FEW institutions in the modern world enjoy more trust than charities—a trust given both by rich people who give them money and by the wider public that may benefit from their work. A recent survey by American Express shows that 70% of Americans trust non-profit outfits more than government or business to “address some of the most pressing issues of our time”. A survey by Merrill Lynch of rich people found that over 94% trusted non-profit organisations (business won a 68% rating and government a paltry 32%). . . .

What is less clear is how far the do-gooders’ status is deserved and how far their efficiency can be measured. For a start, the public tends to underestimate the extent to which charities in many countries (including Britain and America) accept taxpayers’ money, provide services to governments and are staffed by professionals not volunteers.

Warm sentiments towards charities may be based on a wider misunderstanding of what they do and how much they cost. As a result the trust may be fragile, says Martin Brookes, who runs New Philanthropy Capital (NPC), a British non-profit that researches charities’ effectiveness. The minimal research effort applied to the way charities or NGOs are run and how well they do contrasts sharply with the minute scrutiny applied to the work of business and government. Even charities that are scrupulously open in their book-keeping and procedures may not analyse their activities rigorously.

Ouch!