MSC archived stories - March 5, 2022
CI 2021 Annual Report (concise) just came out at the February end.
82% - Program cost
18% - Running cost
I pondered on something which I thought sharing with you. That is, the 10% service charge on Extra Gift donations we make over $100.
For example, $110 will result the child/family receiving $99 to spend on. However, if I want to give the child $100 + (10% to CI) = $110, my contribution will remain the same yet the family receives more!
This sounds like the latter approach better serves the beneficiaries financially than the former and could be seeing as justification for supporting struggling families earning less than $3 per day.
But in another context, you may argue that cost of providing services is mutually exclusive from value of goods. It's like buying a book versus paying a teacher to teach it to a child. So, organizations like CI have adopted the policy of charging a fixed 10% of donated amount, which I think compared to the last year's fiscal performance is a better strategy.
Ref: www.children.org/globalassets/documents/children-international-annual-report.pdf
I read with interest your analysis of the Extra Gift in relation to this year’s Annual Report. I interpret the application of the 10% fee a little differently, that is, when I donate $112.00US, subtracting 10% ($11.20), I assume the child will receive the equivalent in their national currency of $100.80. Any small differential is mainly important to me as I like the feeling of having given the child/family a full $100. It seems most noticeable in Ecuador where the national currency is the US dollar. However we look at it, I think we’re on the same page in that we understand there is a cost, such as foreign transfer fees, associated with administering these gifts.
ReplyDeleteMarch 5, 2022
barbmc
ReplyDeleteNo it won't. 10% of $100 dollars is $10 child gets $90 dollars. 10% of $110 dollars is $11 dollars. Child gets $99 dollars. You can't even give an EG of under $50 dollars for your child. Any EG has to be for at least $50 dollars. Any donation under $50 dollars goes to the general fund. But even if you could it would still be the donation of $100 dollars gets $90 dollars for the child. The donation of 10% of $10 is $1 dollar so the child gets $9. dollars. The total is still $99. Obviously there is a cost to CI that comes with EGs. both of time and. money, ect, Are you saying the 10% charge has changed?
March 5, 2022
Chelaka, newer current sponsors might be interested to know this: As you have been a sponsor for many years, you might remember earlier this century there was not an Extra Gift fee. Sometime around 2011-2013, CI briefly initiated a 20% EG fee consistent with their 80% services for children/20% administration ratio at the time. Based possibly on feedback, they adjusted this fee to 10% which is still in effect today. Given that we support the organization in all their efforts we certainly find it reasonable to contribute to the additional costs of Extra Gifts.
ReplyDeleteMarch 5, 2022
Finally, on another note, while reading the Annual Report, I immediately thought of you on seeing the purple box entitled “A trusted voice in our communities - Vaccination efforts around the globe.” I’m thinking back to your questions not long ago about CI participating in supporting vaccination. At the time we learned Honduras community centers had been used as vaccination sites, and I knew you’d be interested in the other ways CI communities around the globe have participated. Once again I’m in awe of all that CI accomplishes!
ReplyDeleteMarch 5, 2022
Liza, Firstly Thank you for quoting "A trusted voice in our communities - Vaccination efforts around the globe.” I had no idea where you saw it because for us in Europe the full Annual Report is not available to view on the site, so I had to dig on the web to find that out [https://anyflip.com/ugfv/vlbh/basic]. I'm amazed to learn the work CI done on Covid front.
ReplyDeleteMarch 5, 2022
Regarding the 10% rate, early days when requesting (pre-donation) memo inquiries I used to get an itemized cost breakdown with 10% charge added to the value of goods, which I thought was fair. Also, I started to see the same 10% applied to my EGs based on donation made, which is not the same calculation. I could not get my head round (neither CI!), so had to come up with my "book theory" to understand the rationale behind. Yes, I certainly agree with Liza and makes sense to 'protect' EG charging against economic volatility. Furthermore, CI waive this fee for educational or medical donations, which other organizations may not.
