When glancing at the facts it is not difficult to notice that non-profits suffer greatly in contemporary society, being limited by two main factors: Capital, and Saturation. One issue leads to the other, with the over-saturation of non profits leading to a decreasing amount of funds per foundation and the motivation for investors being decreased year after year by their inefficiency which is in of itself brought on by a wish to minimise expenses, drain capital from the organisation and cut costs as to appease donors. As stated in an article by the NANOE titled “Non-Profits Fail, here’s seven reasons why” Tracy Ebarb writes:
_ “There are currently over 1.5 million tax exempt non profits in the US. In Texas alone, there are about 106,000 non profits, about 1 for every 4000 people. In recent years the “overhead problem” has begun to be addressed. The irony is that we did this to ourselves in the first place. Instead of clearly communicating WHY an organisation needed money to be invested in overhead, virtually all nonprofits educated donors that money spent on overhead was bad! We created that story by showcasing that operating on a shoe string budget was a badge of honour. However, when we do that we are actually perpetuating and encouraging a ‘race to the bottom’ mentality where success is measured by how little we spend, not by the impact we have.”_
What is the “overhead problem” and why is the constant minimisation of quality services a trend throughout the vast majority of non-profits?
Overhead is the amount of capital necessary to maintain a business but that does not directly contribute to the making of a product. In the case of a non-profit these are the expenses of: advertising, setting up booths, labour costs (security, organisers, movers), travel costs for staff members to name a few. The size of an overhead cost can, in the case of non-profit, make donators doubtful of it making its money back.
Par example: If an organisation were to have high overhead costs for the advertising of itself and its cause, hiring movers, setting up booths, printing pamphlets and renting spaces this can have the effect that any donators are doubtful that the organisation itself can get the traffic that it requires to stay solvent and operational and thus we find that the majority of non-profits attempt to get donations by minimising and cutting back on overhead costs. This impacts the event in the manner that it is not as well organised or advertised meaning that it will have a lesser pool of potential participants and will end up making less money and in turn impact its environment less successfully. The shrinking of overhead costs has then forced these organisations to hire less, and function as a time bomb that has lower the efficacy and promise of these organisation in order to appease investment. This sorry state of affairs has led to a forced overhaul of functional infrastructure and forced non-profits to dedicate the majority of their budget to rebuilding a system of accountability that was taken from them, drastically unbalancing the ratio of overhead costs to Operational Expenses . It is a cycle of forced inefficiency. 1 This web of futility was best explained in a 2019 article by Non-Profit Quarterly “Why Funding Overhead Is Not the Real Issue: The Case to Cover Full Costs”:
“Many foundation leaders now understand that overhead is part of the real, necessary costs of delivering quality programs. Funders large and small have shifted grant strategies to fund overhead. In 2013, Charity Navigator, GuideStar, and the BBB Wise Giving Alliance spoke out against the myth that overhead spending is a meaningful way to evaluate nonprofit performance.1 Even the federal government, at the end of 2014, began requiring federal grants to cover nonprofit overhead costs…Nonprofits spend far too many resources attempting to report their functional expenses honestly. Costly time studies and complicated time sheets are used to determine how many hours each staff member spends on programs. Organizations build and maintain complicated accounting structures so every expense can be reported by function. A simple phone bill is recorded in the books as a lengthy journal entry of functional allocations, with back-up detail for the auditor to test at the end of the year. To what end? The reporting of functional expenses exacerbates the myth that, somehow, nonprofits should be able to operate programs without an administrative structure to manage, measure, and execute. It implies that, by some as-yet-unknown magic, nonprofits should be able to achieve their mission without dedicated and systematic fundraising efforts to pay for it. The attempt to segregate interwoven and complementary expenses according to the function they serve is an exercise in futility. The truth is, all resources spent by a nonprofit are spent in order to successfully deliver on programs (with obvious exceptions made in cases of fraud). Certainly, not all spending in a nonprofit is efficient; but functional expenses tell us nothing about efficiency. By abandoning overhead, we free up limited nonprofit capacity to focus on more important measures. With the coming sector-wide shift toward outcomes-based measurement, this capacity is needed now more than ever.”
