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Adam Rothwell
- Tuesday, October 30, 2007
THE WOODEN SPOON SOCIETY (see profile) is one of the least transparent and most inefficient charities we’ve seen. And that’s saying something.Last week, we completed our one-thousandth charity profile, and tomorrow we’re celebrating two years’ full-time research into how charities tick.
The vast majority of the 1,000 annual reports we’ve read reflect charities which have a genuine interest in being transparent – and our figures show that about 75 to 80 per cent of cash spent by those same charities goes to the cause.
But some organizations stand out. And Wooden Spoon is one of them.
Although the Spoon’s bosses have been quick to wheel out statistics claiming that, in one statement, 52p, and another statement, 72p out of every pound spent goes to the cause, the charity is strangely reluctant to reveal how it calculates them, and today on its website it appears to have abandoned them entirely.
The facts are simple, and they’re made clear in the Spoon’s accounts , signed off by the charity’s trustees and approved by PwC, one of the world’s biggest audit firms.
| Wooden Spoon spent £4.5m in 2005/6 Of that, £1.6m went to good causes £2.8m went on overheads |
We have no axe to grind. We have nothing personally to gain by criticizing the Spoon. But in our view it is unacceptable that a charity should spend so much on overheads, and so little on helping its intended beneficiaries. Even the Institute of Fundraising, the umbrella body which represents the major charities, agrees with us. We’ve complained to the Charity Commission about the Spoon on these grounds.
The Spoon has also raised some specific points. If you have the stamina for it, this is our response.
- The Spoon writes: “The costs of these events [i.e. fundraisers] may be significant, but must be reported separately from all related income.”
We say: This is a curious way to look at things. Most charities raise money by running events, and they are happy to have those events judged by how much money they rake in being compared against how much they cost. The difference between most charities and the Spoon, however, is that the Spoon generally runs remarkably inefficient fundraising events, and most charities don’t. - The Spoon writes: “If an event fails to deliver on this criteria [sic; i.e. a value-for-money test], then it is not repeated.”
We say: Again, this is a curious statement – because all the Spoon’s fundraising (on aggregate) looks to us to be some of the least efficient of any charity. We suggest the Spoon takes a serious look at how it measures value for money – because we know of no other charity which shares its views on this matter. - The Spoon writes: “Wooden Spoon is conscious of creating events which are accessible to all its supporter base.”
We say: Again, this is a perplexing statement if it’s supposed to justify inefficient fundraising. The vast majority of charities draw their support from a wide range of people – some of whom may not be rich. But most charities are much more efficient than the Spoon. - The Spoon writes: “Spoon has a unique structure. … The [regional committees] organize their own events.”
We say: This sounds like Spoon HQ is trying to shift the blame to its regional committees – which would be fine, were the regions’ activities not all funnelled through the central Spoon bank account. Spoon HQ has a duty under charity law to ensure that all the cash on its books is spent primarily for charitable purposes. But we’re worried that it is shirking that responsibility. - The Spoon writes: “Head Office is extremely judicious in its governance and takes great care in the management of overheads.”
We say: We’ll willingly congratulate the Spoon if it’s able to show that it keeps head-office overheads to a minimum. But that’s of little use if its fundraising activities are drowning in overhead costs. - The Spoon writes: “Spoon is extremely proud of its record with the Charity Commission and as far as Spoon is aware, no investigation by the Charity Commission is planned.”
We say: Last Friday, we lodged a formal complaint with the Commission against the Spoon’s excessive fundraising costs. As the Commission is bound to do, it will investigate our concerns – but we have no indication what it will conclude. Click here to read the full text of our complaint.
For about the third time - IG are still misunderstanding some key points:
1) Fundraising activities DO NOT have to be for the public benefit;
2) Private benefit derived from a charity's trading activities, including fundraising, is not relevant in the public benefit assessment.
Write to the Commission all you like - this angle is going nowhere, as you still haven't taken these points into consideration.
"The last word on the Wooden Spoon" - dated 30th October.... On reflection perhaps a little optimistitic Adam?!
Whilst I disagee to some extent with IG's position on WS, I have to wholeheartedly concur with their view of the Charity Commission. I have raised serious complaints myself about a charity and have found their responses to be irrational and inconsistent. Still, I've not given up. If the charity concerned is finally held accountable then I will make sure that the public understand just how ineffectual their 'regulator' actually is. What a total waste of £30m pa of tax payers money.
