More than a year's reserves deemed excessive, survey shows
Keeping more than a year’s reserves in the bank is deemed excessive by the British public, a new charity survey has found.
Research by nfpSynergy found just one in 17 people think charities should save more than a year’s expenditure while a third favour reserves of less than six months’ spending.
The poll of 1,000 people, out today (Tuesday), asked how much money charities should keep in case their income fell and just 6% said over a year’s worth of expenditure.
One in five people felt 4-6 months was wisest, while another fifth preferred their charities to keep back six months to a year.
Some 12% were happy to leave it to whatever the charity felt was right, while 19% were happy with less than three months and 21% were unsure.
People were also asked how much a charity with an annual income of £12 million should keep in reserves to see if their answers differed when talking in money rather than months.
The public want to think that the donations they make are being used to do good not sitting and gathering dust
The results showed even more enthusiasm for smaller reserves, with no one saying £24m was the right amount of reserves and just 2% opting for the full year’s income of £12m.
Nearly half were comfortable with £3m or less, while 12% picked £6m or £9m. Many were again reluctant to pick a figure, with 16% keen to leave it to the charity and 22% saying they didn’t know.
Just 5% of people would choose 1-2 years, while 1% would say more than 2 years
nfpSynergy’s Joe Saxton, said: “It’s interesting to see that hardly anyone feels charities should keep back at least a year’s expenditure in reserves.
“The public want to think that the donations they make are being used to do good, not sitting and gathering dust.
“People are even keener on low levels of reserves if the actual amounts of money are discussed rather than the length of time. Just under 20% of the public says three months or less is the right amount, but nearly 50% say £3 million or less when asked about a £12 million charity.
“The moral of this is to always talk about the length of time reserves might last, rather than specific amounts of money.”