Rambling about Charity Overhead

Yes, this is a real ad campaign by KFC for Double Down sandwiches.

Let’s say some fast food restaurant is running a slick and savvy ad campaign that’s caught my attention. When I go to buy their food, do I complain that part of the price they are charging me is meant to cover part of the cost of their ad campaign?

What if I get a heart attack after eating all that fast food? Should I complain that part of the hospital bill goes to covering the doctor’s salary so he can earn enough to repay his student loans and justify spending all those years in med school?

As consumers, we will always be paying for expenses over and above the goods and services we directly benefit from. The same is true for charity: there are expenses over and above the help that any individual or community directly benefits from.

This is a no-brainer to everyone reading this. But I feel I need to state the obvious because what I’ve been saying about trackable donations and charity overhead has been misunderstood by aid bloggers who have stumbled across this project.

I’m not saying that overhead is bad. I’m not saying that overhead isn’t required. I’m not even saying that charities need to reduce overhead. What I am saying is that there is value in charities considering a different approach to covering overhead.

They should consider this because this matters to a lot of people.

It Matters to Donors

Most aid professionals assume donors don’t want to pay for overhead. This couldn’t be further from the truth. Rather, what many donors and potential donors are objecting to is the lack of control. And I don’t mean control over the poor.

Many donors hate how most charities are framing the conversation about global poverty through their advertising. Charities often portray the poor as objects we should pity. Donors don’t want their dollars used to fund more guilt trip messaging.

Screencap of charity TV ad. Black and white video? Check. Crying child? Check. Preachy voice explaining how only you can save them? Check and check.

Donors also want charities to treat them less like consumers and more like investors. And investors, unlike consumers, are allowed to have a say in how much of their money go towards overhead.

Although I think these are pretty damn good reasons in and of themselves, many aid bloggers have pointed out that it’s not about the donor. Donors, they argue, should be educated to give without requests, conditions, or restrictions.

Even if we agree with that premise, what I’m saying is still important because the only people who care more about this than donors are the recipients of aid.

It Matters to the Poor

You don’t have to take my word on this: ask Dildar Mahmud. He’s a District Manager for Save the Children USA in Bangladesh. He has over 20 years of experience in aid and development and makes a pretty convincing case.

Dildar Mahmud (left) is District Manager for Save the Children USA in Southern Bangladesh. He manages and oversees projects from USAID, The Global Fund, the Gates Foundation, and smaller partner charities.

As he explains it, major international charities are in a struggle to maintain their legitimacy among the poor on a near daily basis. The reason? The poor aren’t stupid and they can see how major charities are spending people’s donations.

For example, as Mr. Mahmud points out, what do you suppose villagers think when they see charities and NGOs driving staff around in SUVs? In many of the communities charities serve in, some villagers can’t even afford a pair of shoes.

SUVs like the one above are a mainstay in virtually every village I've been to in Bangladesh.

Similarly, what about the clothes that charity personnel have to wear? A button up office shirt and slacks may not seem extravagant, but it does stand out when everyone else in the village can only afford tattered lungis.

In some villages I've been to, the only people who could afford shirts were NGO officials. Don't worry, I'm not thinking of collecting a million shirts to send to them.

If only because I’ve tried to do without them, I see the value in things like SUVs and doing aid work with a proper salary. But the fact remains that many villagers take issue with charities using donations for the poor to cover these costs.

Why The Poor Prefer No Overhead

Village mothers complain to me about specific INGOs and aid officials they have problems with. The first question I get asked when I go to a village is whether or not I represent an NGO. Being able to truthfully say "no" seems to give me an automatic & instant boost in trust. That's speaks less about me and more about local attitudes towards NGOs/INGOs.

The fact of the matter is locals have been pulling each other out of poverty long before the first aid worker ever set foot in their country. Local methods of development are rooted in customs, culture, & family histories spanning centuries.

This is less about being Santa Claus and more about locals fostering 1-to-1 personal relationships with those in need. Because these relationships are based on personal accountability and reputation, this actually gives the balance of power to the poor.

If the poor are in any way dissatisfied with the conduct of the locals providing help, these locals stand to lose their personal reputation amongst the community. In this arrangement, the highest crime is to take a cut from funds meant for the poor.

With the advent of the NGO, the balance of power has shifted. NGOs and charities, unlike local individuals, can take a cut from donations as overhead. The poor, in turn, have to accept this reality or risk being branded as uncooperative beneficiaries.