Don't shoot the messenger
If you take a look through the archived Charity Commission Inquiry reports you'll see that they do investigate cases where they think fundraising costs have been excessive, but I don't think they've got the same mental model of how charities work that you have. From memory, ALL of the cases that were judged to be excessive involved situations where organisations were either sending begging letters or selling objects with low or nil value (e.g. badges) and using the bulk of takings to pay the people involved in doing the fundraising.
Spoon's much more like a charity shop with overheads (rent, rates, electrics etc.) that go to someone OTHER than the fundraiser.
For what it's worth, the first time I filled in an annual return that required me to comment on fundraising activities that raised less than 50% profit, I listed our charity shops with considerable trepidation and got back a response essentially saying the same as the response re Spoon - i.e. they don't have a problem with honest fundraising that has comparatively limited potential for profits; they only care about situations where charities are being run to enrich the staff rather than the beneficiaries.
Well, fundraiser, it does look like you’ve hit on something there. But on closer examination it turns out that both your response (and that of the Commission) are misguided.
This is why.
The Charity Commission’s letter to us says: ‘The Charity Commission does not have any guidance on the levels of return which would be acceptable for the various methods of fundraising’. This is curious. The Commission’s guidance ‘Complaints about Charities’ (CC47) says that the Commission will investigate complaints about charities which incur ‘fundraising or administration costs which are excessive’. But if what the letter says is true, then how is the Commission able to investigate any complaints made about ‘excessive’ fundraising? It appears not to be equipped to do this – a strange situation indeed.
The letter says, ‘If statistics are going to be used to compare fundraising costs, then they should be compared against similar methods of fundraising.’ But this is surely irrelevant. Whether fundraising costs are deemed ‘excessive’ must be a question of public/private benefit. It’s not a question of whether a fundraising event is competitive ‘in its class’ – since a whole class of fundraising events might be excessively profligate. This may be the case with the type of event organized by the Spoon.
Additionally, charities’ fundraising costs must be judged against other charities complete fundraising costs, not against the amount spent on a particular event. In other words: if we are going to make a comparison, we must compare whole charities against whole charities, not fundraising techniques against fundraising techniques. Few other charities, overall, and which we have examined, have such a poor return on fundraising investment as does the Spoon.
The letter says that, since 105% of available funds are being spent on charitable activities, then this means that the charity must be operating for the public benefit. This is not the case. After fundraising expenses have been subtracted, the charity may look as if it’s delivering a substantial good. But because the fundraising costs are so high, it seems as if the beneficiaries of the fundraising events are the primary beneficiaries of the charity – rather than those in receipt of charitable funds.
Public benefit must be established overall when looking at how the charity functions. And, overall, the Spoon spends more on fundraising (where a benefit accrues to the members of the charity) than it does on charitable activity. Therefore, we think that the public benefit delivered by the charity is outweighed by the private benefit accrued to its members when they attend events.
Now, I’m not a lawyer. Our argument may fall on a legal technicality. But when it comes to the key questions, our position is unchanged – and will, I think, remain so. The Wooden Spoon creates more benefit for its members than it creates for its intended beneficiaries. Its fundraising costs are excessive – and we know that because we can compare it to 1,000 other sets of charity accounts.
The Commission’s letter contains a wealth of faulty argument. And, rest assured, we’ll be writing to them to let them know our views.
Adam, Intelligent Giving
I am pleased that you have published the Charity Commission's reply to your concerns, albeit not on this site but on Facebook!
The Commission's accountants produced a table which is worth looking at as it shows that, quote' the level of funds applied to charitable activity is shown as a percentage of the funds available. This shows that in 2006 105.1% of available income was used on charitable activities, the lowest percentage applied was in 2005 51.9%. These figurwes are in all cases more than double that which you have compiled.'
They go on to say'..if statistics are going to be used to compare fundraising costs then they should be compared against similar methods of fundraising so that an accurate comparison is established. From our analysis of the information available from the accounts for the charity the Commission does not concur with your view that the charity's costs are excessive taking into account the method of fundraising which is employed by the charity.......the table produced show that funds expended on charitable activity as a percentage of available funds range from 105% 2006 to 60% 2005. As such this does not give rise to concern.'
I hope that Intelligent Giving's misinterpretation of accounts, and lack of appreciation of a charity that has already in its short history helped so many disadvantaged children, will not affect the level of giving to Wooden Spoon.
