intended purpose, be it social, economic or environmental.

The people of Bermuda deserve no less.

For more information and to access the new forms and policies concerning charities, visit registrygeneral.gov.bm.

- R. Wayne Scott

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