Our Hypothesis
Charities, whether faith-based or community-focused, sometimes lack transparency and have poor corporate governance. Therefore, there must be a way of improving the level of governance.
Our Research
Census 2011 figures show there are 816,633 Hindus in Britain, compared to 2,706,066 Muslims and 263,346 Jews (a similar number to the Buddhist population). There are at least 30,000 registered faith-based charities, which count for just under 20% of all registered charities, with a combined income of £8.2bn and 140,000 trustees.
The report which looked at this found that the annual voluntary income for faith-based charities on a per capita basis was £30 per Hindu, but £78 per Muslim, and £788 per Jewish person.
In other words, Hindus give far less to Hinduism-based charities than Muslims and Jews do to their faith charities.
But there is a perception of lack of transparency...
There is a perception that some organisations in Britain display a lack of transparency in how they spend donation monies and trading income. It is often not possible to find audited annual reports on the websites of temples, for example, and governance trails such as election nominations and results, as well as what monies are spent on.
Well-intentioned donations can accidentally reward bad charities and punish good ones. This is why it is important to provide donors with the tools and resources they need to ensure their donations match their good intentions. This will drive optimal donor decisions.
...which is at least in part due to a lack of quality assurance process
Most donate at places of worship at major festivals in good faith, assuming their donations will be put to good use. While this may be true, it is difficult to verify because of a lack of quality assurance available as to the use of these funds.
The establishment of a quality assurance process would not only provide donors with more comfort around the use of their monies, but would increase the efficiency of spending at the charities and drive up governance standards.
What work others have done on this
New Philanthropy Capital (NPC), one of the largest charity advisory firms in the UK, discovered that 20% of mainstream donors and 34% of high income donors would increase their overall giving if charities did a better job in the areas they care about: explaining how donations are used and providing evidence of impact.
The research shows that if charities communicate more effectively, they will build more rewarding relationships with donors. Work from the Asian Foundation for Philanthropy recently highlighted that the most likely deterrent to giving was a suspected lack of transparency.