As I’ve blogged about before, not only do the poor still prefer that charity be 1-on-1 and without cuts for overhead; but they also have an intense disdain and distrust of organizations that do. As they say “NGOs taka kai fellay” (“charities eat the cash”).

No Overhead Charities in Action

This isn’t an “us vs. them” scenario. Charities can be an invaluable part of a community’s development while still being respectful of local attitudes on overhead. This is because there are pre-existing charities embracing (or working towards) the no-overhead-from-public-donations model:

  • Charity: Water uses 100% of every public donation towards clean water projects (and not administrative or marketing overhead). They can do this because private donors have already covered their entire overhead.
  • Global Medic is a Canadian charity that has responded to every major international disaster in the past 5 years with clean water and medical support. Leveraging endowments and government support, every donation from the public goes to program costs. As they say: “we pride ourselves in being a no-overhead charity”.
  • Direct Relief has helped provide emergency medical relief after the Haiti earthquake and during the current Pakistan flooding. They leverage grants that cover their administrative overhead to ensure that 100% of public donations go towards their disaster relief operations.
  • Free the Children is one of Canada’s most well known charities. Craig Kielburger, it’s founder, created a social for-profit enterprise alongside this charity called Me to We. 50% of the profits of this enterprise go to Free the Children. Kielburger is using these funds to make Free the Children a zero overhead (from donations) charity.
  • The Catholic Church, believe it or not, has been a major charitable force in Bangladesh through the Holy Cross Congregation. The Holy Cross leverages general donations to the church to pay for its overhead and upkeep. This allows for those donating to help the poor to do so in a way where 100% of it goes to project costs. It’s been so effective that even World Vision has subcontracted and funded school construction projects through them.

The fact of the matter is every single day the no-overhead-from-public-donations model is being embraced by more and more charities. And the charities that have already embraced this model continue to grow and gain support from both donors and the poor.

My support of Charity: Water has been seen as a point of criticism for some aid bloggers.

Yet, despite this, aid bloggers have presented me with a no-win scenario when I dare talk about the value of no overhead donations and charities. Simply put: any model I put forward is either deemed “not scalable” or dismissed as just “bad aid”.

But the proof is in the pudding: Charity: Water has provided clean water to over a million people in under 4 years, Global Medic’s approach has been well received among it’s charity partners and the Canadian government, and Free the Children has been nominated multiple times for a Nobel Peace Prize (by Nobel Laureates – not the general public).

Most surprisingly, the Holy Cross Congregation has consistently maintained a high reputation in Bangladesh between both the Christian and Muslim populations. In a country where less than 1% of the population is Christian, that’s saying a lot. Remember, this is a region where Christian charities get their offices bombed.

I was hesitating writing anything about this since many aid bloggers didn't want to hear me out.

About Aid Bloggers

I’m not an aid blogger & I’m definitely am an outsider to the aid blogger community. And, to be honest, aid bloggers have every right to be leery of outsiders. While overall donations remain the same, more anti-poverty projects keep popping up.

Some of these initiatives are just bad ideas and can do more harm than good. I understand that good intentions aren’t enough, but I would like to respectfully suggest that aid professionals don’t have a monopoly on development wisdom.

Leveraging local wisdom and know-how on how people should help the poor is why I started this project in Bangladesh (my parents' homeland).

As I’ve said, locals have been helping locals long before the first aid worker ever set foot in their country. And locals will continue to help locals long after the last aid worker retires. So it behooves us to recognize there is legitimate local know-how, wisdom, and experience that exists outside of the “aid industry”.

It also must be said that this doesn’t have to be a zero-sum conversation. Charities can take overhead from donations and do amazing things and empower countless people. I don’t have to be wrong for what you are doing to be right. And vice versa.

I mention this because, as pointed out from within the aid blogger community, there is a propensity for criticism to get snarky. I have thick skin (literally & figuratively) but it’s my hope that, if we can’t see eye-to-eye, we can respectfully agree to disagree.

21 Responses to “Rambling about Charity Overhead”


  1. 1 Linda Raftree

    I can agree with a lot of what you are saying. A lot of the ‘aid bloggers’ blog about those same points. I’d say 99.9% of us hate poverty porn and are fully aware of the dichotomies and the disparities and we write about them often. I’d also say that every aid blogger I’ve met recognizes the knowledge and know-how of people that we are working with.

