What exactly does CEA shared services do? Why does it double?
Was it previously included in the 80k, etc budgets?
Looking at the prospectus, I’m also confused why GPP’s budget is roughly 95k but then you’re trying to raise much more than that (more than 12 months reserves would imply?) But maybe that will be answered when their fundraiser is put up?
GPP’s total budget for 2016 will be roughly £220,000 which is roughly what our minimum target is. The reason there’s a discrepancy between this figure and the £95k figure is that the £95k figure presented in the overall CEA budget includes only sums that flow through CEA and doesn’t include any shared services. However, GPP is a joint project with FHI, so in 2016 a significant portion of the total costs will be funded via FHI rather than CEA. In addition, we are expecting to hire a seconded civil servant whose salary will be partly funded by the state. This is not counted as part of the CEA budget but is counted as part of the GPP budget.
CEA shared services are the parts of CEA that are not linked to just one specific organisation. This includes parts that are funded straight from org contributions and parts that we are trying to fundraise for separately. Not quite exhaustively the part funded straight from org contributions includes office costs, legal, finance, HR, and my salary. The part funded from unrestricted donations will be more discretionary projects that we think are likely to benefit CEA as a whole in the longer term. This will include hiring a marketing expert, EA strategy researcher and potentially a fundraising expert (though we did not end up hiring for that position this winter).
The shared services budget is going up quite a lot partly because it has been held artificially low (we haven’t had enough capacity and had large amounts of volunteer or intern work), partly because we’re expanding to the US and partly because we’ll offer the orgs new services like full-stack marketing help. It’s staying roughly constant as a proportion of total expenditure. There are some downward pressures. For example, Tara has secured a pro bono deal where we can outsource our accounting for free once we upgrade to a more sophisticated platform.
I’m sorry, it was confusing to split out shared services here when we normally show all the costs distributed to the orgs. In the future, when not all of the shared services budget will come through the orgs, the new layout of the information is likely to make more sense.
Ping. I also have ongoing confusion here because in some places this is referred to as ‘shared services’ and in some places as ‘CEA unrestricted’. These sound like very different things! Is this something that existed in previous years (and wasn’t fundraising for what reason exactly?), and if not what’s changed?
You’re quite right, they are different. At the moment, we are planning to use marginal unrestricted funds to invest in shared services. Partly this aims to increase the autonomy of the shared services function and reduce the extent they feel they need to ask for permission to all the orgs to do useful things.
Past that level though, unrestricted funding would help us build a small reserve of unrestricted money that would provide us with financial stability. Right now, each organisation needs to keep a pretty significant independent runway because virtually all our reserves are restricted. If we had a bigger pool of funds that could go to any org, we could get the same level of financial security with smaller total reserves.
I’m not following the second paragraph. CEA has an overall budget and the general theme I’ve heard w.r.t. reserves has been ‘we want to have about 12 months’ reserves’. 12 months reserves is the same number whether the org budgets are consolidated or split out.
Is the thinking that with a large pool of unrestricted funding CEA as a whole would be comfortable running with significantly less, say 6 months reserves (which would still be more than 12 months for any individual org)?
At the moment most of the orgs within CEA target 12 months reserves (though some have less and, in particular, they sometimes fall quite low at some point in the course of the year because we avoid on-going fundraising).
If we had something like 3 months of reserves for all costs unrestricted it would give us either greater financial security or the ability to cut the size of restricted overall reserves to, say, 7 months while keeping similar stability. This would free up EA capital for other projects.
It’s a little unclear what the right level of reserves ought to be. In the US it’s common for charities to have very large endowments (say 20 years). I think the 12 months at all times target we have right now is about appropriate, given the value of capital to EA projects, but would expect that number to drift upwards as the EA community matures.
“If we had something like 3 months of reserves for all costs unrestricted it would give us either greater financial security or the ability to cut the size of restricted overall reserves to, say, 7 months while keeping similar stability.”
This is super-useful to know and directly answers my question, thanks.
You mentioned above that the current plan is to use unrestricted funding on some discretionary shared services projects, rather than e.g. directly helping out the individual orgs Does this reflect a belief that this are the current highest-marginal-value activities are in shared services, or do you have some other reason for this allocation?
