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How your donations are spent

IN A NUTSHELL:

If you donate and add Gift Aid to your donation, then your entire donated amount goes towards the cause you selected and all of Muslim Charity’s admin and fundraising costs are covered from the Gift Aid that we will receive.

However, if you do not add Gift Aid then 88% of your donation goes towards the project and 12% goes towards admin and fundraising costs. This is why we strongly recommend donors to tick the ‘Gift Aid’ box when donating!

IN MORE DETAIL:

At Muslim Charity, we believe your donations are an ‘Amanah’ (trust) and are therefore committed to ensuring we deliver your trust with sincerity and professionalism and we are also transparent and accountable in the way we do so.

For every £1 that is donated to Muslim Charity
(Which is not gift aided), it is spent as follows:

88p is spent on charitable programmes and activities enabling us to save and transform the lives of individuals, families and communities in need across the globe.

7p is spent on fundraising costs which allow us to generate further future income so that we can help even more people in need.

5p is spent on administration and operational costs so that we can effectively manage our operations and deliver your ‘Amanah’ (trust) with stringent processes thereby ensuring aid is delivered to genuinely deserving and needy people.

WHY DO WE SPEND 5P ON ADMINISTRATION AND OPERATIONAL COSTS?

We take your donations seriously; charity is not just about handing funds over to beneficiaries. If that were the case, we would be fulfilling the role of a money transfer service. Furthermore, if we did not have systems and processes in place, we could very easily – albeit mistakenly or innocently – give aid to the wrong hands or those not fully deserving.

The 5p spent on administration and operational costs goes towards a comprehensive operational management framework that we have in place to ensure that the aid we provide goes to the most deserving and needy people. This process ensures that:

  • There are proper due diligence and selection criteria involved in the selection of beneficiaries and partner organisations we work with;
  • Procedures and processes are in place for monitoring and evaluations to ensure funds are used for the intended purposes;
  • Assessments and external audits are conducted to ensure the proper utilisation of funds for those most in need;
  • Procedures are in place to ensure there is no money laundering, fraud and theft, through a stringent mechanism of financial controls and risk management procedures.

Implementing all of the above requires funding and this is why we utilise 5p of every £1 donated for this purpose. It also gives us the confidence that our projects and programmes are impactful and give excellent Value for Money (VfM) meaning that every £1 you give goes further in creating a bigger impact on the lives of the world’s most needy and deserving people.

WHY DO WE SPEND 7P ON FUNDRAISING COSTS?

When receiving donations, there are some costs that simply cannot be avoided. For example, if you donate using your credit or debit card then transaction charges are usually between 1% and 3% (for credit cards) and 0.3% to 2% (for debit cards) depending on the type of card used. Similarly, there are fees associated with Direct Debits (between 1% to 2% of the donation amount) depending on the medium used to set up the Direct Debit.

Furthermore, there are costs associated with organising fundraising events, dinners, printing fundraising brochures, material and also running and maintaining a website and online donation platforms. And in addition there are also costs associated with having an effective and efficient fundraising team to create awareness about the lifesaving and life-changing work we do as an organisation and to encourage people to donate towards some of our fantastic causes which leads to more donations so that we can create a bigger impact to the lives of the needy around the world.

These are some of the areas where the fundraising costs go to and we would simply be lying if we were not open and transparent about these. Since your donations are an ‘Amanah’ (trust) it is therefore imperative that we are honest about these costs. Having said that, if you add Gift Aid to your donation then all of these fundraising and administration costs are covered by the Gift Aid that Muslim Charity receives therefore ensuring that your donated amount goes directly to the cause you have chosen.

WHY IS GIFT AID SO IMPORTANT?

Gift Aid is a scheme which enables registered charities like Muslim Charity to reclaim tax on a donation made by a UK taxpayer. Reclaiming tax on your donation will increase it by 25%.

To put it simply:

  • If you donate £100 and you are not a UK taxpayer and therefore do not tick the ‘Gift Aid’ box, Muslim Charity will spend your donation as per the proportions mentioned above i.e. £88 will go towards charitable programmes and activities, £7 on fundraising costs and £5 on administration and operational costs.
  • If you donate £100 and you are a UK taxpayer and therefore tick the ‘Gift Aid’ box, Muslim Charity will receive an additional £25 making your total donation amount of £125. This will then be spent as per the proportions mentioned above i.e. £110 (88%) will go towards charitable programmes and activities, £8.75 (7%) on fundraising costs and £6.25 (5%) on administration and operational costs.

We therefore strongly recommend donors to give their Gift Aid declaration if they are UK taxpayers as this enables us to spend more directly on charitable programmes and activities whereby our other costs are covered entirely through the Gift Aid that Muslim Charity will receive.

Note: The above figures are correct as per our 2018 accounts submitted to the Charity Commission. Muslim Charity encourages its donors to study our annual accounts which are publicly available on the Charity Commission website here.

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