    I see the issue that you are bringing up but it seems to me that if you hide your overhead from the communities, you are not being transparent. Shifting money from one thing to another in no way removes your overhead and it seems somehow dishonest… Are you trying to say that one project is overhead free whereas another chunk of money is all designated as overhead? Overall, you still have overhead and if you shared your finances with the community it would be quite clear that you are just playing tricks with your accounting to suit donors and ‘recipients’.

    And what happens when no one wants to pay overhead and suddenly you have a large percentage of money that you’ve earmarked as going towards “no overhead” projects, and 2% to actually cover what you need to implement your programs? What will you do then? The cheapest programs are the “no overhead” programs — direct hand outs. And those have proven to be the worst kind of aid, causing dependency and digging communities into a bigger hole and not bringing about any sustainable change in the long term.

    I’m aware that communities have issues, and rightfully so, with how aid works. Most aid bloggers are aware and are working within our organizations to try to improve ‘aid’ and we are not shy about critiquing how aid works any more than we are shy about critiquing bad aid or questionable practices or calling out things that didn’t work 15 or 30 years ago that are being tried again. Hiding overhead from communities and donors doesn’t seem to be the right way to fix the situation.

  2. 2 Saundra

    I agree with Linda’s comments. If you read our blogs regularly you’ll see that many of us take on many of these same issues as well.

    Unfortunately, you’re helping perpetuate donor misconceptions with your list of “No Overhead Charities”. These charities do in fact have overheads, they’re just getting them covered from other funding sources. A quick peak at CharityWater’s financial statement shows that in 2008 they spent $558,914 on “Management and general” expenses and $391,409 on “development and public relations”- also known as fund raising. That’s over $950,000 spent on overheads compared with just shy of 5 million on programs. In other words 1/6th of all their income was spent on overheads. Not what I would term a “No Overheads Charity” – this is just a marketing ploy.

    By using phrases like “No Overhead Charities” you are helping perpetuate the false impression that aid can be done without overheads. Even local charities have overheads – sometimes these are paid for out of the volunteers own pockets but they’re still there. Yet if you ask the average person how they would go about evaluating a charity the first answer is always overheads.

    If you really want to give aid recipients more knowledge and control over the aid they receive then push for charities to follow the Who Counts guidelines developed by MANGO. Part of this is sharing financial information regularly with the aid recipients.
    http://www.mango.org.uk/WhoCounts/Resources But this would have to include all financial information, no just the money from individual donors.

    From my experience in the field, it doesn’t matter to the aid recipients if the funds come from individual donors, corporations, or government grants. It’s how it’s spent that matters. Yet you’re presenting it here as if there’s a difference. It’s still money spent on administration costs, where it comes from just depends on how you spin it.

  3. 3 Shawn Ahmed

    Hi Linda – thank you so much for leaving such a great comment. Some thoughts from what you wrote are below:

    1) Regarding recognizing the knowledge and know-how of people is what distinguishes the good aid workers from the bad. All I’m suggesting is things can go one step further by actually structuring and doing things the way many aid recipients prefer.

    2) I disagree on the idea that what I’m proposing is equivalent to “hiding overhead”. And the reason I disagree is because Bangladesh is a Muslim country where the majority of the population actively participates in the practice of Zakat. This is important because it shapes community expectations on overhead.

    For the benefit of anyone else reading this comment, let me quickly explain what Zakat is. Zakat is one of the five pillars of Islam. It’s a religious commandment that any person (who is not completely destitute) must give a certain minimum percentage of their income to the poor.

    Most Muslim Bangladeshis adhere to Zakat and most of them prefer to give Zakat in their ancestral home villages. What happens, since many of them cannot get to their home villages, is they give the funds to a friend or relative who is able to travel to their home village.

    Such means of giving of Zakat usually do not allow for the intermediary to take a cut for expenses involved in reaching the home village and/or the cost of spending such funds on the poor. To many, the idea of taking a cut from Zakat for such expenses is seen as a religious sin (though technically it shouldn’t be as far as I know).

    The result is that the poor are used to seeing people in their communities helping the poor in a way that no cut is taken for overhead. In fact, since Zakat happens every year, this is a form of charity work that is reinforced in virtually every street corner in every community in Bangladesh. It also bleeds into non-Zakat giving.

    So, in this case, I disagree that a no overhead charity would be akin to “hiding overhead”. Rather, it would bring a charity’s operations in line with the religious and cultural traditions of Bangladesh. And, at the very least, this would have practical benefits for any charity operating in any Muslim majority country.