I agree with part of that...... I don't think that the criticism of Wooden Spoon amounts to anything of great import. However, my experiences of the Commission suggests that their staff (at all levels) are far from being the oracle with regards to Charity law and if you keep your eye out you may well see them come in for criticism on that score in the very near future.
Don't shoot the messenger
I don't understand where you are trying to get to on this subject. The sector regulator has written a clear letter explaining the position and saying that there is no case to answer. This charity is not breaking charity law - they are using legitimate (if slightly unusual) fundraising methods. The Commission has a lot of experience in this area - I don't understand how IG can set itself up to know more than the Charity Commission about charity law. The Commission is right to point out the relative efficiency of use of the 'net incoming resources available for charitable application'.
You might not like the way that this charity works. That is hardly an objective criterion for assessing the good that the charity does, or how efficient it is.
If you sincerely believe that charities should not be allowed to raise funds in certain ways, or trade (even using subsidiary companies?) then surely campaigning for a change in law, rather than attacking one exponent of relatively unusual fundraising techniques would make more sense.
IG's other original point about this charity was that the report wasn't particularly good at highlighting outcomes, which seems fair enough. Martin Brookes's recent lecture on the subject of measuring charities impacts is relevant in this context. It would be nice to see IG campaigning for positive change in a constructive way - much more likely to end in a positive outcome for the sector generally.
Sadly, tabloid style hatchet jobs on individual charities generate much more publicity.
In reply to Martin Davies.
The local regions are fairly autonomous, but you msake a good point asking why there is a Head Office. The reason is becuase eveythuing that is raised regionally is matched by Head Office. Therefore the £100,000 raised in our region means that £200,000 is actually available to spend.
The problem is that Head Office events tend to be very glitzy, corporate, high value events in order to raise the money to match the regions. I understand that many of these events have actually been loss making.
This, I think, is the main reason why on the face of it Spoon looks inefficinet. In reality, on a regional basis it is very efficient becuase there are no overheads and everyone attending a local event knows that there funds WILL be spenct locally.
Finally, and quite importantly Spoon events tend to be very good fun and are always over subscribed wth waitinhg lists for our Dinners. I do not think that particiapnts/ donaters will be worried about the recent report quite simply becuase we can guarantee that any m oney they give us will be spent on projects. 99% will probably never get involved in any of the Head Office organised events.
We've finally got permission to publish the Charity Commission's response to our complaint about the Wooden Spoon. You can see what they said by logging onto our Facebook group.
We think the Commission's argument is wrong for several reasons, but don't have the time to issue a full rebuttal of their points just yet. But we will. Eventually.
(If you don't have a Facebook profile, then do please get in touch and we'll email you a scanned version of the letter.)
Adam, Intelligent Giving
In my experience letters from the Charity Comission are always perplexing and never deal fully with your concerns.....As the train of correspondence builds you'll probably also find self contradiction and perversity feature heavily.
Don't shoot the messenger
Alex raises a good point here, and we'd very much like to publish the full text of the Charity Commission's letter to us about the Wooden Spoon. However, before we do this we need to clarify whether we have the right to reproduce the letter in is entirety - since we don't own the copyright to it.
It's worth saying, however, that we think the central thrust of the letter's argument is perplexing and doesn't deal fully with our concerns.
Adam, Intelligent Giving
In the bigger picture of charity 'crimes' this one really is chicken feed. Whether or not you approve of WS's methods of fundraising the fact remains that their accounts are completely transparent enabling any potential donor to make an properly infromed decison.
Don't shoot the messenger
This discussion can go on forever.Adam Rothwell formally reported Spoon to the Charity Commissioners and saw fit to make his letter public.I hope that he will also publish their reply.
Its not the money thats the problem. Its the inefficiency, percieved or real, in getting it.
Is it a charity? Or a business?
It certainly seems to have a lot of staff for a grant-maker.
Maybe everyone is making the mistake of presuming that the organisation is inefficient when it might be down to a few regions running events at a loss.
OK, a regional committe raises in excess of £100k every year. Which is used to fund projects in that county. Exactly what need is there for head office (with its 9 staff?) to be involved? If all the regions work like that, how is the total organisation seen as inefficient?
The fundraising looks inefficient with the figures given. So can WS explain how perceptions are wrong?
I am on a regional (county) committee of Spoon that raises in excess of £100,000 every year.
EVERY penny of that amount raised is used to fund projects in the county that support disadvantaged and disabled children.
Perhaps you would prefer I didn't bother with my unpaid work on the committee and let those running the projects try to obtain their funding from local government?
