The conclusion is that low admin costs do not signal that a charity is good. ‘Admin’ includes systems for capturing learning, for improving, for reducing costs. It’s spending on those things which enables good performance. Scrimping on them is often a false economy.
Assessing a charity by its admin spend is like assessing a teacher on how much chalk they use, or assessing a doctor on how many drugs they prescribe: they’re easy measures but don’t relate to performance. As Einstein said: ‘Not everything that counts can be counted. Not everything that can be counted counts.’
This isn’t to say that there isn’t waste in charities. There is: masses, much of it avoidable, and good charities try to avoid it.