    3) Regarding accountability, I have a few thoughts. First, from my experience, the poor are incredibly astute, smart, and wise. But, they don’t talk the same language. For us, accountability is financial statements. For them, it’s what they see with their own eyes.

    Remember, in the eyes of the poor, both aid recipients and aid workers are technically “beneficiaries” of donations. In this vein, what they see is they may get a well or an income generation program from donations, but aid workers get SUVs, laptops, and salaries to pay for business clothing. There maybe no imbalance in the spreadsheets, but there is one in plain sight.

    In a country like Bangladesh, having a separate pool of funds to cover such expenses can compensate for this. I once again cite the Zakat example: villagers know that it takes money to come into the community and spend Zakat, but they also know that such costs do not come from the pool of funds that was meant for them.

    4) Regarding running out of funds for overhead: in much the same way we sometimes under-estimate how smart the poor can be, I think we can also under-estimate how smart donors and donors willing to donate to overhead can be.

    The reason Charity: Water (and I apologize for constantly citing this example) is able to constantly cover overhead despite expanding year-in and year-out, is because they have a group of donors who are proud of the work Charity: Water does and are willing to take ownership by funding the need for overhead.

    Similarly, many charities like Save the Children already leverage corporate matching donations to lower the overhead cost of public donations. It’s entirely conceivable that, if the no overhead charity idea takes off, more corporate partners and foundations will be willing to support charities in the way they already support charities like Direct Relief.

    5) Regarding “hand outs”, I’m not advocating for “no overhead aid”. Good aid requires overhead – I won’t argue with that. But, at the same time, I’d like to caution as to what we consider to be “hand outs” vs. “hand ups”.

    Speaking from my own family history, I’ve had my great-great-grandfather build many schools in his village. They exist to this day and have helped to educate hundreds of thousands of children. Is that a handout?

    My grandmother, following her ancestors, has built homes for those in her home village, helped provide food on a regular basis, paid for tuition for children, and even paid for medical procedures for those sick and elderly.

    These, at first blush, may seem like “hand outs”. But, within her lifetime, she’s turned dozens upon dozens of villagers into successful middle class self-sufficient people with white-collar jobs in Dhaka City.

    In fact, many of them are successful enough that they now go back to my grandmother’s home village and are helping a new generation of children the same way my grandmother did. Pay it forward success stories like this are happening in every village in Bangladesh.

  4. 4 Shawn Ahmed

    Hi Saundra – I’m a huge fan of your blog and it’s always an honor when you leave a comment 🙂

    I don’t think anyone reading this blog post would believe I’m suggesting charity can be done without overhead. If anything, they should be thinking the exact opposite.

    I start off this blog post stating that overhead is necessary and repeatedly emphasize that by “no overhead” I mean “no overhead from donations meant for the poor”.

    Being a fan of your work, I noticed most of your experience is in Thailand. Perhaps that accounts as to why we’ve encountered drastically different expectations from aid recipients?

    It’s entirely possible that Bangladesh – a Muslim country where the majority of the population practice Zakat – has helped foster different expectations on overhead?

    I’m definitely not making this up. I didn’t invent the phrase “NGOs taka kai fellay”. And even professional aid workers in big INGOs (like Dildar Mahmud) point this out.

    If there is one take-away point from this blog post, it’s that this isn’t about donors, this isn’t about marketing ploys, rather this is about the poor and what they prefer.

  5. 5 Shawn Ahmed

    I forgot to mention this in my original reply, but in my original draft of this blog post, I wanted to connect what I was saying to this article by you:

    http://goodintents.org/aid-recipient-concerns/no-free-lunch

    Basically, the closer charities can re-create traditional forms of giving (1-to-1, no overhead, etc), the less there is a problem with the social stigma issue you raise.

    Again, this experience may only be applicable to Bangladesh and/or Muslim countries. But that’s still a large portion of the countries and communities that INGOs serve.

  6. 6 Saundra

    Shawn,

    I’m glad to hear you like my blog, I work very hard at providing the information average people need to make smart funding decisions.

    This concern about how charities are spending their money is not unique to Muslim countries – which is the second largest religion in Thailand and many communities I worked in were predominantly Muslim. The Listening Project has gone to over 20 countries to talk to villagers, religious leaders, and local business men about their feeling on international aid. http://www.cdainc.com/cdawww/project_profile.php?pid=LISTEN&pname=Listening%20Project This is a common issue everywhere.