Surely a lot of the point of this is that there's a big difference between competing for the cash that people feel able to give away and for money which they're exchanging for something else they value (in this case rugby dinners) with a profit margin that goes to the charity. Spoon genuinely does seem to be generating new money (it appears to be tapping corporate expense accounts) rather than pursuing the finite pool of donations. I would be prepared to be very cross with an organisation that was taking donations away from other children's charities and wasting them, but there doesn't seem to be any evidence that this is what's happening.
I've organised a few meals in the past.
Its common to negotiate a cheap price with the food supplier (caterer or restaurant) and charge good price for the tickets.
So will cover the full costs to the charity and get some money in - just from the meal, never mind the additional bits.
Can't recall any charity meal I've been to (and go to several a year) where we just get charged the meal fee without some of the price going to charity.
I suppose in the end it all comes down to what level of charity money each region wants to include in the ticket price.
And looks like they have a lot of staff to pay for out of the money. Wonder how much work is done by the local groups and how much by the head office.
Alex - no idea what difference background would make. Accept the posts as given.
Charity chris makes an erroneous assumption here: "People who pay money in return for the right to attend an event know what they are getting in return, and they also know that the profits will be distributed to beneficiaries." I have been to a Wooden Spoon event and I assumed was that part of my ticket price would go to charity. But it transpires that *none* of it went to charity but went to the event organisers. I think I should have been told.
Wooden Spoon does waste money on overrated pay scales and unnecessary staff! A small charity does not need a Chief Executive and a deputy Chief Executive. Annual membership subscriptions have gone up 100% for some in two years and that is to pay for staff that are not required. The volunteers do not cost Spoon it is higher archy!! The outgoing CEO was earning in excess of 80K a year this should be capped!!!! Imagine what they are paying out for TWO!!!
Alex - I suspect a lot of the Spoon's supporters might feel the way you do. That said, I wouldn't try to claim that having worked in a charity gave me more right to criticise than someone who didn't, even if it might help me to understand the more technical legal and accounting issues.
There is a genuine public interest in what charities do and the public have a right to comment, and its up to charities to make sure they get the message about what they do across clearly to help to avoid this kind of criticism.
Wooden Spoon's accounts show they have funded some big projects - as one example, £120k on community rugby projects. There must be a good news story for them to tell in the annual report in detail about what these projects do, and what the community benefits are. Their supporters know about their work - hopefully they'll take the opportunity to sing it from the rooftops.
Charity Chris you are wasting your time posting facts and figures.People like Richard R and particularly Adam Rothwell are just not interested in facts.For the record though I am a retired Director of a Public Company with 40 years business experience in the IT world.I have always been charity minded and also a keen rugby player(in my early days) and Club administrator.It was logical therfore to get involved with Spoon.During the last 12 months my Spoon Region has raised over £50 K for good causes through events as well as donations.Me and my colleauges have not had a penny in either fees or expenses nor have we benefitted in any way from freebie lunches dinners or booze.We pay for these as if we were corporate attendees.
I personally take great exception to Adam Rothwell,s bigoted and negative view of Spoon.Can I please ask what qualifies him either by way of training and/or experience of business and /or charities to set himself up as a charity expert.
Also wouldnt it be fairer if those participating in this blog would state their own backgrounds as Chris has done.At least this would give their opinions either positve or negative some credence.
Richard R - the tax exemptions are available to trading subsidiaries of charities as well. In general, they generate a much lower return, (eg charity shops around 20% on average).
In simple terms, trading subsidiaries will usually benefit from the same tax breaks as their parent charity if they are set up correctly. A 20% return is clearly far higher than most forms of investment, eg the building society example already used. Why is this worth doing?
It's worth doing because if a charity invests £100k in a trading company, this should generate funds year on year on year on year that the charity can then spend on its charitable activities. Of course, it could also spend the £100k straight away and abandon hope of generating funds from external sources in this way in the future. Generally the former will be seen as being of more long-term benefit to the charity's beneficiaries.
In the case of WS - indeed, it could shut down its trading operation (this is what the events are -THEY ARE NOT DONATIONS) tomorrow - as a loss to the charitable sector of around £2m per year that is distributed to beneficiaries.
I'm going to say this again and again - this charity is not spending donors money on jollies. People who pay money in return for the right to attend an event know what they are getting in return, and they also know that the profits will be distributed to beneficiaries.
