What a “100% donation policy” really means

The promise

A charity with a 100% donation policy promises that every penny of your gift goes to the cause you chose, not to its running costs. It is a reassuring promise, especially for zakat, and many honest charities make it. The useful question is what pays for everything else.

Where the running costs come from

Staff, offices, banking, transport and monitoring all cost money. A charity making this promise usually pays for them in one of these ways:

• A separate fund given specifically for running costs by trustees, businesses or supporters.
• Gift Aid claimed on gifts, which some charities put towards running costs; ask whether they do.
• Income from investments or trading, such as a charity shop or rented property.
• A share of general, unrestricted gifts, given without a project named.

Any of these can be honest. What matters is that the charity tells you which it uses.

Restricted gifts

When you give for a stated purpose, such as a named appeal, that money becomes a restricted fund in charity law and must be spent on that purpose. The accounts show restricted and unrestricted funds separately, which is one way to see that a charity treats named gifts as named.

How to check the claim

Look at the charity’s accounts on the Charity Commission register. If it says all donations go to projects, its fundraising and support costs still have to be paid; the notes should show where that money came from. If you can’t tell, ask the charity directly: “Who pays your running costs, and is Gift Aid on my gift included in the 100%?”

Not the only sign of a good charity

A charity without a 100% policy is not a worse charity. Some prefer to be open that a small share of each gift pays for monitoring and safeguarding, because that is what makes the work reliable. Judge a charity on its honesty, its reports and its results, not on one number. When you give, give for Allah alone and don’t spoil it with reminders (Quran 2:264).