World Vision Canada – A Case Study on Charity Ratios
World Vision Canada answers the question “how is money spent?”. Here World Vision Canada presents an overhead chart of spending, noting it spends 80.5% on programs on a 5-year average.
Donors ask Charity Intelligence “how much of my donation goes to the cause?” Charity Intelligence uses a fundraising cost ratio that shows, for every dollar donated, 72% goes to programs in the most recent year.
The subtle differences in ratios produce different numbers. It depends upon which question donors are asking.
Source: World Vision Canada, Annual Impact Report 2016 #_edn2″ name=”_ednref2 [2]
Source: Charity Intelligence’s reporting on World Vision Canada’s Overhead Costs on Donations3.
“How much of my donation goes to the cause?” is the most common question donors ask Charity Intelligence. Our job is to answer donors’ questions. We believe facts and context helps donors be informed and give intelligently.
Over the last five years, World Vision Canada’s fundraising costs averaged 21.7%. World Vision Canada’s support costs also include administrative costs, which have ranged from 4.8% to 5.9% of total revenues.
Please note: There is a minor difference between the CRA calculation of fundraising costs and Charity Intelligence’s calculation. Using the CRA method, World Vision’s fundraising costs are 22.6%. Charity Intelligence uses the audited financial statements and calculates a lower 22.1% fundraising cost. This is due to World Vision Canada reporting $6.6m in “donations from other registered charities” in F2016. Donations received from family foundations and churches are excluded from the CRA calculation but included in Charity Intelligence’s calculation. #_edn5″ name=”_ednref5 [5] This is not a significant difference.
Charity Intelligence’s calculation of “how much of my donation goes to the cause” has one big caveat – it is based on average fundraising costs and average administrative costs. It is, as the CRA Charities Directorate says, a “global calculation”. Donors need to know that different types of fundraising have different costs; direct mail, runs, gala dinners, and golf tournaments are fundraising types that have higher costs. On-line donations, monthly giving, and mailed-in cheques typically have lower costs. Furthermore, to a degree, fundraising has fixed costs; donors giving $100,000 will likely have significantly lower fundraising costs than a donor giving $100. The exact fundraising costs on a specific donation will vary depending how you give, and how much you give.
Similarly, with administrative costs, Charity Intelligence assumes that a charity’s administrative costs are borne equally by all revenue streams: donations, government grants, fees for service and business profits. In short, no funder gets a “free ride” from paying its fair share of support costs.
By using global averages for a charity, Charity Intelligence’s calculation of how much of a donation goes to the cause is not an exact figure for a specific donation.
Sources:
#_ednref1″ name=”_edn1
- #_ednref2″ name=”_edn2 World Vision Canada, Annual Impact Report 2016 Canada Highlights http://sites.worldvision.ca/annualreport/assets/pdf/WVC_AnnualReport_2016.pdf http://sites.worldvision.ca/annualreport/assets/pdf/WVC_AnnualReport_2016.pdf
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The subtle differences in ratios produce different numbers. It depends upon which question donors are asking.
Source: World Vision Canada, Annual Impact Report 2016 #_edn2″ name=”_ednref2 [2]
“How much of my donation goes to the cause?” is the most common question donors ask Charity Intelligence. Our job is to answer donors’ questions. We believe facts and context helps donors be informed and give intelligently.
Over the last five years, World Vision Canada’s fundraising costs averaged 21.7%. World Vision Canada’s support costs also include administrative costs, which have ranged from 4.8% to 5.9% of total revenues.
Please note: There is a minor difference between the CRA calculation of fundraising costs and Charity Intelligence’s calculation. Using the CRA method, World Vision’s fundraising costs are 22.6%. Charity Intelligence uses the audited financial statements and calculates a lower 22.1% fundraising cost. This is due to World Vision Canada reporting $6.6m in “donations from other registered charities” in F2016. Donations received from family foundations and churches are excluded from the CRA calculation but included in Charity Intelligence’s calculation. #_edn5″ name=”_ednref5 [5] This is not a significant difference.
Charity Intelligence’s calculation of “how much of my donation goes to the cause” has one big caveat – it is based on average fundraising costs and average administrative costs. It is, as the CRA Charities Directorate says, a “global calculation”. Donors need to know that different types of fundraising have different costs; direct mail, runs, gala dinners, and golf tournaments are fundraising types that have higher costs. On-line donations, monthly giving, and mailed-in cheques typically have lower costs. Furthermore, to a degree, fundraising has fixed costs; donors giving $100,000 will likely have significantly lower fundraising costs than a donor giving $100. The exact fundraising costs on a specific donation will vary depending how you give, and how much you give.
Similarly, with administrative costs, Charity Intelligence assumes that a charity’s administrative costs are borne equally by all revenue streams: donations, government grants, fees for service and business profits. In short, no funder gets a “free ride” from paying its fair share of support costs.
By using global averages for a charity, Charity Intelligence’s calculation of how much of a donation goes to the cause is not an exact figure for a specific donation.
Sources:
#_ednref1″ name=”_edn1
- #_ednref2″ name=”_edn2 World Vision Canada, Annual Impact Report 2016 Canada Highlights http://sites.worldvision.ca/annualreport/assets/pdf/WVC_AnnualReport_2016.pdf http://sites.worldvision.ca/annualreport/assets/pdf/WVC_AnnualReport_2016.pdf
- Read More