"its not unreasonable to take advantage of the VAT and tax exemptions directly through the charity". Actually I think it *is* unreasonable. IN LIGHT OF THE POOR RETURN (for the last five years, not just last year) these costs should not be subsidised by the taxpayer. This is a rugby social club pretending to be a charity and getting the rest of us to subsidise it.
At the risk of getting tedious - its also important in this particular case to be clear that there is a distinction between donations that are given freely and payments made to a charity in exchange for services.
A simple example is between a donation to a charity of £1 and the purchase from a charity of Christmas cards of £1. We might expect a much larger proportion of the donated £1 to go directly towards beneficaries than in the case of the purchased Christmas card, where we understand that there is a cost of producing the card itself. However, we expect a large proportion of the profit element on the Christmas card purchase to go to the beneficiaries.
If you're looking at fundraising that contains much larger elements of 'trading' as opposed to direct solicitation of donations, costs are inevitably higher. It is the net return on trading that should be of concern. As RSPCA Cambridge notes, if you could get a better return from a building society then the trading wouldn't be worth carrying out.
It's pretty clear from WS's accounts that all of its 'trading' profits are applied for charitable purposes, and that a large proportion go to beneficiary projects. As RSPCA Cambridge notes, a trading subsidiary might help to clarify this, but unless WS's events carry major trading risks its not unreasonable to take advantage of the VAT and tax exemptions directly through the charity.
Once again - using ratios on this charity is comparing chalk with cheese.
There are some other general points I would like to add to this debate, and also questions that I think IG could perhaps think about more generally.
- Having worked in the sector for quite a number of years, it frustrates me intensely that a group with such laudable aims as IG is going about its business with such a confrontational attitude.
IG behaves as though it is judge and jury. Alleging law breaking is pretty serious. What happened to innocent until proven guilty? - It is an entirely reasonable aim to want to hold charities that appear to have excessively high fundraising costs to account. However, personally, I feel that if you're going to claim to be impartial (as in the 'for charities' section of the IG website) that to illustrate a point by launching what could appear to the outside world as a vendetta against one charity isn't really consistent with your stated claims.
Might it not, instead, be more reasonable to spend more time on research, and compile a list of charities that you feel to have a high fundraising cost ratio, then bother to ask them why, before going public? You could do lasting damage to a charity's reputation that might well not be deserved. - Again, touching on the stated impartiality aim: the language that is used in the blog both here and more generally tends towards both bias and the emotive. Once more, this is not really consistent with the impartiality aim. For example, today it is stated "it simply beggars belief to suggest that a charity should be allowed to spend 65 per cent of its expenditure on overheads without criticism". Once again you misunderstand the difference between an overhead and the cost of raising the funds.
However, I don't debate that a charity with such a ratio may well expect questions to be asked. Ideally, they will explain the situation in their narrative reporting and accounts. But is it not reasonable to actually ask for an explanation before hitting out with criticism? - How does one go about judging how effective any one charity's fundraising efforts are? A question that has vexed fundraisers for years. CC20 talks about charities and fundraising. It says: "Effective charitable work depends on securing adequate resources. In many cases, this depends on effective fundraising".
The guidance goes on to note the importance of ensuring that fundraising is effective, and noting the effect of fundraising on public confidence in the charity.
How then, does one judge the effectiveness of any one charity's fundraising activities, given that different causes have different levels of natural support?
CC20 tries to give us an idea. "We strongly recommend that trustees agree, in advance, the likely proportion of the gross receipts which will be spent on the costs of fundraising. Actual performance needs to be monitored against that target, and the trustees should satisfy themselves that the expenditure is justified".
Where it doesn't help is by not giving any indication of the proportions that might be considered reasonable. How can it? Charities are all different, and work in many different fields. The decision is one of subjectivity that charities and their trustees have to try and make in an objective way.
Perhaps we could refer to a case study. How about a charity that IG considers to be clear and transparent in its reporting. I happen to agree with IG's assessment of Cancer Research UK - I think that it provides clear, high quality information both in its narrative reports and in its financial reporting. IG give it a score of 94% and say 'this giant tops our list in both clarity and transparency'.
If you delve into the notes to the accounts, CRUK's most recent figures show that its fundraising activities have the following 'profit' margins:
Legacy generation - 94.5%
Donor marketing - 66.1%
National events - 62.5%
Community fundraising - 42.1%
Major gifts / corporate - 60.2%
Shop donations - 100.0%
E-business - 23.5%Hang on a second - we've agreed that this is a model charity - but its e-business is less efficient at raising funds than Wooden Spoon! Write a blog article now! I can see the headlines - 'Cancer charity wastes donors' money on online failures'. The same might be said to apply to the community fundraising, which costs nearly 58p for every £1 raised.
