We say it all the time. “Ninety-four cents of every Africare dollar goes to program activities in Africa.” And it’s true. Independent, certified public accountants confirm this number, and at Africare we always make sure that anyone can view our audited financial statements and IRS Forms 990 online if they wish. Our financial records demonstrate, substantiate and corroborate the number in every way. But beyond being legitimate, this statistic is also a simplification. Let’s look at it more closely.
Africare’s expenses in fiscal year 2012 totaled $74,896,172. Of that, $70,227,077 went to project services, as opposed to the “support services” of management and fundraising. Dividing the project service expenses by our total expenses calculates what percentage goes to programs. If you’re doing the math, you’ll notice that the first simplification is rounding. The answer is 93.8%. Ninety-three and eight-tenths cents of every Africare dollar goes to programs in Africa.
The second simplification is when the divvying occurs. The $70.2 million we spent on projects last year consists of donations from individuals, companies, governments and more, from different places and with different requests regarding where they want it spent. Therefore, the destiny of those 94 cents is not predetermined by a formula we can predict. Instead, throughout all our transactions, money goes where donors request it to go and also to where it needs to go for Africare’s work to be most successful. When we sum everything up, those 94 cents represent a careful process of setting priorities and building a cost-effective organization. For example, we recently sought out an external fundraising audit to learn how we can raise more money more effectively, but your donations didn’t even have to pay for it. We secured the service pro bono.
The third simplification is the meaning of “program activities.” Program activities include more than just the project’s final product. Consider a well construction project – the physical wells represent some of the project’s costs, but not all. Before any construction begins, country staff first administer a “needs assessment” determining where communities most need clean water, to maximize the value the wells provide. To begin constructing a well, these often-isolated communities first need building materials, and another cost comes from the motor vehicles and fuel that transport them. Staff also spend time educating community members on ideal use and maintenance of the wells, extending the wells’ durability and effectiveness. Promoting hygiene practices, including through training and equipping community ambassadors to spread the message to their neighbors, keeps the newly flowing water clean.
This might surprise readers to different extents, but logistical expenses and salaries of project staff are included in “program activities.” This is true across the board in the field of international development. If you initially thought that 94 cents of every dollar you donated would go to only the final output – the physical well materials in a water project or the bed-nets in a malaria project – the personal reward of donating might at first seemed cheapened, but it shouldn’t.
These varying costs of carrying out a project pay for things that increase its impact and sustainability, and this money still goes to local citizens. Africare contracts with local firms to perform different functions. In an ongoing community library project in Angola, we contracted a local Angolan company to restore the building that will become the library. Moreover, Africare hires local citizens to fill more than 95% of its in-country staff positions. So, when donations go to projects, they also go to African salaries, which our staff members use to further their careers, to buy goods and services in the local economy, and of course to support their families.
There is even a growing argument against using overhead rates to evaluate non-profits. Increased investments in fundraising and staff may make non-profits less frugal, but much more powerful. Excessive pressure to cut costs could even starve charities into ineffectiveness by leaving too little to pay competitive salaries or invest in updated technology. These are the kinds of purchases that Africare’s remaining six cents pay for – fundraising events and marketing materials that raise money and enlarge our donor base, computers and phones to conduct business and communicate with African country offices, electrical bills and headquarters staff salaries. These expenses do not immediately improve the quality of life in Africa, but the scope, depth and growth of Africare’s impact would be impossible without them. We operate efficiently, and we carry out projects that make sizeable, lasting impacts on communities.
Deciding to support an organization requires trust. We know that trust is earned. Why should you trust Africare with your donation? You should trust us because we know that your donations are what sustain our work, so we will always make sure you know how we work. Honesty is Africare’s policy. Believe that.