    But this concern is not at all based on whether the money that pays for the big white SUV – or less expensive black rental truck – comes from individual donations or a corporate grant. And aren’t corporate donations and government funding also “donations meant for the poor.” The source of the money for administration costs is not the primary factor in aid recipient unhappiness.

    Although you state that the take home message is about the poor and what they prefer – and we’re both in agreement about the importance of their needs – you spend just as much time arguing for the needs and wants of the donors. “Donors also want charities to treat them less like consumers and more like investors. And investors, unlike consumers, are allowed to have a say in how much of their money go towards overhead.” but this is only true is you are a major investor. Look at how many people have bought stock in companies that give their CEOs hundreds of millions of dollars in compensation. I’m sure they’d much rather have that money reinvested into the company in other ways or paid out in dividends. Individuals or organizations that give substantial amounts of money do have more control over how the money is spent both in aid and in business.

    The problem with giving donors have a bigger hand in deciding where their donation goes is that this leads to projects being implemented based on donor whims and trends – which change over time and may not be at all based on the actual needs on the ground. Ask the aid recipients and I’m sure they’ll tell you they’d rather have programs that are based on their needs and not the needs of donors.

    So since overheads are a very real part of doing aid and aid recipients don’t distinguish between overheads that are covered by individual donors or other sources, the focus on “no overheads” is really for the benefit of the donors. And believe me you, most charities would love to find other sources to cover their administration costs. But these are extremely difficult to fund. SSIR has a great article called the Nonprofit Starvation Cycle talking about this very issue. http://www.ssireview.org/articles/entry/the_nonprofit_starvation_cycle/

    I think perhaps part of the problem is that you’re arguing for both the desires and expectations of the donor and the needs and wants of the aid recipient. Unfortunately these are often in conflict. It’s one of the biggest challenges that charities deal with every day, and it’s why I work so hard to educate donors.

  7. 7 Shawn Ahmed

    Hi Saundra,

    What this conversation is teaching me is that I better need to document what I see to prove that I’m not making this up.

    For example, here’s a clip with a charity I teamed up with is explaining to some locals that no cut is being taken from donations:

    What I should have done is kept the cameras rolling. Because, no matter where I go or whom I explain it to, this is well received (and preferred) among the poor.

    Not only that, as you can see from the clip, the way this usually is explained is by comparison to how locals fundraise and given outside the NGO-system.

    At the very least this indicates that aid recipients and locals do distinguish between donations covered by individuals and other sources – a point you don’t agree on.

    We’ll have to agree to disagree on the fact that the poor do prefer a system where overhead is covered by means other than “donations meant for the poor”.

    My experiences, my discussions, and my footage all speak to this. And, the charities I team up with and do this approach with all see marked differences in satisfaction among beneficiaries.

    What we CAN agree on is that the poor should have the balance of power when it comes to deciding how donations should be spent.

    I’m only citing donors because this is case where, from my experience, there are a group of donors and a group of recipients who want the same thing. There is no disservice in trying to facilitate these two reciprocal desires.

  8. 8 Shawn Ahmed

    Hi again Saundra – just for the benefit of others who were following our chat on Twitter, I thought I’d sum up a few things over here.

    Basically, even if the overhead was 1/2 instead of 1/6th, it wouldn’t be an issue. Because every penny that was spent on overhead in the Charity: Water model was given willingly for overhead.

    This is something that I think charities can benefit from actually. Because, this actually helps avoid or avert the “Non-Profit Starvation Cycle” you mentioned below:

    http://www.ssireview.org/articles/entry/the_nonprofit_starvation_cycle

    Instead of constant pressure to lower costs, charities can actually have an opportunity to INVEST in providing services by separately fundraising for overhead. Charity: Water, for example, has invested in more overhead than other charities so that they can properly document, film, and GPS tag where the money goes.

    This can also be a win/win for charities to. I see two things happening. First, charities can attract younger donors who want 100% of their money to go to the poor. As they grow up, get an income, they may want to start investing in the overhead of the charity to support the growth of the charity they fell in love with as a kid.

    Similarly, you may find older donors with disposable income donating on a monthly basis. They may opt to alternate between donations to the poor one month and supporting a charity’s overhead the next month. Again, this would be a win/win because it potentially could lead to more donations for overhead to invest and grow the organization.

    Best.

