Direct speech: Is it moral to equate the costs of the non-profit sector with the costs of the commercial sector?
A mature donor cannot help but understand the value of the "product" (that is, the work of a charitable NGO) that he supports. And he doesn’t mind when part of his money goes to administrative expenses. But we do not have many mature donors yet, and beginners do not always know how the charity fund is organized. So we decided to find out whether to look at the effectiveness of NGOs, or the share of donations that she spends on their needs?
Olga Rudneva, director of the Elena Pinchuk Foundation:The effectiveness of NGOs cannot be measured not by how much money is spent on charity, not by how much money is spent on the maintenance of the organization. Large sums are just large sums. The results of the work must be measured by the number of lives saved, behavior change, improved access to treatment and diagnosis, improved services, implemented technologies and positive customer feedback. Working in the charity sector, although it is a charitable sector, also involves pay. When we talk about recruitment and training, the non-profit sector has the same principles as the business sector. We strive to hire the most experienced, best and most efficient. Non-profit organizations often receive pro bono services from large companies and involve volunteers in their projects. But this does not preclude the need to hire staff at all levels. The more we can pay our specialists, the higher their quality, the lower the turnover of staff, the more efficient will be the use of donations and borrowed funds.
The ratio of charity to operating budget is a very reasonable way to answer the question "a lot or a little is spent on maintenance." The larger the charity budget, the more people, the more space occupied, the higher the cost of supporting the office. It seems to me that the officially introduced ceiling of 20% of the charity budget for the maintenance of the organization is quite an adequate criterion. If the organization does not exceed - there is nothing to worry about. For me personally, it is not the one who spends less who is effective, but the one who spends more efficiently.
Vlasta Shovkovska, head of the charity fund "You are not alone" 1 + 1 media:Charity is an important part of civil society and an important segment of the social life of every country, but I want to emphasize a mature civil society, whose representatives are clearly aware of their own responsibility for the future of this society and are consciously willing to take responsibility.
Charitable Foundations are just a kind of indicator of maturity and responsibility of society. At the same time - to determine their effectiveness by the amount of funds raised, and most importantly spent - the wrong way. For us, the main thing is not how much we received, but what and how we did, and the cost of the project itself may not be very large. Although, in my opinion, the employees of the Foundation should be rewarded for their work. This can be clearly seen in the activities of our foundation. Our uniqueness lies in the fact that "You are not alone" is the first media charitable foundation in our country, and the second - we are a fundraising fund. There has never been such a combination in Ukraine. Therefore, it makes no sense to measure the efficiency of our work by the amount of money spent. Each of our implemented projects is not aimed at specific help to people - and the more people get it,
Our efficiency is the number of projects we have been able to implement, the funds we receive for their implementation, the volunteers who want to work with us. Our goal is, in addition to helping, to change the consciousness of society, to make it responsible, that only in this way, each of us lays his stone on the road to the future.
Oleksandr Maksymchuk, President of the Association of Philanthropists of Ukraine:Charity work is the same work as any other. Before answering, I would like to point out that a distinction should be made between volunteering and philanthropy. As practice has shown, volunteer movements are enough for a year and a half, because, figuratively speaking, you need to eat something. Many people treat charity as a hobby, but in fact it is a very serious activity. This is work with funds that philanthropists do not want to entrust to amateurs and people who do not know how to do it. I advocate for professional charity. Legislation stipulates that charitable organizations can direct up to 20% of revenues to administrative costs - rent, salaries, etc. After all, in this case should work professionals who need to be paid decently - at least not less than the average salary in the market. And this is normal.
Katya Zhuk, Director ofCharity Tuner »:The effectiveness of NGOs and the share of donations that NGOs spend on their needs are different indicators. Moreover, in a civilized society, the efficiency of NGOs is always a cause for pride and competition within the Third Sector. Nowhere does anyone compare the amount that came to the fund during the year, and the final% spent on administrative costs. It is the efficiency of activity that is important. And here, in addition to the moral aspect, the figures may be the same as in the commercial sector: you can hire 5 people, conditionally, 100 UAH, and you can hire one and the most effective and experienced for 400 UAH. And this difference, in the case of NGOs, to give directly to charity. In addition, it is necessary to look at the systematic work and the desire of the fund to involve the state in solving problems. This is also an indicator of efficiency - to use their knowledge in the relevant field for the fund, to draw conclusions, make a plan, draw public attention to the issue, and not just ask for help. They look at how the amount of donations to the fund has increased, the number of recipients (recipients of assistance), from year to year. It’s all about efficiency.
