So this is the second blog post in our #AskACharity series – and it’s a great question! And one that is often asked in a variety of different ways.
How much money get’s spent on admin? Fundraising? Operations? How much of what you raise actually helps the girls?
Our answer to these questions? Every dollar you donate goes towards helping the girls we work with – it’s just that some of it goes more directly to helping the girls than others.
We know that many people get uncomfortable around admin / fundraising and operation costs – and trust me, we get it. You’ve heard stories of charity CEO’s getting paid massive salaries, or money spent on things you might consider a waste. It’s easy to lose trust.
So we figured the best way to overcome this is to talk about it – and let’s unpack some of these dreaded costs that have gotten such a bad reputation!
We’re going to use our costs as an example – So let’s have a look at some of our highest admin / fundraising / operation costs for 2014.
Audit (admin cost) – $6,000
When charities get to a certain size, they are required to have an audit. Because our board believed strongly in transparency and good governance, we’ve been getting audits since we began.
This $6,000 was paid to our auditors Moore Stephens to ensure that all our finances are above board. It helps us be accountable to YOU, our donors.
Sure we could save that $6,000 and invest it into our programs – but that would mean we wouldn’t be eligible for a fundraising license in Western Australia (you must have an audit for that), AND we wouldn’t be able to show you that your money is being spent how it was intended.
This administration cost ensures that we are a trustworthy charity. We need to get our finances audited, otherwise we’re lacking in transparency. To apply for grants, we’re often asked to supply audited accounts.
So how does this admin expense help the girls? We can show our supporters that we’re a credible charity – the more transparent we are, the more money we raise, the more girls we can help. Simple.
Do It In A Dress expenses (fundraising cost) – $21,871
A big fundraising expense for us is Do It In A Dress – this expense cover items like our PR costs (around $9,000 last year), website costs and payment processing costs (bank fees).
We think we’re pretty good at getting a lot of things for free or discounted – so ALL of our expenses include some aspect of pro-bono time or discounted charity rates.
Do It In A Dress raised $400,000 last year. We hustle our butts off to get free things, but we also have to spend money, to make money.
How does this fundraising expense help the girls? By spending this money we could reach more people. We were featured in magazines, newspapers and television. We had 30% more sign ups that we had the year before. We raised more money – this in turn means we can help more girls. See?
Salaries – Permanent Employees (admin & fundraising cost) – $84,430
Salaries typically get allocated to fundraising and administration. One Girl’s permanent employees last year were Dave and I.
We were on salaries of $45k each.
For the first three years at One Girl, I didn’t receive a salary. I sold my house to fund myself so I could pour all my energy into getting it off the ground.
At the end of 2012, when we’d raised $300,000 – I had less than $1000 in my bank account and no job. So we had a decision to make. Do we pay ourselves a very modest wage to help this grow, or do we scale back and shrink.
We chose to grow. In 2014, One Girl had two permanent employees and three part time contractors working to grow the business. And it worked – our income increased by more than 35% in 2014 and we’re on track to give 5,000 women and girls access to education.
How does this cost help the girls? It means people turn up, day after day, to raise money, spread awareness, and deliver programs. A volunteer organisation can only get so far. Unfortunately our personal food and phone bills can’t be paid with warm and fuzzies. I went to Coles once and asked if I could get free food because I worked at a charity. Sadly they said no. (This may be an exaggeration – but you get the point)
Note : Landlords also do not accept rent paid with warm and fuzzies.
Programs – $290,599 (meant to spend $355,000)
These are funds we spent last year directly on our programs. Intitally we’d planned to spend just over $355,000 – but due to the impact of Ebola and school closures, a number of payments were delayed until this year.
These program costs – the ones that are seen to directly ‘help the girls’ cover a variety of costs. Yes there is the raw cost, school fees, books, bags, uniform, construction materials for schools, sanitary pads, etc.
But all these programs need people to deliver them. And monitoring and evaluation to ensure that the programs are actually HAVING the desired impact. So that’s all wrapped up in program costs too.
How does this cost help the girls? Well these are the services they are offered. This is the money that is attributed to ‘directly helping them’ AND to monitoring the difference these programs make.
So can see it how we do now? ALL of the money we raise goes towards helping the girls.
We have a huge vision of supporting the education of 1 million girls by 2020. That means we need to grow our fundraising. We need to invest in bigger programs. We need to make sure we’re transparent and accountable so that people trust that we’re doing what we say we’re going to do.
And considering we started our operations by selling boxes of chocolates, we know how challenging it can be to raise each dollar. That’s why our manifesto says – “We Make Every Dollar Count”
And it’s not just us – we’ve seen so many of you start your own projects, organise events, run #likeagirl and wear school dresses – we know how much time, energy and love goes into it – and we don’t take it lightly.
We are a people powered organisation – rough calculations show that 81% of our money last year came from the community. That’s thousands of people taking actions to help educate girls in one of the poorest countries in the world. It’s pretty amazing.
And we treasure that. Your commitment and generosity. You guys rock.
Thanks Rachel for this great question! If you’ve got anymore – use the #AskACharity hashtag and we’ll do our best to answer it!
PS. If you’re still looking for our pie graph breakdown – over the last few years it works out to be 70% programs / 18% fundraising and 12% admin. This will be updated again this year once our 2014 audit is complete.
But like we said before, admin and fundraising costs aren’t bad. ALL of this money helps the girls. Just some of it more directly than others. 🙂