3 ms·

Is the tail wagging the dog, though? Seeing so many charities, with lofty, worthwhile goals (at least as indicated by their names...) that spend upwards of thr

by douche 10y ago

Is the tail wagging the dog, though? Seeing so many charities, with lofty, worthwhile goals (at least as indicated by their names...) that spend upwards of three-quarters of their donations on overhead, administration, and fundraising, makes you wonder.

sliverstorm 10y ago
That's really the key that pisses people off I think, nobody will worry much about high six figure executive compensation if the administration overhead is a tiny portion of revenue. Kidney & Urology Foundation of America is a great example: Total Overhead: 91.9% Management & General Expenses: 38.8% Fundraising Expenses: 53.1% CEO Compensation: $132,642 (31.7% of revenue)
dragonwriter 10y ago
> Seeing so many charities, with lofty, worthwhile goals (at least as indicated by their names...) that spend upwards of three-quarters of their donations on overhead, administration, and fundraising, makes you wonder. While some of those extreme cases may be problematic, I think that there is a risk of putting too much weight on administrative cost ratio (with low ratios being "good") as a metric. Its easy to reduce administrative costs by simply not putting effort into making sure that the way funds are spent is effective at achieving the nominal goals of the organization, but I don't think anyone who thinks things through would think that makes a charity "better". You need better metrics to answer questions of charity quality.
- throwaway729 10y ago
  Spending time on hiring, code quality analyses (code reviews, performance reviews, etc), refactoring, developer training are all examples of administrative overhead. Software shops that don't invest in any of these things end up producing crap. Software shops that over-invest in these things end up navel gazing instead of getting shit done. The line between reasonable and unreasonable will shift from context to context and from organization to organization. There's no silver bullet or magic metric. Ditto for charities. Running a survey that costs more than your actual charity work in order to determine if some strategy is working might be a complete waste of resources. But it might also make a lot of sense. E.g., before dumping 10x the initial investment into that strategy, or before convincing 5 other large charitable organizations to double down on the new strategy. But sometimes it's the tail wagging the dog and/or a failure of leadership. It's impossible to tell from dollar amounts alone.
  - dragonwriter 10y ago
    > The line between reasonable and unreasonable will shift from context to context and from organization to organization. There's no silver bullet or magic metric. No universal one that crosses different missions, sure. OTOH, if you can quantify progress in achieving an organization's mission, you can create a mission-specific measure of effectiveness with which dollars are spent. (And if you have competing organizations with similar missions, you can use such a metric to compare them, though obviously that doesn't extend to comparing charities with different missions unless you can also quantify the relative value of the missions.)

by douche 10y ago

sliverstorm 10y ago

That's really the key that pisses people off I think, nobody will worry much about high six figure executive compensation if the administration overhead is a tiny portion of revenue. Kidney & Urology Foundation of America is a great example: Total Overhead: 91.9% Management & General Expenses: 38.8% Fundraising Expenses: 53.1% CEO Compensation: $132,642 (31.7% of revenue)

dragonwriter 10y ago

> Seeing so many charities, with lofty, worthwhile goals (at least as indicated by their names...) that spend upwards of three-quarters of their donations on overhead, administration, and fundraising, makes you wonder. While some of those extreme cases may be problematic, I think that there is a risk of putting too much weight on administrative cost ratio (with low ratios being "good") as a metric. Its easy to reduce administrative costs by simply not putting effort into making sure that the way funds are spent is effective at achieving the nominal goals of the organization, but I don't think anyone who thinks things through would think that makes a charity "better". You need better metrics to answer questions of charity quality.

throwaway729 10y ago
Spending time on hiring, code quality analyses (code reviews, performance reviews, etc), refactoring, developer training are all examples of administrative overhead. Software shops that don't invest in any of these things end up producing crap. Software shops that over-invest in these things end up navel gazing instead of getting shit done. The line between reasonable and unreasonable will shift from context to context and from organization to organization. There's no silver bullet or magic metric. Ditto for charities. Running a survey that costs more than your actual charity work in order to determine if some strategy is working might be a complete waste of resources. But it might also make a lot of sense. E.g., before dumping 10x the initial investment into that strategy, or before convincing 5 other large charitable organizations to double down on the new strategy. But sometimes it's the tail wagging the dog and/or a failure of leadership. It's impossible to tell from dollar amounts alone.
- dragonwriter 10y ago
  > The line between reasonable and unreasonable will shift from context to context and from organization to organization. There's no silver bullet or magic metric. No universal one that crosses different missions, sure. OTOH, if you can quantify progress in achieving an organization's mission, you can create a mission-specific measure of effectiveness with which dollars are spent. (And if you have competing organizations with similar missions, you can use such a metric to compare them, though obviously that doesn't extend to comparing charities with different missions unless you can also quantify the relative value of the missions.)