I can't speak for CRUK, but if I was to make an educated guess they might say that 1) these areas have raised many millions net to be applied for charitable purposes, and the costs reflect the differing ways that donations are raised, and 2) they generate invaluable publicity that helps to generate donations in other ways - perhaps people who then walk into a shop and make a donation, or remember the charity in their will. So - these areas may actually be much more effective than the bare figures suggest. Do we try to measure such intangibles in our SORP reporting?
Tim Ball's comments illustrate the role that charities of this very, very specific type potentially have to play. WS can lever into the sector funds that would otherwise be lost. My analogy might be an oil field. A lot of the oil can be sucked out at relatively low cost, but the last remnants take much more effort to extract. The same can be said to apply to donations - the last slice takes more effort and more cost to pull into the sector.
Can you explain to those that have benefitted from WS's charitable spending why that isn't worth doing?
I think IG have opened a valuable debate about the rules on charities and fundraising, but that you're being a bit hard on WS. If (as I believe they probably ought) they'd set themselves as a charity (allocating the grants) and a trading company owned by the charity and covenanting all its profits to the fund we wouldn't be having this argument. The trading company would still get tax breaks and it would be legitimate for the charity to let the company use its offices and staff provided it charged the company for this.
The Charity Commission seem to be happy to treat this kind of arrangement as a type of investment that's essentially not very different from putting funds in a building society. There's then no expectation that the company will succeed in making at least 50% profit, which I think would be a wildly ambitious markup for any trader.
This isn't a situation where there's a pre-existing pot of money and the administrator is being paid more than the beneficiaries.
Thanks for that, Charity Chris - you're right to suggest that this debate is becoming a little esoteric. Just to get back to basics again:
- Charities must operate to benefit needy people. That's the law.
- The Spoon spends most of its cash on overheads - i.e. benefiting its supporters and staff.
- We don't think that's right. This also might mean the Spoon is operating in breach of the law.
Adam, Intelligent Giving
As a regular user of Wooden Spoon's events, Adam Rothwell's comments are very disappointing and partly seem to reflact an inability to understand accounts. As has already been said, the costs of an event are "Costs of sale" and are not overheads. I think he also needs to bear in mind that a lot of individuals and businesses that are taking places or tables at Wooden Spoon events, are wanting opportunities to entertain clients who are interested in rugby. The Wooden Spoon events are very well organised and good value for money, and have the added benefit of the profit going to that charity. I can take clients to many other events organised by a raft of other companies, where the profit is simply going to private profit making concerns, but I would rather it went to a charity such as The Wooden Spoon. I can not justify, however, and neither can many other medium sized and small businesses, spending ridiculous amounts of money at tables at these sorts of events simply because it is being organised by a charity. Wooden Spoon are operating in a competitive world and the events have to be good value for money. My firm already gives a large amount to other charities, usually through donations, and consequently we recognise that that is the most efficient way of donating to certain charitable causes. Here. I am spending efficiently on a business expense, which happens to benefit a charity. Maybe Wooden Spoon could try to raise more through donations, but Andy Rothwell's distorted criticisms of the fund achieved through events to date, will only serve to damage the charity and reduce the amount raised for good causes. If Wooden Spoon doesn't organise these functions anymore, I am not going to spend the money I formerly did with them, on another charity. It will simply be lost to the not for profit sector.
Adam - it could indeed become a lengthy debate though as a charity accountant I would never find it turgid! I'm happy to clarify what I mean though.
Perhaps I should have been clearer, in that there is a distinction between what is legally charitable expenditure and what is not. You are entirely correct to note that there is a distinction between 'charitable activities' - effectively, those activities that directly benefit beneficiaries of the charity, and governance / support costs etc.
My point is that governance and support costs still fall within the definition of 'charitable expenditure' as it is recognised that such costs are legitimate costs of a charity.
We're veering away from the SORP into the realms of more detailed charity law here, but SORP paras 172 to 174 have a bit more on the distinction between 'fundraising expenditure' and 'charitable expenditure'.
To reiterate: governance (and support) costs fall under the overall definition of charitable expenditure though they may not be in themselves charitable activities.
I hope that makes more sense.
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