It is disappointing that no organization has readily come forward in reply to my original question with their pre-calculated "program:fundraising:administrative cost ratios" (I love this way of conceiving of the ratio) it would be really handy to be discussing a real case at this moment. I will have a bit more time in a couple of weeks, at which point I will happily dig into the standards you have linked to, and then pull these out of an example past report, if I can find a good set of numbers in one of the large chapters (WMDE, WMUK?) or even the WMF, so that we can discuss the meaningfulness of starting to make this ratio a top level indicator for all our movement organizations.

If you want, we can try with Wikimedia Polska. Here there is a rough table:

http://pl.wikimedia.org/wiki/U%C5%BCytkownik:Polimerek/Spraw_zarzadu#Finanse

just showing our ratio of operational costs and other parts of our costs for 2012.

In our case the operational costs are well defined by general rules of accounting, but they differ from your definition - i.e. it does not cover all salaries if they are integral part of the projects, but does cover salaries of our secretary and accountant. But for example it also covers cost of our toolsever and internet domains...

IMHO the general reporting could be like this: *General operational/office costs (salaries of office workers, cost of maintaining office, cost of legal stuff, cost of travels and meetings of workers and members of the boards and other "decisive bodies") *Technical infrastructure costs (servers etc. + salaries of technicians who maintain it ) *Costs of projects and special programs (overall, salaries, meetings, travel, technical, others) - maybe spread by a type of program (ie. producing content, software improvement, outreach, promotion, others)

+

*General info about overall costs of all salaries (easy to calculate and define). *General info about costs of all travel reimbursements (easy to calculate as well) *General info about costs of all meetings and conferences.

2013/4/25 Fae faewik@gmail.com:

fundraising = administering grants and fund applications (I can see your grant, other income and membership dues, but not the cost of managing these; it may be better to estimate them and deduct them from "administration" rather than leaving this as zero)

Actually it is hidden in general operational costs, but rather hard to precise calculation as it is made mainly by volunteers. The landing page and banners are made for free by Leinad in cooperation with a compay. Our landing page is on our toolserver so the cost of hosting it is also close to 0 as the amount of resources it needs is negligible.. There is some work needed by accountant to calculate donations but it is already covered in her salary. Let assume it is 5% of her work-time each year. Then our secretary sends a snail-mail letters to our donors each year - the cost of it was 1100 PLN + 2 days of work of her. It might be altogether around 3000 PLN (700 EUR).

I am unsure where Promotion (Promocja) fits in, this may need to be broken down a little more if it splits between the 3 categories above. Does this mean that you could now calculate a provisional 'fundraising : program : administration' ratio?

This is cost of printing leaflets and producing gadgets + costs of maintaing our boots during several festivals and external conferences. Roughly it might be added to the outreach programs.

On 25 April 2013 14:07, Chris Keating chriskeatingwiki@gmail.com wrote:

Rather than focusing on understanding our costs in detail, I would like to understand our benefits in detail.

Sure, it would be great to have a top level performance indicator for this. Measuring programmes in terms of hard benefit to the beneficiaries, using measures agreed in the project brief, would be a pragmatic start.

The idea of an "acceptable" fundraising costs ratio is, to be honest, a bit of a red herring. In general for a mature organisation it is easy to reduce the fundraising costs ratio, by raising less money (fundraising opportunities tend to exhibit diminishing marginal returns). I am a donor fundraising manager for a British university (and before that a charity and a political party). In any of those jobs I could have recommend terminating all of my projects and sacking my entire team, and doing that would reduce the ratio of fundraising costs. It would not be in the best long-term interests of the organisations or their beneficiaries. In practice, growing long-term income tends to involve investment.

Maybe. Though as a donor, I doubt I would be happy if more than 50% of my donation was spent on "fundraising" unless there were extremely good reasons given. To me, this would be an clear indicator that the mission of the charity was to build an organization of staff or high value capital items. Our shared mission clearly is not of this nature, which makes us distinct from, say, hospitals or housing trusts.

Any charity which cannot answer the question, "how much of my donation will be spent on administration and taxes?" is one that remains severely exposed to reputational risk if this is later exposed as so high as to be unexplainable.

"Administrative overhead", too, while perhaps useful to know, may not be not useful if it's a target to be clamped down on. See for instance this piece of research, which shows that charities with the minimum "administrative costs" are actually less effective at delivering their missions:

http://www.freakonomics.com/2011/06/09/why-ranking-charities-by-administrati...

So I am relatively relaxed that we are not great at measuring programme vs administrative expenditure.

Yes, I was happy that Frank presented the ideas of how programmes might be evaluated at the top level as a way of supporting the FDC. However based on a chat I had with him the following day, his presentation was quite clearly not intended to replace the need for all programmes to have plans to evaluate their own impact rather than leaving it to an external team. This remains within the responsibility of all chapters and thorgs to self-govern.

I am not at all relaxed, however, that we as a movement are not great at measuring the impact of our organisations. I found Frank's session at the Wikimedia Conference really helpful, and I think the FDC framework can really help with this as well. But please let's focus on defining the impact of what we're doing before we worry about what's overhead and what's not.

I find it an odd rationale that there must be a "choice" between clearly reporting how much of our charitable funds are spent on internal administration in proportion to delivering the outcomes that donors are actually giving for, and measuring the impact that the outcomes have. I suggest we should push for both to be delivered. In the meantime, there is little excuse in not spending an hour or two with a calculator and the financial report of any chapter with published accounts, to produce some simple ratios as a Key Performance Indicator that we can benchmark from year to year.

Rather than finding reasons to avoid making progress on simple reporting using measures easy to hand, perhaps we can just get on with collecting these and then discuss what they mean, and not insist on first delivering massive effectiveness assessment programmes, that may never produce hard figures, but are likely to be limited to subjective statements and soft surveys of beneficiaries?

As WMUK is subject to SORP (Statement of Recommended Practice, Accounting and Reporting by Charities), the chapter is required to publish a "summary of any measures or indicators used by the charity to assess its achievements". So as well as the simplistic ratio we are discussing here, WMUK could provide the movement with an excellent case study for other chapters on how to address these regulatory requirements for top level performance indicators focused on achieving the charitable mission.

Thanks, Fae -- faewik@gmail.com http://j.mp/faewm Guide to email tags: http://j.mp/mfae