Monday, October 27, 2008

Why we should focus on impact of our work, not cost

Impact, not cost. Sounds like a really clear distinction. And it is.

But you would be amazed how many charities get caught up in explaining to donors/members of the public how much projects cost and justifying their existence by explaining the breakdown of their programs.

I read with interest this article on Professional Fundraising's site this week, entitled Donors overestimate fundraising and admin spend.

In a new study by leading UK think tank nfpSynery, it was found that British donors grossly overestimate the amount UK charities spend on administration.

To be honest I am not surprised.

One of the scenarios we have 'mystery shopped' charities on over the past 3 years is how they respond to a complaint. Specifically, a complaint focused on the amount the organization is perceived to spend on admin.

What we found was staggering, namely:

- In Australia, only 77% of the charities we approached were able to 'resolve' the complaint in our eyes, meaning that they satisfactorily explained to us a breakdown of where the $ go.

- In Canada this figure was 62%, in New Zealand it was 83% and in Hong Kong a worryingly low 29%.

So what does this mean?

What we experienced was that most frontline workers we spoke to struggled to have the information to hand and clearly explain how the charity spends our money.

But more concerning was that rather than focus on where they were having an impact with my donations, they seemed more intent telling me about the % breakdown.

One great encounter we had was with Orbis in Hong Kong. Following a brilliant phone call where the staff member put us to ease and then turned us around by talking through the many and varied ways our gift was 'making a difference' we were then emailed a flyer - which I have shown above - which very simply articulates the enormous difference Orbis' individual donors have had on restoring the eyesight of those most in need.

Simple, but effective. What's plain to see here is that Orbis has treated over 1m patients and performed 87,500 surgeries. And whilst there is a pie chart devoted to the breakdown on expenditure, the main focus is on impact, not cost.

I only wish more organizations took such an approach. If they did then maybe punters on the street might have a clearer understanding on where charities are spending their hard earned.


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