VeAhavta Program and Non-Program Expenses

VeAhavta recognizes that every dollar spent on administrative costs is a dollar that will not help a child or elder in serious need. In a perfect world, 100% of every donation would go directly to support those children and elders, and this is certainly what donors would like to see happen. Veahavta shares that goal and does its best to reach it. To that end:

VeAhavta does not have paid staff. It owns no property, and spends no donor money on office furniture or rent. Instead, VeAhavta minimizes administrative costs by relying heavily on help from a core group of committed volunteers to do much of the administering of Grace Care Center and VeAhavta. VeAhavta does not provide bonuses or other financial recognition to those who work on its behalf. The compensation for VeAhavta volunteers is that the children and elders at Grace Care Center continue to have a home and a future.
The VeAhavta directors and officers receive no monetary compensation. However, each year one director or officer travels to Sri Lanka to assess Grace Care Center, and VeAhavta may pay the cost of airfare for that trip.
VeAhavta volunteers are responsible for their own expenses when they travel to Sri Lanka to assist in the operation of Grace Care Center. No cash that has been donated to VeAhavta is used for their travel expenses. However, those volunteers are entitled to a charitable contribution tax deduction for the amount they spend on travel, and that amount is then considered to be a donation to VeAhavta for tax purposes. Also, the volunteers receive meals and lodging at Grace Care Center.
VeAhavta keeps mailing costs to a minimum by using the postal service only to send tax receipts for donations, to enable communication between Grace Care Center residents and donors, and very rarely on other occasions.
VeAhavta does not spend money on “gifts” for donors. Items such as T-shirts or mugs are sometimes donated to VeAhavta. When that happens, the items are used to provide recognition for donations.

Through these strategies, in most years VeAhavta has succeeded in keeping administrative costs very low. More than 87% of every dollar donated to VeAhavta in 2008 was used to pay for the programs at Grace Care Center in Sri Lanka, except for donations which were specifically designated by the donor to be used solely for VeAhavta's administrative expenses (see footnotes 2 and 3, below). We anticipate that the percentages for 2009 and 2010 will be comparable.

Summary of VeAhavta Non-Program vs. Program Expenses 2001-2008¹

2001

Non-Program Expense	Gross Amount	Amt. Donated by Dirs. For Admin. Expenses³	Net Non-Program Expenses
Payroll Expenses	–	–	–
Other Expenses	$548	–	$548
Total	$548	–	$548

		% of Total Net Expenses	% of Total Net Donations⁶
Program Expenses for 2001	$36,169	99%	99%
Total Net Non-Program Expenses for 2001	$548	1%	1%
Total Net Expenses	$36,717	100%	100%

2002

Non-Program Expense	Gross Amount	Amt. Donated by Dirs. For Admin. Expenses³	Net Non-Program Expenses
Payroll Expenses	–	–	–
Other Expenses	$16,068	–	$16,068
Total	$16,068	–	$16,068

		% of Total Net Expenses	% of Total Net Donations⁶
Program Expenses for 2002	$284,718	95%	148%
Total Net Non-Program Expenses for 2002	$16,068	5%	8%
Total Net Expenses	$300,786	100%	156%

2003

Non-Program Expense	Gross Amount	Amt. Donated by Dirs. For Admin. Expenses³	Net Non-Program Expenses
Payroll Expenses	–	–	–
Other Expenses	$672	–	$672
Total	$672	–	$672

		% of Total Net Expenses	% of Total Net Donations⁶
Program Expenses for 2003	$82,307	99%	47%
Total Net Non-Program Expenses for 2003	$672	<1%	<1%
Total Net Expenses	$82,979	100%	48%

2004

Non-Program Expense	Gross Amount	Amt. Donated by Dirs. For Admin. Expenses³	Net Non-Program Expenses
Payroll Expenses		–	–
Other Expenses	$1,632	–	$1,632
Total	$1,632	–	$1,632

		% of Total Net Expenses	% of Total Net Donations⁶
Program Expenses for 2004	$245,952	>99%	89%
Total Net Non-Program Expenses for 2004	$1,632	<1%	<1%
Total Net Expenses	$247,584	100%	90%

2005

Non-Program Expense	Gross Amount	Amt. Donated by Dirs. For Admin. Expenses³	Net Non-Program Expenses
Payroll Expenses	$46,954	$46,000	$954
Other Expenses	$8,932	–	$8,932
Total	$55,886	$46,000	$9,886

