Question

Does anyone have info/research on the ratio between the costs of admin and service delivery for charities? What is good practice, what is the reality, how is it calculated...

Comments

Hugh's picture

Hi Derek, The Wheel published

Hi Derek,

The Wheel published a national survey on pay and benefits in Community, Voluntary and Charitable organisations in 2008 which you can link to here

There is some information on costs and ratios in this report from 2into3 last year although this report is fundraising costs and ratios specific so maybe not entirely suitable to your needs.

For more general information and research I like the Non-profit overheads Costs Project from the States. Ok, I know it is US based but there are some guides and principles that are applicable and the info is pretty accessible and easy to read and follow. I particularly like their 5. The Pros and Cons of Financial Efficiency Standards and their Lessons for Boards from the Nonprofit Overhead Cost Project has got some pearls of wisdom in there too.

Of course there is plenty more out there internationally although you should also get in touch with the centre for effective services over on Harcourt street (address here)  as they would be able to direct you to more standards and best practice.

Hope this helps,

Hugh

Anthony Lindsay's picture

Well there's a nice concise

Well there's a nice concise article on the topic by Ask Direct here.

http://www.askdirect.ie/2006/05/04/administration-costs-myth-and-reality/

 

The first thing to note is that there is no single source of data for this question. One way you can discover the answer for yourself is to visit charity websites and see which of them has an online Annual Report, in which the ratio of admin-to-project cost will most likely be listed.
 
However, it is also worth pointing out that this question does not necessarily have a black and white answer. For example, it is often an unpopular - but actual - fact that some forms of fundraising activities cost more to stage than others. Thus this can very quickly eat into the admin costs of an organisation. However, when the income of that organisation subsequently rises due to those expensive fundraising activities, the obvious success of the fundraising efforts is often the last area of activity to be credited in the public mind. So, it is not always cut and dry.