What exactly does CEA shared services do? Why does it double? Was it previously included in the 80k, etc budgets?
Looking at the prospectus, I’m also confused why GPP’s budget is roughly 95k but then you’re trying to raise much more than that (more than 12 months reserves would imply?) But maybe that will be answered when their fundraiser is put up?
GPP’s total budget for 2016 will be roughly £220,000 which is roughly what our minimum target is. The reason there’s a discrepancy between this figure and the £95k figure is that the £95k figure presented in the overall CEA budget includes only sums that flow through CEA and doesn’t include any shared services. However, GPP is a joint project with FHI, so in 2016 a significant portion of the total costs will be funded via FHI rather than CEA. In addition, we are expecting to hire a seconded civil servant whose salary will be partly funded by the state. This is not counted as part of the CEA budget but is counted as part of the GPP budget.
You can find lots more detail on GPP here
CEA shared services are the parts of CEA that are not linked to just one specific organisation. This includes parts that are funded straight from org contributions and parts that we are trying to fundraise for separately. Not quite exhaustively the part funded straight from org contributions includes office costs, legal, finance, HR, and my salary. The part funded from unrestricted donations will be more discretionary projects that we think are likely to benefit CEA as a whole in the longer term. This will include hiring a marketing expert, EA strategy researcher and potentially a fundraising expert (though we did not end up hiring for that position this winter).
The shared services budget is going up quite a lot partly because it has been held artificially low (we haven’t had enough capacity and had large amounts of volunteer or intern work), partly because we’re expanding to the US and partly because we’ll offer the orgs new services like full-stack marketing help. It’s staying roughly constant as a proportion of total expenditure. There are some downward pressures. For example, Tara has secured a pro bono deal where we can outsource our accounting for free once we upgrade to a more sophisticated platform.
I’m sorry, it was confusing to split out shared services here when we normally show all the costs distributed to the orgs. In the future, when not all of the shared services budget will come through the orgs, the new layout of the information is likely to make more sense.
Ping. I also have ongoing confusion here because in some places this is referred to as ‘shared services’ and in some places as ‘CEA unrestricted’. These sound like very different things! Is this something that existed in previous years (and wasn’t fundraising for what reason exactly?), and if not what’s changed?
You’re quite right, they are different. At the moment, we are planning to use marginal unrestricted funds to invest in shared services. Partly this aims to increase the autonomy of the shared services function and reduce the extent they feel they need to ask for permission to all the orgs to do useful things.
Past that level though, unrestricted funding would help us build a small reserve of unrestricted money that would provide us with financial stability. Right now, each organisation needs to keep a pretty significant independent runway because virtually all our reserves are restricted. If we had a bigger pool of funds that could go to any org, we could get the same level of financial security with smaller total reserves.
I’m not following the second paragraph. CEA has an overall budget and the general theme I’ve heard w.r.t. reserves has been ‘we want to have about 12 months’ reserves’. 12 months reserves is the same number whether the org budgets are consolidated or split out.
Is the thinking that with a large pool of unrestricted funding CEA as a whole would be comfortable running with significantly less, say 6 months reserves (which would still be more than 12 months for any individual org)?
At the moment most of the orgs within CEA target 12 months reserves (though some have less and, in particular, they sometimes fall quite low at some point in the course of the year because we avoid on-going fundraising).
If we had something like 3 months of reserves for all costs unrestricted it would give us either greater financial security or the ability to cut the size of restricted overall reserves to, say, 7 months while keeping similar stability. This would free up EA capital for other projects.
It’s a little unclear what the right level of reserves ought to be. In the US it’s common for charities to have very large endowments (say 20 years). I think the 12 months at all times target we have right now is about appropriate, given the value of capital to EA projects, but would expect that number to drift upwards as the EA community matures.
“If we had something like 3 months of reserves for all costs unrestricted it would give us either greater financial security or the ability to cut the size of restricted overall reserves to, say, 7 months while keeping similar stability.”
This is super-useful to know and directly answers my question, thanks.
You mentioned above that the current plan is to use unrestricted funding on some discretionary shared services projects, rather than e.g. directly helping out the individual orgs Does this reflect a belief that this are the current highest-marginal-value activities are in shared services, or do you have some other reason for this allocation?