Foursquare Disaster Relief (FDR) is a specialized arm of The Foursquare Church that responds to the most devastating disasters worldwide. Partnering with local churches in affected areas, FDR brings supplies, workers, and hope long after the media have left.
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Foursquare Disaster Relief donation Q+A
Foursquare Disaster Relief (FDR) operates with 10 percent or less of overhead expenses. This 10 percent is broken down to basic administrative costs, such as communications, print material, donor thank-yous and Foursquare Connection costs (expenses that are not field focused). As part of The Foursquare Church, FDR is able to utilize resources from the departments of the central office, such as Human Resources, Information Technology, Accounting, Legal, Foursquare Missions International (FMI), the National Church Office (NCO) and other Foursquare services at no additional expense to FDR. Ninety-three percent of every dollar helps provide the best response, care and relief to victims of disasters in the U.S. and around the globe.
Overhead costs within nonprofits can be somewhat of a mystery and concern for some donors. The Foursquare Church is part of the Evangelical Council for Financial Accountability (ECFA). As part of The Foursquare Church, FDR upholds the standards set forth by the ECFA and is accountable for good financial stewardship.
The term “overhead” is actually quite nuanced. Donors often interpret the efficiency and effectiveness of an organization based on its fundraising and administration costs.
Any percentages of overhead within nonprofits are usually comprised of two things: accounting and assignment. “Assignment” refers to how an employee is utilized. For example, an executive’s function may comprise 50 percent field operations, 25 percent fundraising, and 25 percent administration and management. The percentage of time given to each function is referred to as an employee’s “footprint,” and also helps inform the allocation of funds toward salary and expenses.
More than the numbers, well-informed donors often respond on the basis of an organization’s credibility. While there are some who may only care if the overhead percentage number is low, it is helpful to keep in mind that donors often have a higher expectation that overhead percentages be lower for the nonprofits they support than consumers typically have for for-profit businesses.
When landing on an overhead number, there are a few things to consider. This is especially the case with lower overhead numbers. Immediate questions include the following:
- How are nonprofits managed if the desire is to keep overhead expenses low? In all organizations/businesses/nonprofits, someone has to mind the store. Organizations need administrative support, someone to drive sales and basic management. Having competent people in those roles costs money.
- What are “in-kind” donations, and how do they help drive down overhead percentages? Most organizations publishing extremely low percentages are able to do so because of what are considered “in-kind” donations, which can consist of tangible supplies or professional help. For instance, if an organization receives donations of food products or medical equipment (which could be worth upwards of thousands of dollars), it can offset the costs of overhead expenses with the “in-kind” goods. Likewise, when it comes to the donation of time, if people volunteer hours directly related to their vocations, those hours can also be considered “in-kind” donations. These are a couple of examples of how organizations might offset their figures to display low percentages of overhead.
- Organization comparison. Most donors like a way to compare and rank organizations side by side, comparing efficiency and effectiveness with this number. This is rarely an “apples to apples” comparison, however. Given the nature of how these numbers are tracked and offset, organizations interpret and adopt their own expense allocation guidelines when determining what constitutes fundraising or overhead.
Yes, FDR offsets expenses with “in-kind” gifts. FDR’s partnerships with local Foursquare churches both in the U.S. and around the globe enable us to have “boots on the ground” in the immediate wake of a disaster. Utilizing The Foursquare Church’s infrastructure and systems helps keep our expenses down, and allows us to resource more in our response.
Scripturally, it is a blessing and act of worship to give, and FDR is honored and privileged to be a part of resourcing the local church to represent Jesus to people in their time of need. We encourage our donors to share in our accomplishments and stories of the lives that have been touched and transformed as a result of their giving and compassion. We will constantly strive to be open, accountable and transparent in all that we do. We thank you for your partnership.