How many times have you had questions raised about what percentage of funds donated actually goes directly to the mission of the organisation? It is difficult to achieve and then maintain an appropriate balance between the expectations of donors of funds where they want every cent of every dollar donated to go to the mission of the organisation and having sufficient funds to be able to develop and maintain appropriate controls.
With demands from donors wanting all funds donated going to the mission, how does the organisation pay expenses, such as market rates of salary / wages to employees and having the resources to maintain controls.
If an employee is not paid at market rates and controls are not maintained appropriately, the risk of fraud will increase.
So what is the answer? It is not an easy question to answer considering the amount of media that is regularly given to the percentage of donated funds that are used for the organisation’s mission. Ultimately it is a longer term education process so that donors of funds understand that a reasonable percentage of funds are needed to administer the organisation.