  9. 9 Katherine Lucey

    I’ll leave the zero-overhead discussion to the eloquence and expertise of Linda and Saundra – but I am really interested in this aspect of your article. You state that “Many donors hate how most charities are framing the conversation about global poverty through their advertising. Charities often portray the poor as objects we should pity. Donors don’t want their dollars used to fund more guilt trip messaging.”

    I would love to believe that is the case. And if it is, could you please cite the research that backs up your assertion. It would be tremendously helpful – we could send it to Tom Murphy (aka @AViewFromTheCave on twitter). On his blog, Tom posted a very interesting dialogue with Smile Train asking them to please stop using the image of a child with tears running down her disfigured face in their donor marketing. He was respectful and specific in his asking them to consider the rights of the child and the impact that such images have in perpetuating a system where such images are OK.

    Smile Train’s reply to his request blamed the choice on donor demand: “As much as we would love to show the beautiful smiles of the children after their surgeries in all of our advertising, our latest market research tests have shown that, presently, we do receive a higher donation response to advertisements that only feature the before pictures. In order to help more children, we have to go with what our market tests tell us.” (you can read his blog post with the full back and forth correspondence here: http://www.aviewfromthecave.com/2010/09/smile-trains-marketing-decisions.html ).

    If you have some data that could counter Smile Train’s assertions that donors actually DO fund guilt trip messaging – then perhaps that could be used to help Tom’s noble cause to change the face of one very large and prolific aid organization.

    Thanks.

  10. 10 Shawn Ahmed

    Hi Katherine – thanks for the comment. I unfortunately don’t have quantitative data at the moment. Just self-selected qualitative data left through numerous comments and tweets and youtube videos about the issue. I highly recommend you check out NY Times Best selling author John Green and his take on guilt driven charity messaging:

    One thing I can definitely say is that guilt driven messaging has certainly declined since I started this project. I think charities are starting to get the message. Back when I first started talking about it, virtually EVERY charity that responded gave me the Smile Train type reply. But now you have charities like Save the Children USA that bans guilt-driven imagery (just the US-branch though).

    Best.

  11. 11 Bottom Up Thinking

    Hmm. Disregarding the slightly fatuous debate about whether no-overhead charity is possible – it generally isn’t – I see two interesting points from this:
    1. Poor Bangladeshis have a cultural aversion to ‘skimming’ overheads from zakat. (They themselves are able to leverage social capital to deliver alms without overhead; this social capital may have had some cost to build it up, so from a pure economics perspective, is not entirely free, but I doubt that argument would cut much ice with the Bangladeshis.) This therefore strikes me as a presentation problem. Just as Islamic finance has succeeded in reconciling Islamic law with economic principles, maybe NGOs working in Bangladesh need to find a means to present their work as free of overheads. The charities you listed have maybe succeeded in doing just this.
    2. That said, you point out, reasonably, the impact that rocking up in villages in ones SUV has on the poor villagers. So what do these overhead-free charities do? Travel on public transport? Maybe they’re only overhead free to the donors (who should know better) and not overhead-free to the recipients (whose opinion matters rather more). MJ

  12. 12 Shawn Ahmed

    Hi MJ,We’re on the same page on everything. There is no such thing as “no overhead” charity. I just think that Bangladeshis prefer that overhead be exogenous of donations to the poor (i.e. covered by other means or other sources).Structuring an organization in a “no overhead” manner (where overhead is covered and raised separately) is not enough. You’d still need community integration, community ties, and trust-building. Basically, after you’ve built these ties, it’s then possible to explain how the NGO is not “eating the cash” from donations. No overhead is not a sufficient condition for good aid, and taking overhead isn’t a sufficient condition for bad aid. There is a lot more at work. It’s only because me talking about overhead has raised eyebrows that I’ve spent this much time talking about it.In my humble opinion, I believe that what matters the most is the connection that is fostered between donor and recipient. I don’t mean in a sponsor, sponsored child kind of way. I mean in the way that Bangladeshis have traditionally helped each other. One which skews the balance towards the poor.Best.