ReplyDeleteMarch 5, 2022
On Barb's point, my understanding is that you can still make instalment payments toward minimum amount (say, $10 + $10...= $50) required for an EG, so long as CI is made aware of this. (Flat fee of $10 applies to EG less than $100)
ReplyDeleteMarch 5, 2022
barbmc
ReplyDeleteConfusing. but the % of the service fee varies. When you send an EG for $50. the fee will be $10. (that's actually 20%) because there's a $10 dollar minimum fee. The child / family will get $40. If you send and EG of $100 or more the fee is 10% regardless how much you send. I'm thinking any extra fee money you send to CI isn't going to your sponsored child. I don't know that CI accepts small amounts of money for future EGs. I'm hoping CI will clarify this!
March 6, 2022
I guess I’m behind on the times- I had the 20% in my head and try to adjust for it. I do try and do what you do, Chelaka, and give extra so that the family will have more. Although of course its not always possible. Anyways, no matter the amount, the important thing is that the children feel loved.
ReplyDeleteMarch 7, 2022
Wow, lots of comments and questions! Let me start with the easy one first: Unfortunately, you can not make "installment" payments to CI to be accumulated for an EG at a later date. Our system just does not have a way automatically process this and while it has been done a time or two as a "one-off" for a sponsor, it is definitely a time consuming manual process that can easily get goobered up!
ReplyDeleteMarch 7, 2022
Number 2: So sorry you could not easily find the "Special Report" liza92037 was referring to Chelaka. It was sent to some of our donors on 3/4/22 - but it was uploaded to the website today for the entire world to see. It's really informative, so I urge everyone to check it out. It lives with our financial information and you can find it by clicking on "Smart Giving" at the footer on MSC/the website.
ReplyDeleteMarch 7, 2022
Sorry...took a sponsor call and ran out of time for #3 (admin fee calculation), will get to it tomorrow!
ReplyDeleteMarch 7, 2022
barbmc
ReplyDeletedebbies: CI is very transparent about how the sponsors money is being used. If you go to the CI dashboard, click on "my giving"and scroll down to the bottom of the page to where it says " bump up your monthly payments" it states"we'll put the extra towards rising costs to keep the benefits strong for all children including yours" Couldn't a similar format be used with regards to the Christmas Fund and the Birthday Fund (Including the donation requests sent by mail) to eliminate confusion there?
March 8, 2022
When CI receives an Extra Gift of $50-$99, a flat $10 administrative fee is applied. So for $50, we would transfer $40. A $75 gift would result in $65 being transferred. For Extra Gifts $100 or more, the admin fee is 10%; however, we do cap the fee at $100. So for example, gifts totaling $1000, the fee would be $100 and $900 would be sent. Gifts of $1200, the admin fee still would be $100 and $1100 would be sent to the agency.
ReplyDeleteMarch 8, 2022
barbmc
ReplyDeleteErinBleck15: Thank you for this information. It may make a difference how some sponsors send EGs, especially on big ticket items (like home repairs, income generating projects, ect. Does this apply to all EGs over $1,000 I don't think many sponsors knew the administration fee is capped at $100 dollars. Good to know!.
March 8, 2022
Hey Barb, the 10% admin fee for EG's of $100 or more, is capped at $100 dollars. So if a sponsor sends a donation of $1,000 or more the admin fee would be capped at $100. For example a $2,000 EG has an admin fee of $100.
ReplyDeleteMarch 8, 2022
barbmc
ReplyDeletedebbies: Thanks. I meant the 10% administration fee is capped "stops" when the donation reaches $1,000 dollars. But I see what you mean so I changed it. It"s like a $10 dollar bonus for the child for every $100 dollars donated above $1,000. Cool! I'm curious, does that $1,000 donation include Medical or Educational EGs? Even though they don't charge administration fees They are still donations / EGs. Just asking, because then a sponsor could include some extra money and the child/family would get the full amount.
March 8, 2022
@barbmc--as always, medical and educational EGs are exempt from administrative fees.
ReplyDeleteMarch 9, 2022
barbmc
ReplyDeleteErinBleck I5 I know that.That's not what I'm asking. I'm asking can a sponsor combine another thing with an educational or medical EG. Example: $!,000 for Education + $200 extra, for whatever they need the most (total donation = $1,200 dollars." Does CI still charge the 10% administration fee on the $200 dollars or not?
March 9, 2022
Oh, I apologize for misunderstanding your question. Using your example, yes, the $200 would be subject to the 10% admin fee ($20 for admin fee).
ReplyDeleteMarch 9, 2022