The relationship between the efficiency of a venture and its overhead costs is undeniable, and it is the opposite of how it is usually observed, and the investment put forth into overhead costs guarantees a greater potential interest and pool of donations to the organisation than they could reach with a constrained budget. At this point the following must be brought to the light: the question of Overhead Capital and tangible success. Overhead expenses are divided into two main groups as defined in “Instructions for Form 990 Return of Organisation Exempt From Income Tax” by the IRS and summarised in an article by the National council of Non-Profits:
“Management & General plus Fundraising make up overhead costs. Program Costs: The costs incurred in connection with a specific program or activity of the organization. These are the costs often referred to as direct costs. Some nonprofits have only one program, others many. Fundraising Costs: Costs that involve seeking, soliciting, or securing charitable contributions. Examples: development staff, the fees paid to a fundraising consulting firm, and the fees paid to register the charitable nonprofit for solicitation purposes. Management and General Costs: All the other costs that are needed to operate the organisation and are shared across programs.”
The cost and expansiveness of Overhead expenses is a direct observation of how successful the operation with be, with the scope of one determining the outreach of the latter, with the tangible results being evident, the raising and maintaining of capital through budgeting is the most essential step, as the providing of overhead investment surmounts the issues that are to be explained in the following section: Saturation. Having now dissected the problem of capital and the use of capital in non-profits it is necessary to understand the saturation of non-profits and the fundraising thereof. The saturation of non-profits is an evident trend that first began to be readily observed in the 1990s, with the drastic increase of these organisations being noted in a short article by the Stanford Social Innovation Review:
“The latest figures from Independent Sector show that the number of public charities registered with the IRS rose from 546,000 to 964,000 between 1992 and 2003, a 75% increase in a 20 year period.”
This over saturation of non-profits has led to a large amount of underfunded and overlapping organisations that have saturated their local areas and devalued the emphasis of a cause and thus it is observable that saturation is a consequence of unimaginative superfluous capital that leads to a shortage of capital for real issues, and is what led us to make Civy.
What it does
Civy is a software suite designed to aid nonprofits in various ways. Our features are as follows: Budget The budget tab is where you can set your monthly budget and how it compares to your expenses spent during the month. Expenses In our expenses tab, you can add an expense that your company has incurred. An example of this could be paying employees. You can see all the expenses that have incurred throughout the month. Insights Insights is where you can look at your budget flow over long periods of time, and also see how you are going to do in the future. We do this by using a linear regression model we trained ourselves to compare the data to certain stocks in the market in order to predict how your company will progress. Tasks Users may also add and remove tasks as they complete them. You can also add as many tags as you want to all your tasks. This keeps users organized in an easy, user-friendly way.
How we built it
Website We built the website using react.js. Mobile app We built the mobile app using Flutter, a cross-platform framework. ML server We didn't want to simply import a linear regression model from scikit-learn, so we decided to train our on. To go about this, we first had to figure out where our data we would be training on would be coming from. We decided that we would get data from the stock market from five categories - Social good, education, human services, health, and the environment. Once we had our dataset, we had to design our model architecture.
We then figured that we would need a previous budget history and the data the user was trying to predict in order to return plot points. So, we created a simple Flask application that had one POST route that would take in the budget history, the month, and the category to predict how the company would progress.
Once we finished training the model, we had to deploy it to the Flask app. We created a digital ocean droplet and used SSH and SCP to communicate with the virtual server.
Challenges we ran into
We first tried to deploy the Flask app to a Heroku endpoint but there were several constraints including the disk size so we moved to Digital Ocean.
The animations of the mobile app were really slow at first, but we were able to optimize them to a point where they felt completely smooth and had no performance impacts. We faced this same issue while animating the background of the website.
Accomplishments that we're proud of
The design of both dashboards (website and mobile) has a very clean UI. The animations created from scratch provide a great user experience. Additionally, we're proud that we decided to go down a harder path by creating our own linear regression model, and ultimately, it paid off.
What we learned
We learned a lot about what works and what doesn't when it comes to making visually appealing user interfaces.
What's next for Civy
We have many ideas planned for Civy. One is the capability to link your account with a registered company by uploading the articles of the organization. This way, your account will be liked officially with your company. Another feature we have planned is push notifications and setting deadlines for tasks. Finally, we plan to add the ability to share your company with other users so that your colleagues will have access to the dashboard as well.