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Author Topic: Attrition Buffer  (Read 11518 times)
Dan
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« on: October 19, 2009, 10:27:16 am »

I have a friend who is joining GCM and I am considering supporting her.

When raising money, I noticed she has to gather something called an "attrition buffer."  I am curious about what that is.  Is that a legitimate expense?  Where does the balance of the buffer go if it is not used?

I thought you might have some insight into this.  I want to make sure they are legitimate financially, whatever shortcomings they might have ideologically.

Thank you,

Dan
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puff of purple smoke
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« Reply #1 on: October 19, 2009, 05:16:03 pm »

I'm guessing it would be the amount of money they deem they need in order to hire another GCM employee should she quit. Which is odd because you raise your own funds.. Perhaps randomous could enlighten us.
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randomous
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« Reply #2 on: October 21, 2009, 03:54:17 am »

Sure.  It's actually quite a bit simpler than that.  The attrition buffer is basically 10% added on to account for the fact that some people in a given month won't actually give.  For example, I may say I'm going to give monthly, but things come up and on average I only give 10 or 11 months a year.  Or, hard times may come and certain people stop giving at all.  It's attrition of donors, not staffers. 
Since there is a concrete number needed to pay a specific salary and other expenses, the buffer helps.  It's not an expense really, just a factor in determining a realistic goal of what they practically need to have committed each month in order to operate. 
All donations raised by a GCM staff member go to a specific fund for their ministry.  If x comes in, and only 90% of that amount is needed to pay that month's expenses, the extra goes to unpaid expenses from previous months first and if those are already taken care of it sits in that account for future expenses related to that ministry.  Staff are paid a specific amount.  Pretty standard within the support-raising mission orgs community.  Although, some groups like Wycliffe do actually just turn it all over to the missionary, to a certain extent. 
BTW, I'm sure Dan's friend probably could have answered this if asked directly.  As far as financial legitimacy, GCM's part of the ECFA (Evangelical Council for Financial Accountability) and is regularly audited by independent auditors.  I don't know of anyone ever having a problem with their financial integrity, whatever other issues they may have.  I'm actually working on a master's in Public Administration, so if you have any further administrative questions I'd be glad to answer.
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Dan
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« Reply #3 on: October 21, 2009, 08:33:48 am »

Thanks, that actually makes a lot of sense.  I did ask them directly and they said they weren't sure so I said I'd look into it.

I appreciate the research.

Dan
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