Most of you probably make some kind of charitable donation in a year, maybe online, maybe as a response to a direct mail appeal or sometimes at the request of a friend who supports that cause. And probably, as with other services you use, you don't really stop and think "How much is this costing me? Wait a minute...costing?? I thought I was making a donation so what's this COST all about!?"
What donors don't realise is that many NGOs (non-profits), including GiveIndia, are intermediaries. We connect people who want to donate, to NGOs and projects that need support.
GiveIndia incurs expenses in our efforts to raise money for NGOs and projects in need, and so does every other fundraising intermediary. Costs for people, for technology, for office space; costs just like any other business, though on a much more frugal level.
Now that you've digested this fact, can you guess what the average cost of fundraising as a percentage is? Basically, how many Rupees does an organisation spend to get a Rs.100 donation?
It is our hope that each one of you reading this, takes a guess by voting on the poll. Do also leave your comments on the blog so that we have an interesting dialogue on this important topic. After all the comments are in, GiveIndia will post a follow-up giving you the inside story on fundraising costs.
So go ahead and take a guess now.
where is the poll to vote for giveindia? how do i vote?
Visit blog.giveindia.org to cast your vote
My guess is 10 - 20 %.
I'm glad you mentioned this aspect, as every time I donate something to a charity, I always wonder how much of the amount goes towards the running of the organization and how much goes to the cause I support.
And here's another thought that just occurred to me: if you're an 'intermediary' between donors and another NGO, would it mean that the administrative cost is, so to speak, "deducted" twice, one by yourselves and one by the NGO? Just curious to know; I don't mean to be cheeky, but it's just a thought off the top of my head that occurred to me and I wrote it down :)!
I've been going through your blog and site and greatly appreciate the work that you're doing.
Looking forward to your post.
Mummyjaan -- that's a good question and we're always happy when donors ASK because that is what will force NGOs to be more transparent.
We're not going to go into specific numbers here because the poll voting is still on but in our follow up post we will.
NGOs expenses are usually broken up into three components, the fundraising cost, cost of general admin and cost of project admin.
Let me illustrate my answer with an example:
NGO A runs two projects -- an orphanage and a vocational training center. Their project admin costs are the actual costs of running the orphanage and the vocational training center. In addition they will have general admin costs and the additional cost of what they spend on raising funds.
So, if you donate to NGO A through GiveIndia, the NGO does not spend the fundraising cost, but does spend on general admin and project admin.
The good thing is that GIveIndia brings VALUE to the whole equation by having done due diligence on these projects, by giving donors a convenient way to transact and by assuring donors they will know how their money is used.
Hope this makes sense but in case you have any follow up questions, fire away :-)