Mistakes and human errors are costing charities £5.97bn a year, a snapshot survey of 50 charity finance experts is suggesting.

According to the survey £776m is being lost to human error, including decimal points being put in the wrong place.

Charities are also missing out on £597m due to billing issues, such as inaccurate and incomplete data.

The financial cost analysis has been calculated based on a proportion of latest official total revenue figures for UK charities.

Almost half of charity revenue leakage “can be traced back to problems with data, presenting an opportunity for charities to close the gaps”, said Scott Logie, chief commercial officer at consultancy Sagacity, which has published the survey.

Poor organisation is also costing charities dearly, claims its survey of charity finance experts, including directors of finance, chief finance officers and chief strategy officers.

Almost nine in ten charities have incorrect payment details for donors, which is among the most “costly causes of leakage”, said Sagacity.

Mistakes in relationships with third party fundraising partners is another significant cause of leakages of money. In two thirds of cases new donor details have missing data.

Sagacity says that most charities (96%) are wasting money by paying fundraising agencies for donors “who only donate once, rather than long-term givers”.

More effective matching with donors to donations could help claim Gift Aid, adds Logie.

He warns that at least £139m more could be claimed through better managing of Gift Aid data.

“Amid the cost-of-living crisis every penny counts. Demand is soaring for charitable services like food banks, care assistance, and mental health support,” said Logie.

“Not fixing the leaky bucket is a wasted opportunity that’s preventing charities from providing more help to those in need.”

He added: “To operate more efficiently and make the most of donations, charities must take a holistic approach. Look across the organisation at all levels to understand where issues might be occurring and how to fix them.

“From onboarding donors to working with partners. Long term, fixing leakage isn’t all about money either.

“It will also enable more accurate targeting, financial reporting and governance, improve the donor experience, and even attract more donors as they see where their valuable donations are spent.”

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