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April 13, 2005

“Reflections on Overheads” by Rick Brooks


Individuals and organizations who have contributed to tsunami relief often want to know how much of their support “goes directly to people who need it” and how much is taken out for “overhead” or administration. These are reasonable questions given the scandals at the United Nations, United Ways and many non-profit agencies as well as corporations. Such concerns are complicated further by the large sums of money donated in response to disasters and the differences in pay scale that international non-government organizations often require to recruit and retain competent personnel to work abroad.

When charity is involved rather than profit margins or commercial formulas for the cost of doing business, the intent of the donor and fundraising costs add to the equation. For many reputable organizations, an “indirect rate” for administrative costs can be as high as 30 percent or more. In the United States, for example, universities often negotiate contracts with government funders with indirect rates of 40, 50, 60 percent or higher. The standard mark up for products in retail stores is often 100 per cent. In consulting businesses, good managers know that they should bill two to three times what they pay their staff in order to stay in business.

Because Sarvodaya relies on sharing of labor and has a history of “doing a lot with a little,” its costs for administration have traditionally been far below other organizations. But understanding what it takes to keep the lights on and vehicles running, even when salaries are so low, requires more than looking at accountant’s reports. The following details may help.

Here is what it costs. What it takes. What is given willingly. It is not enough but it is a beginning. Sarvodaya stewards of your dollars and rupees want you to know they do not take you for granted.

It would be easier, of course, to simply hand out that money. But it would be a mistake.

Instead, it takes A.T. Ariyaratne making one more and one more visit to show poor people that he knows they are there waiting, barely living in those tents. It takes a driver, a vehicle and two passengers six hours on a good day on roads that rarely allow you to travel faster than 30 or 40 miles per hour. It takes two overnight stays on this trip, for example. It takes three more vehicles full of Sarvodaya staff, having lurched and bounced over the mountains most of the night after a full day’s work the day before that and the day before that.

The vans they travel in burn petrol that costs two to three times as much as it does in the U.S. if the stations are open in Sri Lanka and the petrol has been delivered on time. In a country when duty or luxury tax can triple the cost of an already expensive import, a pickup with shock absorbers and brakes that have survived lifetimes of abuse is still expensive to maintain. Sarvodaya has vans that have been completely rebuilt and repainted by genius boys who cook over an oven made from an oil can; who have never set even a bare foot in an automobile repair class.

This ceremonial trip to bless the foundations of new houses and pre-schools takes a district center coordinator who has had staff at work for days arranging for food, chairs, signs, sound systems and signs at each of six locations. It takes ginger beer or soft drinks and finger food to offer visitors. Signs saying things like “We warmly welcome our distinguished guests.” This is not “extra.” It’s what gives these events meaning.

Tarps have been hung to keep out the sun and the rain. Newly printed banners hang above the sandy roadway to where the ceremony will be held. There has to be enough water for everyone to drink. A half barrel of rice that somebody has to cook.

Because there will be at least five locations for events today, the district center will be busy. At least 40 people have to be fed. These are not office workers on holiday. If they are lucky enough to be paid, they might get $10 to $12 a week for their 40 to 60 hours. During the “tsunami time” those hours were endless.

Something had to be done to keep them when other relief organizations started offering three and four times as much—or sometimes 20 times as much—so they could find competent staff. Somebody had to collect the 26,000 surveys to document which villages needed what, then tabulate the forms and enter them into the database which was just created by young people who had just been trained on computers that had just been received and installed. Somebody had to arrange for uninterrupted power sources, a network server that could be counted upon and an air conditioner that didn’t overload the circuits. Somebody had to make sure water was available for the restrooms—when there were restrooms—when the pump stopped and no one else had water for hours.

Somebody had to hire someone to deal with the government agents charging a tax on relief supplies that nobody asked for and much of the time nobody needed or wanted. Somebody has to drive the van with someone else who speaks English to make sure the Americans who came 12,000 miles don’t feel lost, or slighted, when they arrive at the airport after midnight day after day after day.

This is not to diminish the labors of so many who gave the money and delivered the tents and installed the water tanks and built toilets and brought food and served the hundreds of thousands in the hot sun. Nor is it to discount the massive transportation of material supplies and the generosity that prompted millions of people around the world to collect their old clothes or give money.

It’s just that the mode of delivery counts, too. The machinery of international relief is not the same as the touch of a human being. There are dedications to be completed and commitments to fulfill. The mothers are squatting in the scorching sun outside their oven-hot tents with no windows, and babies are waiting. Elders are dazed. Fathers and young men, humbled by the waves and reduced to living in nobody’s house with nothing to do are looking for work or a semblance of dignity.

Something must be done, so it is. Sarvodaya does what it has done for 50 years. Dr. Ari comes to be with the people who are honored by his presence. He loves them and they love him back. It’s not like, say, the politicians or technocrats. You don’t just come, look, fix the problem and leave.

When you get to the site, say, of a new housing project, and you see that it takes less than 10 minutes for a crowd to gather because they are so eager to meet someone with an answer, or hope, or even the tiniest bit of realistic optimism about when those houses might be built…when you see those people yearning so faithfully and progressively less patiently with each passing day in the sun. When you hear them gratefully for the hundredth time look you in the eye and say without a word that they want to leave this place and go home…but there is no home to go to…you know that you can’t just send an envelope full of money, give it out and expect each family to hire a contractor to build a place for them. Even if you have the organization and the history to know who can do the job, you better be able to also know how much you can pay to whom without putting the local economy completely out of balance.

You have to understand that having A.T. Ariyaratne and local dignitaries who are real local leaders, not figureheads, say what they mean and say it honestly is not the same as waiting for the government or some unfamiliar organization to come…and go. You have to remember that Shramadana means sharing of labor, and that Sarvodaya has engaged more people sharing more labor in more places than all the big money can buy.

Then you won’t worry so much about overhead with the Sarvodaya Movement.

Sarvodaya Shramadana Movement for the People in Need.