How do you rate a mission organization’s impact and effectiveness at achieving its purpose? Many times, financial indicators and ratios are used to measure impact. Financial partners may ask, “How much of every dollar goes directly to programs?” While these overhead to program ratios may be beneficial as one type of measurement, they do not tell the whole story and are not the best indicators of effectiveness.
What do we mean by overhead and program ratios? Every dollar you give to World Gospel Mission is apportioned to various cost categories. Overhead and fundraising costs are not associated with any particular program and include infrastructure costs, such as technology and financial systems, building maintenance, fundraising, legal costs, and administrative support salaries. Robust infrastructure systems are critical to supporting WGM missionaries who serve around the world. Gifts must be receipted to donors, expenses reimbursed, grass mowed, email systems checked, and travel costs incurred as missionaries build support teams.
Rather than focusing on low overhead and fundraising cost ratios, more value should be placed on whether funds are being used to achieve organizational effectiveness, public accountability, and proper governance. Low overhead and fundraising ratios could have adverse impact if adequate systems are not in place to support the mission of WGM.
WGM’s ratios for 2015 to 2016 include:
- 82 percent for program costs
- 12 percent for administrative costs
- 6 percent for fundraising costs
However, what does that really tell you about the impact WGM is making toward achieving its goals? Are people hearing the gospel? Are infrastructure systems in place to adequately support missionaries serving around the globe? Are missionaries funded quickly enough to keep the costs of fundraising low? Overhead and fundraising costs that are too low may mean the missionary or ministry project does not have adequate support to succeed. Overhead and fundraising expenses should be based on whether these costs increase the organization’s net mission value. One organization with an 82 percent program ratio may be accomplishing its goals while another with the same ratio may not.
Donors should not use these ratios as the “sole” basis for measuring impact and for making philanthropic decisions. These costs have no meaning apart from their contribution to the whole effectiveness of the Mission. Hearing the “soul” impact WGM and the missionaries you support are making around the globe should be the driving factor in your charitable decisions. Impact is what matters most!
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