The Centre on Philanthropy has defended the Island’s charities, saying that overheads are both costly and inevitable.

The centre’s Executive Director Elaine Butterfield hit back after The Royal Gazette revealed that one struggling charity, the Centre Against Abuse, spent most of its $413,000 budget last year on salaries and administrative costs. It has now been forced to shut down a safe house it ran for the victims of domestic violence.

Yesterday Ms Butterfield said that charities carried out essential work in the community and strived to keep costs down.

“In order to hire skilled professionals to offer the best possible services — even at a non-profit salary scale which is lower than the private sector — and run the operations of the service is costly,” Ms Butterfield said.

“However it is also true that many of us are being paid below our skill-set by choice, because the work that we do is very rewarding and we have a desire to do it.

“Everyone is not willing or able to sacrifice for a non-profit salary and the immense stress of caring for others that is a natural part of the career.

“This idea that overheads are something that only for-profit organisations experience is very unrealistic and greatly challenges the effectiveness of non-profit organisations, in some cases even more so.

“So the next time you’re looking at a charity, don’t ask about the rate of their overhead before you ask about the scale of need for their services, how they measure their progress, and what resources they need to make them effective regardless of what the overhead is. Consider how important the overhead is if some of our problems are actually getting solved?”

Ms Butterfield said that charities faced a catalogue of challenges in an increasingly depressed economic climate.

“We are expected to conduct our operations according to best practice standards — and many do — while accepting less compensation than the for-profit sector,” she said

“We are expected to raise funds while spending as little as possible on advertising and marketing or not to advertise unless the funds are donated. Although we are expected to conduct our operations ‘like a business’ we are frowned upon for overhead costs.

“If we put on too many fundraisers and come up with innovative ideas, we are seen as operating outside of our scope. We are expected to respond to the growing need created in our community by socio-economic trends, and increasingly be the first to be cut from donor budgets.”

She pointed out that the Island’s 400 charities generate $70 million in revenue and employ about 900 people.

“The revenues generated in the form of grants, fees for services, etc are directly reinvested in the community via programmes, salaries and facilities,” Ms Butterfield said.

“If we can see the benefit to all of us in this thinking, then the non-profit sector can play a massive role in changing our community for all of our citizens most desperately in need of it to change.

“There can be no doubt that Bermuda faces unprecedented challenges, across all sectors of the community. There can also be no doubt that the non-profit sector has an important role to play — by working together with stakeholders including the Government, the private sector and the community, we can get far more accomplished and be more effective at it.

“I question what would happen if non-profits were not available to assist the Government with its social agenda and our community with our increasing need for human services support.

“Perhaps this is what is referred to as outside-the-box thinking but consider for a moment the impact of a non-profit sector that is equipped to actually make a difference and the effect and change that it would make in our community.

The current mindset is to reward non-profits for what they spend, or how little they spend, rather than what they have accomplished in the lives of their clients and ultimately the community.

“If we can work together as stakeholders along with the non-profit sector then we are talking about the potential for real change. But it will never happen by forcing these organisations to lower their horizons to the demoralising objective of keeping their overhead low.”