One in five charities spend less than half of their donations on good causes, a new report by the True and Fair Foundation has revealed.
The study found that 1,020 charities with a combined income of £6bn reported spending less than 50 per cent on their charitable activities.
A further 292 charities - with a combined income of £2.4bn - spent less than 10 per cent of its income on charitable spending.
The report by the transparency charity looked at over 5,000 charities with more than £500,000 in their latest accounts filed to the Charity Commission.
Engineering research charity Lloyd’s Register Foundation - which was set up in 2012 - came bottom of the list.
The study found that it spent just one per cent of its average income the past three years on its charitable endeavours.
According to the commission's data - released on the government’s website - the rest of these charities' money is typically spent on saving for the future as well as fundraising, campaigning, operating costs and “governance”.
Gina Miller, Founder of the True and Fair Foundation, told the Telegraph: “It is an utter disgrace that so much of the money people generously give is going to feed large charity machines, which are often characterised by obscene overheads and salaries, aggressive fundraising, and bloated marketing and publicity departments; resulting in questionable levels of charitable spending.”
She called for a minimum annual dispersal rate of 65 per cent for charities to be discussed.
But in a blog post, the director of public policy for the National Council for Voluntary Organisations, Karl Wilding, said the report was misleading and a minimum spend requirement could reduce the amount of money charities had to spend.
He explained that many charities had to run large operational costs in order to bring in revenue: “To meet Ms Miller’s ‘65%’ demands, Sue Ryder could shut down its charity shops.
“It would be spending less on trading, so its ratio would look ‘better’ in her eyes. But it would have millions of pounds less to spend on the people it helps.”
The Independent has contacted Lloyd’s Register Foundation for comment.
