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by lmm 211 days ago
> An (effective) charity needs an accountant. It needs an HR team. It needs people to clean the office, order printer toner, and organise meetings.

Define "needs". Some overheads are part of the costs of delivering the effective part, sure. But a lot of them are costs of fundraising, or entirely unnecessary costs.
2 comments
edent 211 days ago
> costs of fundraising

How does a charity spend money unless people give it money?

They need to fund raise. There's only so far you can get with volunteers shaking tins on streets.

If a TV adverts costs £X but raises 2X, is that a sensible cost?

Here's a random UK charity which spent £15m on fund raising.

https://register-of-charities.charitycommission.gov.uk/en/ch...

That allowed them to raise 3X the amount they spent. Tell me if you think that was unnecessary?

Sure, buying the CEO a jet should start ringing alarm bells, but most charities have costs. If you want a charity to be well managed, it needs to pay for staff, audits, training, etc.

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lmm 211 days ago
> If a TV adverts costs £X but raises 2X, is that a sensible cost?

Maybe, but quite possibly not, because that 2X didn't magically appear, it came out of other people's pockets, and you've got to properly account for that as a negative impact you're having.

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throw4847285 211 days ago
That's what an organization like Charity Navigator is for. Like a BBB for charities. I'm sure their methodology is flawed in some way and that there is an EA critique. But if I recall, early EA advocates used Charity Navigator as one of their inputs.
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directevolve 211 days ago
Charity navigator quantifies overhead. EA tried to quantify impact. To understand the difference, consider two hypothetical charities. Charity A has $1 million/year in administrative costs, while charity B’s costs are only $500,00/year.

Based on this, charity navigator says charity A is lower-ranked than charity B.

Now imagine that charity A and B can each absorb up to $1 billion in additional funding to work on their respective missions. Charity A saves one life for every $1,000 it gets, while B saves one life for every $10,000 it gets.

Charity navigator wouldn’t even attempt to consider this difference in its evals. EA does.

These evals get complex, and the EA organizations focused on charity evals like this have sophisticated methods for trying to do this well.

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lmm 211 days ago
The "Program Expense Ratio" is pretty prominent in Charity Navigator's reports, and that's almost exactly a measure of "overhead".
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