10% deduction from gifts to sponsored children.

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Concerning the 10% deduction from gifts to cover admin. costs. Why? You already collect for each child sponsored. You already collect from Friends of Compassion. Now you are taking part of the money given as gifts to the children to fund overhead. Why the change? Why not increase the sponsoring fee by a dollar to cover the costs The gifts are suppose to be gifts not a source of funds for operations.
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Dan Holloway

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Posted 4 years ago

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Photo of Adam


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Hi Dan. It sounds like you may have already seen this, but Compassion has this note at the bottom of the Additional Giving page in our online accounts: "Compassion will utilize 10 percent of child, family and project gifts for the ministry’s administration and program delivery costs for those donations. Be assured that Compassion remains committed to stewarding your gifts with sound fiscal management, accountability and transparency with you — and always with the children as our first priority. Thank you for your generosity.”

I don't know exactly why Compassion decided to make this change or how Compassion plans to use the funds that this change frees up, I suppose I would not expect them to disclose that in detail, but I really did not agree with this change either at first. My thinking was that the gifts seem to be more personal in nature than the monthly support or donating to a fund, which I think is what you're saying as well. However, another way to think about it is that everything that you give to Compassion is a gift in one form or another to the children that Compassion serves. Substantially all of Compassion's revenue comes from donations. So the ten percent now being used to cover costs associated with the gifts just means that those costs do not have to be covered by the other donations that Compassion receives. What it comes down to for me is, do I believe that Compassion uses the funds they receive efficiently and effectively in keeping with their mission of releasing children from poverty in Jesus' name, and I do. So while the ten percent may not go to "my kids" directly, I know that it will ultimately be used to help children living in poverty and I'm thankful for that.

I believe that Compassion is expanding and I know that it requires funds to find new sponsors and to support a growing sponsor base and to create smart phone apps and faster, more efficient letter systems and things like that which many sponsors have come to expect. I'm glad, personally, that Compassion didn't raise the monthly support because I think they would have lost some sponsors and it would be harder for them to get new sponsors going forward if they had done that.
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I have visited a few of the countries that Compassion affiliates with. Whenever the children/family members go to spend the monetary gift, they MUST be accompanied by a paid employee of the church (accountant, director, etc.). We have been told by the individual churches, when they show their records, that the 10% is going to cover their expenses when they send one of their employees out with the families plus the documentation that goes along with this process - transportation, overtime wages, etc. Otherwise, the gifts are putting quite a burden on the church affiliates themselves. The 10% is not being sucked into the "large corporation vacuum" nor is it an extra fee that should be part of the sponsorship fee, since most people are never sending gifts.  We have to remember also, that there is fee for transferring the money across international boundaries, which we are not paying for, plus the extra documentation that Compassion is covering for these...
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Hi JanC. You know, I had not thought about the gifts being an expense to the local churches, but that makes sense and I guess the larger the gift the more expenses they would have to accommodate that gift. With things being done this way, everyone pulls their own weight, so to speak, with the gifts they are sending. Thanks for sharing this.
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I could understand the need for a 10% fee, after I gave it some thought. I'm sure it takes time to help the family decide on what is most needed and to purchase the items. I really appreciate the fact that I can give a gift and know that Compassion staff will carefully oversee how the money is spent. I feel that staff will make sure the gift is used wisely. That is very reassuring.

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Dan, thank you so much for your heart for children and for wanting what is best for them. JanC explained the 10% administrative fee on gifts beautifully. While our focus is the children and their well being, we also need to take care of our student center staff. Without them, we wouldn't have the student centers or programs for children! Adam is exactly right, we wouldn't want to pull that fee by increasing the monthly sponsorship rate because not all sponsors send gifts to their kiddos. Of course, you are certainly not expected to give a monetary gift if you do not feel that is best. What we really stress the importance of is letters and prayer! Thank you so much for being a blessing to Estefany and Jennifer! God bless you!

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