		% of Total Net Expenses	% of Total Net Donations⁶
Program Expenses for 2005	$439,001	98%	80%
Total Net Non-Program Expenses for 2005	$9,886	2%	2%
Total Net Expenses	$448,887	100%	90%

2006

Non-Program Expense	Gross Amount	Amt. Donated by Dirs. For Admin. Expenses³	Net Non-Program Expenses
Payroll Expenses	$81,506²	$67,640	$13,866
Other Admin Expenses	–	–	$13,124
Total	$94,630	($67,640)	$26,990

–	–	% of Total Net Expenses	% of Total Net Donations⁶
Total Program Expenses for 2006	$170,459⁵	86.3%	108%
Total Net Non-Program Expenses for 2006	$26,990	13.6%	17%
Total Net Expenses	$197,449	–	125%

2007

Non-Program Expense	Gross Amount	Amt. Donated by Dirs. For Admin. Expenses³	Net Non-Program Expenses
Payroll Expenses	$100,895²	$54,520	$46,375
Other Expenses	$13,490	–	$13,490
Total	$114,385	($54,520)	$59,865

–	–	% of Total Net Expenses	% of Total Net Donations⁶
Program Expenses for 2007	$153,366⁵	71.9%	93%
Total Net Non-Program Expenses for 2007	$59,865	28.0%⁴	36%
Total Net Expenses	$213,231	–	130%

2008

Non-Program Expense	Amount	Amt. Donated by Dirs. For Admin. Expenses³	Net Non-Program Expenses
Payroll Expenses	$16,586	$16,800	$ (214)
Other Expenses	$13,416	–	$13,416
Total	$30,002	($16,800)	$13,202

–	–	% of Total Net Expenses	% of Total Net Donations⁶
Program Expenses for 2008	$93,615	87.5%	112%
Total Net Non-Program Expenses for 2008	$13,202	12.5%	16%
Total Net Expenses	$106,817	–	128%

Footnotes:

“Program expenses” are the amounts used for the operation of Grace Care Center, which pay for housing, food, education, caregivers, medical care, and all other expenses associated with directly caring for the children and elders. “Non-program expenses” are the funds spent on the administration of VeAhavta in the United States, including fundraising and recordkeeping. “Net non-program expenses” are the funds spent to administer VeAhavta for that year, less any amounts donated by the directors of VeAhavta specifically for administrative expenses (see Footnote 3). In other words, “net” non-program expenses are the administrative expenses that were paid for by donors other than the directors of VeAhavta.
The payroll expenses for the last half of 2005, 2006, 2007, and the first part of 2008, were for the salary of the president of VeAhavta, which he received to enable him to devote full time to administering Grace Care Center. That ceased in February, 2008, and Veahavta does not anticipate this expense in the future.
During the period when the president of VeAhavta received a salary, referred to in the preceding footnote, two directors of VeAhavta agreed to pay the majority of that salary in order that the salary would take as little as possible from the money donated by the general public to support the programs at Grace Care Center.
The percentage of donations used for administrative expenses was higher in 2007 than in other years because 1) the president drew a salary for the full year, and 2) at the same time the directors who provided the majority of the support for administrative expenses reduced somewhat the contributions they made for that purpose. The experience of 2007 demonstrated that it is not cost-effective for VeAhavta to have a paid CEO. For that reason the president stopped receiving a salary, and again became a volunteer, as of February 1, 2008. As noted in footnote 2 above, VeAhavta does not anticipate paying any officer salaries for the foreseeable future.
Although the costs of providing care to the orphans and elders have risen significantly in Sri Lanka since 2004, donations to VeAhavta have decreased after the sense of urgency created by the 2004 tsunami passed. As a result, each year since 2005 VeAhavta has had fewer resources to use for the Grace Care Center program expenses than it had the preceding year. VeAhavta has been meeting that challenge by admitting fewer orphans; suspending the mobile medical clinic, women’s empowerment program, and fishermen’s boat replacement program; and delaying needed maintenance on the Grace Care Center facilities.
“Total Net Donations” are all donations for that year, less any amounts contributed by the directors for the express purpose of paying the president’s salary. The percentages in the Total Net Donations column usually do not equal 100%, because the total amount spent in that year was either greater than, or less than, the total amount donated in that year. Although the total of this column might not add up to 100 %, the figures are included to give an idea of the ratio of the administrative expenses to the net donations in that year.