  13. 13 Shawn Ahmed

    Hi MJ,We’re on the same page on everything. There is no such thing as “no overhead” charity. I just think that Bangladeshis prefer that overhead be exogenous of donations to the poor (i.e. covered by other means or other sources).Structuring an organization in a “no overhead” manner (where overhead is covered and raised separately) is not enough. You’d still need community integration, community ties, and trust-building. Basically, after you’ve built these ties, it’s then possible to explain how the NGO is not “eating the cash” from donations. No overhead is not a sufficient condition for good aid, and taking overhead isn’t a sufficient condition for bad aid. There is a lot more at work. It’s only because me talking about overhead has raised eyebrows that I’ve spent this much time talking about it.In my humble opinion, I believe that what matters the most is the connection that is fostered between donor and recipient. I don’t mean in a sponsor, sponsored child kind of way. I mean in the way that Bangladeshis have traditionally helped each other. One which skews the balance towards the poor.Best.

  14. 14 Shawn Ahmed

    Hi MJ,We’re on the same page on everything. There is no such thing as “no overhead” charity. I just think that Bangladeshis prefer that overhead be exogenous of donations to the poor (i.e. covered by other means or other sources).Structuring an organization in a “no overhead” manner (where overhead is covered and raised separately) is not enough. You’d still need community integration, community ties, and trust-building. Basically, after you’ve built these ties, it’s then possible to explain how the NGO is not “eating the cash” from donations. No overhead is not a sufficient condition for good aid, and taking overhead isn’t a sufficient condition for bad aid. There is a lot more at work. It’s only because me talking about overhead has raised eyebrows that I’ve spent this much time talking about it.In my humble opinion, I believe that what matters the most is the connection that is fostered between donor and recipient. I don’t mean in a sponsor, sponsored child kind of way. I mean in the way that Bangladeshis have traditionally helped each other. One which skews the balance towards the poor.Best.

  15. 15 Dale

    Interesting series. We just had a big news report on this issue (BC Canada) and it really raised a lot of ire with people who donate. However, rather than address that issue, which I think Dan Pallotta has done well enough with already, I offer the following personal philosophy and experience.

    I only have a little over 12 years experience working in international development, but it seems to me that the main point of this bog – administration costs – is really a red herring issue when it comes to those who we work with in the field. I think it comes down to the perception of what we do, and who we do it for. The idea of “charity” and all of the connotations that go with it need to be jettisoned. Terms like donor, beneficiary and aid all tend to be colored with the wrong idea.

    I work for a group in Kenya, and we start with the concept of joint partnership with the community. It’s strictly business, whereby each party brings something to the project, and terms are set out along with time lines, deliverables, and so on – in context of course. It may be as simple as 50 buckets of sand delivered by Monday afternoon, or five lunches prepared for a work crew. Regardless, it’s a mutually agreed upon business partnership – not aid. Now it doesn’t matter what the cost of the agency is to operate or implement the project, it’s not aid money anymore that the “beneficiaries” are entitled to.

    In terms of the “donors” who provide the funds, we do operate with what has been described in this blog as a “no overhead” charity whereby administrative costs are raised separately, but our donors are not fooled by this, they are just happy to note that their donation is not part of those costs.

    So my point is this. If the “beneficiaries” are no longer in receipt of aid, or donor money, but are instead engaged in a joint venture business project, then the other issues mostly evaporate. Even the SUVs and business clothes…

    For what it’s worth.

  16. 16 Anonymous

    Great discussion, given me a lot of thought is our young charity forges its way through sometimes muddy waters.

    I’m actually wanting to hi-jack your thread here and get a question into Dale about how he structures the Canadian side of his organization. The work he does in Kenya sounds very similar to how we operate in Uganda, that is, through a kind of business partnership instead of as recipients of aid.

    Anyway, I’d love to have a discussion with Dale and lean on his 12 years of experience. I’ve posted from my twitter profile or email at alan at raisingthevillage dot org.

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  1. 1 Who’s Counting? | The Uncultured Project
  2. 2 Charitable Donations Include Overhead – Here’s Why | Good Intentions Are Not Enough Charitable Donations Include Overhead – Here’s Why | An honest conversation about the impact of aid
  3. 3 The Value of Overhead from Public Donations | The Uncultured Project
  4. 4 What Coming to Davos Means to Me | The Uncultured Project
  5. 5 Negative Attitudes to NGOs in Bangladesh | The Uncultured Project
  6. 6 Why Do We Fight? | The KOHbear Report
  7. 7 The Nexus of Aid Work & Islamic Extremism | The Uncultured Project
  8. 8 My #SocialGood Favorite of Day 1 | The Uncultured Project
  9. 9 5 Steps for NGOs to Move from Guilt to Empowerment | The Uncultured Project
  10. 10 We Speak For Ourselves | The Uncultured Project

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