Kateryna Soboleva-Zorkina, NGO communications expert: The quality of a product is proportional to the cost of its production. The cost of a quality product is higher, but the profit from it is greater than from a similar product made of lower quality. In this sense, the costs of business and NGOs can be equated: high-quality and "expensive" prepared, well-promoted campaign is more attractive and ultimately more effective. The most effective charities understand this and will not skimp on spending, especially on marketing / PR, event management.
Let philanthropists be "professional pickpockets" who beg forever, ask to do something for free or at a huge discount, sacrifice quality for fear of taking 20 percent. After all, if a business product solves the problem of the seller and the buyer, then the product of the NGO - the seller, the buyer and the community. The NGO product is at a higher social level. And the greater the cost of its production, the larger it is, the more global the problem it solves. In this sense, it is incorrect to equalize expenditures: NGO expenditures should be much higher. But this requires a much higher level of public consciousness.
Alexander Ravchev, PR Manager of the Citizens in Action Project:Non-profit organizations should not save on costs just because they are non-profit. For a long time, we considered nonprofits to be something like fanatical missionaries who gave up good careers in a civilized country and went to preach in poor countries in Africa and Asia, or saw them as entertainment for young people. However, the civilized world quickly realized that nonprofits are powerful agents of change that solve significant social problems. Changing attitudes towards the role of public and charitable organizations have also changed the approaches to their activities and funding. If you want to overcome the HIV epidemic, poverty or a bad environmental situation, you need professional staff who are at the business level. If you want these staff to work effectively - they need normal working conditions (premises, equipment, etc.).
Polina Nyukhina, Director of the Ukrainian Forum of Philanthropists:In my opinion, it is not the moral side of the issue that should be discussed, but the purpose of such a comparison. Who has the right to know about costs and why? In business, money is earned. And philanthropists do not (hopes for social entrepreneurship as an instrument of financial sustainability have not yet paid off). Therefore, donors’ questions about the costs of beneficiaries have a very clear basis. As, for example, the requirements of the legislator to limit the administrative costs of the charity by 20 percent. The other 80 should focus on core activities. After all, in fact, the purpose of the activity is the basis for obtaining the status of non-profit. While businesses can use the tool of "trade secret" and report costs only to a regulatory group. Paying taxes honestly, of course.
The existence, as such, of administrative costs in a charitable organization is very clear: a professional approach requires resources (including material). Irrational use of donor funds (in the case of deliberate overstatement of costs, for example) leads to subsequent denials of funding and loss of reputation. Fraudulent actions with donor funds, for example, are generally criminally punishable.
It seems that in order to avoid possible misunderstandings with the expenses of philanthropists to support themselves, it is necessary to agree on common and understandable standards of activity for all.
Read also: Direct speech: Do you compile a World Charity Rating, what questions would you ask?
Olga Rudneva, director of the Elena Pinchuk Foundation:The effectiveness of NGOs cannot be measured not by how much money is spent on charity, not by how much money is spent on the maintenance of the organization. Large sums are just large sums. The results of the work must be measured by the number of lives saved, behavior change, improved access to treatment and diagnosis, improved services, implemented technologies and positive customer feedback. Working in the charity sector, although it is a charitable sector, also involves pay. When we talk about recruitment and training, the non-profit sector has the same principles as the business sector. We strive to hire the most experienced, best and most efficient. Non-profit organizations often receive pro bono services from large companies and involve volunteers in their projects. But this does not preclude the need to hire staff at all levels. The more we can pay our specialists, the higher their quality, the lower the turnover of staff, the more efficient will be the use of donations and borrowed funds.The ratio of charity to operating budget is a very reasonable way to answer the question "a lot or a little is spent on maintenance." The larger the charity budget, the more people, the more space occupied, the higher the cost of supporting the office. It seems to me that the officially introduced ceiling of 20% of the charity budget for the maintenance of the organization is quite an adequate criterion. If the organization does not exceed - there is nothing to worry about. For me personally, it is not the one who spends less who is effective, but the one who spends more efficiently.
Vlasta Shovkovska, head of the charity fund "You are not alone" 1 + 1 media:Charity is an important part of civil society and an important segment of the social life of every country, but I want to emphasize a mature civil society, whose representatives are clearly aware of their own responsibility for the future of this society and are consciously willing to take responsibility.Charitable Foundations are just a kind of indicator of maturity and responsibility of society. At the same time - to determine their effectiveness by the amount of funds raised, and most importantly spent - the wrong way. For us, the main thing is not how much we received, but what and how we did, and the cost of the project itself may not be very large. Although, in my opinion, the employees of the Foundation should be rewarded for their work. This can be clearly seen in the activities of our foundation. Our uniqueness lies in the fact that "You are not alone" is the first media charitable foundation in our country, and the second - we are a fundraising fund. There has never been such a combination in Ukraine. Therefore, it makes no sense to measure the efficiency of our work by the amount of money spent. Each of our implemented projects is not aimed at specific help to people - and the more people get it,
Our efficiency is the number of projects we have been able to implement, the funds we receive for their implementation, the volunteers who want to work with us. Our goal is, in addition to helping, to change the consciousness of society, to make it responsible, that only in this way, each of us lays his stone on the road to the future.
