This is an important argument and makes a lot of sense.
“I’d say there’s a decent number of highly effective charities with very valuable IP that are too leveraged on the output of very few staff members.”
I agree with this, apart from the word “too”. I’ve got no issue with a few talented people carrying an organisation—I think that’s just how both charity and business often work for a long long time. How much of Apple’s value was in Jobs and Wosniacki even after they were worth billions? How much of their current value is still a legacy of the style and philosophy they built?
This next statement though I think makes sense in theory and I agree to some extent. But I’ve seen the opposite happen most of the time.
“Increased cost effectiveness over time usually comes from investment in quality assets (I’d include staff costs as assets—for management accounting purposes not for external financial reporting purposes).”
I think this is more the case in the business world as incentives are unfortunately so cooked in the charity world that as organisations grow , it’s hard to avoid very poorly performing staff getting paid way too much and for too long. We need to invest in staff to grow an organisation, and it’s probably just the right thing to do by our fellow human, but unfortunately I’m not convinced it always makes us more cost effective. I would be interested to hear what examples your have of charities that you think have become clearly more cost effective through investing unusually heavily in staff? Although this might be an unfair question so it’s hard to separate that it out.
Often as well I’ve seen in my org in UgAnda, if I invest heavily in good staff (which we do) they are more likely to get a higher paying job in the NGO or government sector so often the investment doesn’t pay off for us. I’ve seen a number of cases too not in our org where super talented staff were funded for extra study which then directly enabled them to get a better paying job somewhere else. It’s complicated. In Western EA orgs where you might have the luxury of relying partly on value alignment this situation might be very different. There’s loyalty here but often more to to individual people than a value structure or org.
In my experience with NGOs, staff salaries and “investment” in staff usually end up increasing often to the detriment of the cost effectiveness of the org. Again I’m not saying it’s the wrong thing to do. Just observing.
This is an important argument and makes a lot of sense.
“I’d say there’s a decent number of highly effective charities with very valuable IP that are too leveraged on the output of very few staff members.”
I agree with this, apart from the word “too”. I’ve got no issue with a few talented people carrying an organisation—I think that’s just how both charity and business often work for a long long time. How much of Apple’s value was in Jobs and Wosniacki even after they were worth billions? How much of their current value is still a legacy of the style and philosophy they built?
This next statement though I think makes sense in theory and I agree to some extent. But I’ve seen the opposite happen most of the time.
“Increased cost effectiveness over time usually comes from investment in quality assets (I’d include staff costs as assets—for management accounting purposes not for external financial reporting purposes).”
I think this is more the case in the business world as incentives are unfortunately so cooked in the charity world that as organisations grow , it’s hard to avoid very poorly performing staff getting paid way too much and for too long. We need to invest in staff to grow an organisation, and it’s probably just the right thing to do by our fellow human, but unfortunately I’m not convinced it always makes us more cost effective. I would be interested to hear what examples your have of charities that you think have become clearly more cost effective through investing unusually heavily in staff? Although this might be an unfair question so it’s hard to separate that it out.
Often as well I’ve seen in my org in UgAnda, if I invest heavily in good staff (which we do) they are more likely to get a higher paying job in the NGO or government sector so often the investment doesn’t pay off for us. I’ve seen a number of cases too not in our org where super talented staff were funded for extra study which then directly enabled them to get a better paying job somewhere else. It’s complicated. In Western EA orgs where you might have the luxury of relying partly on value alignment this situation might be very different. There’s loyalty here but often more to to individual people than a value structure or org.
In my experience with NGOs, staff salaries and “investment” in staff usually end up increasing often to the detriment of the cost effectiveness of the org. Again I’m not saying it’s the wrong thing to do. Just observing.