On Wed, Apr 10, 2013 at 10:09 AM, Ingrid Srinath <ingrid.srin...@gmail.com> wrote: > Deepak, > > Here are a couple of devil's advocate scenarios: > > Charity J: Spends virtually nothing on donor acquisition, brand building, > policy advocacy, professional staff, technology or monitoring and evaluation. > Deploys virtually the entirety of the small sums they collect to feed > starving children. Saves their lives but does nothing to expand the number of > lives they can save or to prevent more children from being reduced to > starvation. > > Charity Q: Spends about 50% of their revenues on expanding their donor base, > auditing programmes to improve effectiveness/efficiency, building knowledge > on causes of and remedies to poverty. Consequently, reaches greater numbers > of children with greater effectiveness each year, changes policies that cause > poverty or prevent its reduction, develops programme innovations that are > widely replicated by other charities and governments. > > Which would you choose to support? Would it be the latter subject to say, a > 30% cap on 'overheads'?
But that's what I call the problem with overheads per se. You have to get more detailed. I have seen brochures from large NGOs and annual reports printed on very expensive paper. I've seen NGO seniors travel "J" class on flights, billed to the NGO (non international, in the late 90s). One of the "building knowledge" pieces involved a sojourn to Goa for a large number of people in Fort Aguada or some such resort. This is not great ways to spend money; you might actually reach more people this way, but it is at a substantially higher cost, and it might be more efficient forme to find 10s of Charity J's to spend on. I would say that Charity Q is doing a disservice by not substantially optimizing costs to stay under 20%/30% ranges, or plan to do so in the near term. I would like to see more efficient spending by them, instead of just attempting to make the programs they sponsor more effective. I mean that if you have 10 people in Fort Aguada for a week at 10K per person per night, to make a program that costs Rs. 50 lakh more efficient by 10%, you might as well ditch the Aguada trip and give them the Rs. 6 lakh extra. > By the way, one simple way to help a charity lower its fundraising costs is > to pledge long-term support. Agreed. Thats why Payroll giving works so well (in the west at least). There's also a theory that instead of doign the spray and pray you should find one cause and give enough to do it justice. Like building one school, funding one old age home etc.