Oleksandr Maksymchuk, President of the Association of Philanthropists of Ukraine:Charity work is the same work as any other. Before answering, I would like to point out that a distinction should be made between volunteering and philanthropy. As practice has shown, volunteer movements are enough for a year and a half, because, figuratively speaking, you need to eat something. Many people treat charity as a hobby, but in fact it is a very serious activity. This is work with funds that philanthropists do not want to entrust to amateurs and people who do not know how to do it. I advocate for professional charity. Legislation stipulates that charitable organizations can direct up to 20% of revenues to administrative costs - rent, salaries, etc. After all, in this case should work professionals who need to be paid decently - at least not less than the average salary in the market. And this is normal. Katya Zhuk, Director ofCharity Tuner »:The effectiveness of NGOs and the share of donations that NGOs spend on their needs are different indicators. Moreover, in a civilized society, the efficiency of NGOs is always a cause for pride and competition within the Third Sector. Nowhere does anyone compare the amount that came to the fund during the year, and the final% spent on administrative costs. It is the efficiency of activity that is important. And here, in addition to the moral aspect, the figures may be the same as in the commercial sector: you can hire 5 people, conditionally, 100 UAH, and you can hire one and the most effective and experienced for 400 UAH. And this difference, in the case of NGOs, to give directly to charity. In addition, it is necessary to look at the systematic work and the desire of the fund to involve the state in solving problems. This is also an indicator of efficiency - to use their knowledge in the relevant field for the fund, to draw conclusions, make a plan, draw public attention to the issue, and not just ask for help. They look at how the amount of donations to the fund has increased, the number of recipients (recipients of assistance), from year to year. It’s all about efficiency.Kateryna Soboleva-Zorkina, NGO communications expert: The quality of a product is proportional to the cost of its production. The cost of a quality product is higher, but the profit from it is greater than from a similar product made of lower quality. In this sense, the costs of business and NGOs can be equated: high-quality and "expensive" prepared, well-promoted campaign is more attractive and ultimately more effective. The most effective charities understand this and will not skimp on spending, especially on marketing / PR, event management.Let philanthropists be "professional pickpockets" who beg forever, ask to do something for free or at a huge discount, sacrifice quality for fear of taking 20 percent. After all, if a business product solves the problem of the seller and the buyer, then the product of the NGO - the seller, the buyer and the community. The NGO product is at a higher social level. And the greater the cost of its production, the larger it is, the more global the problem it solves. In this sense, it is incorrect to equalize expenditures: NGO expenditures should be much higher. But this requires a much higher level of public consciousness.
Alexander Ravchev, PR Manager of the Citizens in Action Project:Non-profit organizations should not save on costs just because they are non-profit. For a long time, we considered nonprofits to be something like fanatical missionaries who gave up good careers in a civilized country and went to preach in poor countries in Africa and Asia, or saw them as entertainment for young people. However, the civilized world quickly realized that nonprofits are powerful agents of change that solve significant social problems. Changing attitudes towards the role of public and charitable organizations have also changed the approaches to their activities and funding. If you want to overcome the HIV epidemic, poverty or a bad environmental situation, you need professional staff who are at the business level. If you want these staff to work effectively - they need normal working conditions (premises, equipment, etc.).Polina Nyukhina, Director of the Ukrainian Forum of Philanthropists:In my opinion, it is not the moral side of the issue that should be discussed, but the purpose of such a comparison. Who has the right to know about costs and why? In business, money is earned. And philanthropists do not (hopes for social entrepreneurship as an instrument of financial sustainability have not yet paid off). Therefore, donors’ questions about the costs of beneficiaries have a very clear basis. As, for example, the requirements of the legislator to limit the administrative costs of the charity by 20 percent. The other 80 should focus on core activities. After all, in fact, the purpose of the activity is the basis for obtaining the status of non-profit. While businesses can use the tool of "trade secret" and report costs only to a regulatory group. Paying taxes honestly, of course.The existence, as such, of administrative costs in a charitable organization is very clear: a professional approach requires resources (including material). Irrational use of donor funds (in the case of deliberate overstatement of costs, for example) leads to subsequent denials of funding and loss of reputation. Fraudulent actions with donor funds, for example, are generally criminally punishable.
It seems that in order to avoid possible misunderstandings with the expenses of philanthropists to support themselves, it is necessary to agree on common and understandable standards of activity for all.
Read also: Direct speech: Do you compile a World Charity Rating, what questions would you ask?