Where do you get your funding?
Room to Read has attracted many "blue chip" funders since our inception, and we now have a diverse funding base that consists of individuals, family foundations, foundations, corporations and schools. In 2010, the breakdown of support between these sources was as follows:
- 66% Individuals and Family Foundations
- 21% Corporations
- 11% Foundations
- 2% Schools and Other Sources
Top institutional funders of our work include Artha Capital, Atlassian, Goldman Sachs, Credit Suisse, Barclays Capital, Bill & Melinda Gates Foundation, The ELMA Foundation, Bloomberg, and the Caterpillar Foundation, among others.
How efficiently do you spend the money your investors give to you?
We pride ourselves on operating efficiently and effectively to enable maximum investment in our programs. From our inception in 2000 through 2010, we have kept our overhead expenses to 17% of total expenses. Although this number will increase as we make strategic investments to build capacity, we will always do our utmost to make sure that your money goes towards helping children in the developing world, not to a wasteful bureaucracy or to unnecessary programmatic spending. And since villages are co-investing in our projects, your support is often leveraged and sometimes even doubled.
How do you calculate or define overhead?
Room to Read (and most other non-profits) defines the overhead ratio as the total administrative and fundraising costs divided by total expenses (administrative, fundraising, and programmatic). Per IRS guidelines, all expenses are broken into three categories: management and general administrative, fundraising, and program services. When calculating the overhead ratio, the first two go into the numerator, while all three go into the denominator:
||Total Administrative & Fundraising Expenses
What is a standard overhead rate for charities??
According to the Better Business Bureau Wise Giving Alliance's Standards for Charity Accountability, charities should keep their overhead rate at 35% or lower. Traditionally, Room to Read has operated at half of that rate--something that we are very proud of! And despite the increase in our overhead ratio to greater than 15% in the past few years (2009-2011), we pledge to continue to scrutinize every area of our business to keep our overhead expense well below the industry standard and to spend your money efficiently.