Methodology

iDonate relies on public information and gives an open, fair and objective view. The public information used are mainly annual reports of charities downloaded from their websites, and audited financial reports purchased from ICRIS. We calculate the fund raising efficiency, the proportion of fund raising expense, program expense, salary and administrative expense to annual expenditure. We also estimate the need of funds by annual surplus or deficit, and value of liquidated assets.

Even though we have separate assessments for operation efficiency and fund needs, we recommend users to combine two measurements and take them as a reference. We encourage users to spend time on understanding the rationale of the assessments, and the possible bias when interpreting the message behind the ratings. In addition, users may gather more information about the charities from other sources in order to donate confidently.

Please note that measurement of fund needs could be biased in some cases, because

1. low working capital may be due to (a) less realizable assets including cash, short term investment and long term investment, or (b) high expenditure of the year. If there would be (b) case, users need to take a closer look in the details of expenditure to understand the efficiency. High expenditure may not lead to high efficiency. If the majority of expenditures was administrative costs, charities may not be able to use the donations effectively on charitable projects. Therefore, users need to take a detail look on expenditures.

2. Surplus to donation ratio only measures the current year surplus to public donation received during the year. A result of high ratio could be due to detailed plan commencement of charitable projects in the following year. It does not necessarily represent no good use of donation. Low surplus is related expenditure. Therefore, users may also look into details of expenditures and understand the administrative cost and project expense proportion.

Following is the details of the methodology.

Part I: operational efficiency

Part II: Fund Needs

the highest rating,'---' the lowest rating。This part measure the fund-raising efficiency, and the ratio of fund-raising expenses, charitable project expense, staff salaries, and administrative costs to total expenditure. Each measure has a 10 points scoring system. The total score will give the final rating of operation efficiency.

fund-raising efficiency

(To measure the cost of generating every HK$100 charitable contribution. The lower the fundraising cost, the higher the score. The higher the fundraising cost, the lower the score.)

Score Cost of raising $100
02.5
5
7.5
10
<K$10.0
02.5
5
7.5
10
HK$10.1 – HK$20
02.5
5
7.5
10
HK$20.1 – HK$35.0
02.5
5
7.5
10
HK$35.1 – HK$100.0
02.5
5
7.5
10
>HK$100.0

Fund-raising expense

(To measure the ratio of fundraising expenses to total expenditure. The lower the ratio, the higher the score. )

ScoreFund-raising expense
02.5
5
7.5
10
0% - 10%
02.5
5
7.5
10
11% - 15%
02.5
5
7.5
10
16% - 20%
02.5
5
7.5
10
21% - 25%
02.5
5
7.5
10
>25%

Project expense

(o measure the charity project expense to the total expenditure. The higher the ratio, the higher the score. )

ScoreProject expense
02.5
5
7.5
10
>85%
02.5
5
7.5
10
70% – 84%
02.5
5
7.5
10
50% – 69%
02.5
5
7.5
10
35% – 49%
02.5
5
7.5
10
<35%

Salaries

(To measure the ratio of staff salaries to the total expenditure. The lower the ratio, the higher the score.)

ScoreSalaries
02.5
5
7.5
10
0% - 15%
02.5
5
7.5
10
16% - 20%
02.5
5
7.5
10
21% - 25%
02.5
5
7.5
10
25% - 30%
02.5
5
7.5
10
>30%

Administrative expense

(To measure the ratio of administrative expenses to total expenditure. The lower the ratio, the higher the score.)

ScoreAdministrative expenses
02.5
5
7.5
10
0% - 15%
02.5
5
7.5
10
16% - 20%
02.5
5
7.5
10
21% - 25%
02.5
5
7.5
10
26% - 30%
02.5
5
7.5
10
>30%

Ratings

(Added up the scores of the above and derive the rating of a charity operation efficiency.)

Very high operating efficiency>= 37.5
High operational efficiency32.5 – 37.4
Fair operating efficiency 25.0 – 32.4
Low operational efficiency20 – 24.9
-Very low operational efficiency <20
Part 2: Fund Needs >>