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» » Key Components of Our Expenses |
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Key Components of Our Expenses
Our actual and budgeted expenditure for the year ended 30 June 2009 shows that the expenses of SVA average around $400,000 per month, equating to around $4.8 million per annum.
On average, SVA has approximately three to four months of working capital in the bank (between $1 - $1.5 million). This is a ‘tight’ situation compared to the commercial world although quite usual for a non-profit organisation. That said, in time we would like to see this increase to a minimum of six months working capital in the bank.
Apart from our working capital in the bank mentioned above and contributions received into the SVA Capital Fund, SVA does not generate excess reserves. This means all donations received are fully used to fund the ongoing work of SVA.
The key components of our expenses and the approximate proportion of each are as follows:
| Staff and consultants (refer to next section for more information) | 72% | | Rent and office costs | 13% | | Travel and accommodation | 6% | | Marketing and communications | 9%
| | The above excludes direct expenses incurred from fundraising events as these are covered by the income received. |
From a management perspective, we allocate all our expenses into one or more of four groups to help responsibly manage the finances of SVA:
- Venture Development - being that part of SVA that looks after the ventures that we partner with. The 20 per cent fee that SVA derives from donations to the Venture Fund fully covers the cost of this aspect of our operations.
- The Incubator - being that part of SVA that incubates new ideas and assists early stage social entrepreneurs. The donations allocated to this area will cover the majority of its costs.
- Professional Services - being that part of SVA that works on designing and delivering practical educational tools, providing consulting services, conducting fresh research on specific issues, and undertaking special projects to enhance skills and knowledge in the social sector. The donations allocated to the Research & Development Fund together with fees received from mentoring programs and consulting services fully cover the cost of this aspect of our operations.
- Support Services - being that part of SVA that looks after fund raising, finance and compliance, marketing and communications, investment management, information technology, human resources and office administration. Our aim is that, in time, the donations allocated to the SVA Fund from stable ‘annuity-type’ income (such as investment earnings from the SVA Capital Fund) will fully cover the cost of this aspect of our operations.
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