[Wikimedia-l] Fwd: Question: How much does administration in Chapters cost the Wikimedia movement?

[Fae]

On 25 April 2013 14:07, Chris Keating <chriskeatingwiki at 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-administrative-expenses-is-a-bad-idea/
>
> 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 at gmail.com http://j.mp/faewm
Guide to email tags: http://j.mp/mfae