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Current Events/ Pop Culture
Administrative Fee
Jul 5th
What is the administrative fee at your organization? Would you be considered highly efficient with an admin fee of 6% or is your operation a little bit more costly at 15%? The administrative fee concept has always bothered me. The cost of doing business is not the same across the nonprofit sector, nor in every state or region. The administrative fee does not seem to answer the root questions supporters ask and yet it is often one of the first questions. I know our local United Way received an endowment solely to lower the cost of their administrative fee. While this may make the organization look good on paper, if the fund exists only to lower administrative fees and not to hire more staff or build a more sustainable program, then what value did that money really serve?
Your organization can have a low administrative fee and be inefficient with no connection to your mission. The reverse can be true as well. You can be a high performing nonprofit with a more expensive cost of doing business but make a lasting impact in your community. There are so many variables with different organizations included in factoring this fee. Do you only include program staff that work directly with client care or do you include the front desk person and support staff individuals?
The value in comparing administrative fee is that is provides some accountability for nonprofit organizations. Efficiency and good stewardship of donations is important in nonprofits today. Every organization should have an understanding of what it costs to fundraise and do the work that they do. But, we need some other indicators beyond administrative expenses. I’d love to see a statistic on how well a nonprofit is doing regarding mission fulfillment or how financially solid an organization is, as in, are they struggling to keep their doors open or will they be around for a while?
What are your thoughts on administrative fee? What does your organization do and what is your administrative fee?
Related posts:
- Holden Karnofsky Interview
- Gaining Fundraising Support
- Talking About Taxes
- More Than Fund Development
- Ending the Problem
Administrative Fee
Jul 5th
What is the administrative fee at your organization? Would you be considered highly efficient with an admin fee of 6% or is your operation a little bit more costly at 15%? The administrative fee concept has always bothered me. The cost of doing business is not the same across the nonprofit sector, nor in every state or region. The administrative fee does not seem to answer the root questions supporters ask and yet it is often one of the first questions. I know our local United Way received an endowment solely to lower the cost of their administrative fee. While this may make the organization look good on paper, if the fund exists only to lower administrative fees and not to hire more staff or build a more sustainable program, then what value did that money really serve?
Your organization can have a low administrative fee and be inefficient with no connection to your mission. The reverse can be true as well. You can be a high performing nonprofit with a more expensive cost of doing business but make a lasting impact in your community. There are so many variables with different organizations included in factoring this fee. Do you only include program staff that work directly with client care or do you include the front desk person and support staff individuals?
The value in comparing administrative fee is that is provides some accountability for nonprofit organizations. Efficiency and good stewardship of donations is important in nonprofits today. Every organization should have an understanding of what it costs to fundraise and do the work that they do. But, we need some other indicators beyond administrative expenses. I’d love to see a statistic on how well a nonprofit is doing regarding mission fulfillment or how financially solid an organization is, as in, are they struggling to keep their doors open or will they be around for a while?
What are your thoughts on administrative fee? What does your organization do and what is your administrative fee?
Related posts:
- Ending the Problem
- Gaining Fundraising Support
- More Than Fund Development
- Ratios Versus Results
- Staying Motivated
To Be or Not To Be- Donor Loyalty
Jun 23rd
Is donor loyalty changing? It would appear to me that older generations were more consistent about their giving. An organization could count on a monthly gift from their regular supporters and these individuals would give for years and years. Is that different today? Younger generations seem to respond more to a one-time appeal than give to an organization for several years. I think of Haiti as a perfect example. It is great to see how much people are giving to Haiti, but they are mainly one-time gifts. Almost all of the individuals who are giving to Haiti will not continue an ongoing investment in rebuilding and changing the lives of people in Haiti. They are giving in response to an appeal, to a horrible disaster that happened.
When I look at Haiti as an example of the new kind of donor loyalty I’m not sure if I should be encouraged or discouraged. On the one hand it seems that people today are more aware of what is happening in the world and want to help to make a difference. However, sometimes it appears that people give according to the biggest giving fad. Whether it’s Save Darfur, the (RED) Campaign, LIVESTRONG, or many other names, donations seem to go in phases to these groups. How should we respond to this developing trend? Does the decline in donor loyalty impact they way that we thank one-time annual fund donors? Should we invest less in cultivating repeat donor gifts? It sometimes feels like every campaign appeal I send out is written to sound more and more urgent. Does there come a time when we will need to differentiate between urgent needs and operational needs?
I’d love to hear back from you as to whether you have observed this as a trend or if it is just me. Is your organization experiencing a decline in donor loyalty? Do you have a hard time holding onto your monthly or regular donors?
Related posts:
- Donor Flavors
- What Motivates Giving?
- Keeping Info in Your Donor Database
- Donor Prospecting- What is the Point?
- Growing your Existing Donor Base
Loving the Luxuries
May 26th
Peter Singer encourages us in his book, The Life You Can Save
But to me, the larger concern is in our own perspective on our luxuries. These luxuries many times fuel the progress of mankind and advance a great deal of social good. Art is a perfect example. To me much of art is exhaustively financially overpriced. But it represents how much we as a culture can value beauty, ingenuity, and creativity.
There has to be a balance between minimalism and extravagance that allows our donors, and the everyday American, to feel okay about having money. Fundraising exists because many Americans have disposable income. I don’t agree with Peter Singer when he talks about giving up a cup of coffee to help someone in need. We will always view our gift from the perspective of what we gave up to give it. Most giving comes after we’ve paid our bills and set our budgets. What if it came before? What if we included charitable giving when we sat down at the table to figure out what we could spend this month? Instead of giving up coffee, what if we took a real look at what we wanted to accomplish and gave to bring about that outcome? People will respond more positively and generously when they have an opportunity to understand what their giving can mean.
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