Plan Australia
Money Matters
- How much of the money from donors reaches the children?
- Who coordinates this and makes sure it happens?
- How does the money reach the children?
- How does Plan ensure that these projects and services are delivered
- Why does Plan quote global averages for the way it allocates funds?
- Do the children actually receive money in their hands?
- Won't the benefits the children receive vary because of exchange rate variations?
- Why does Plan pool the money first before distributing it to projects?
- If the funds are pooled, is it still possible to see how money from any one National Office is used?
- How is the amount spent in each field location determined?
- Plan raises funds in 17 National Offices, does the ratio of what is available for programs vary from one country to another?
- I've heard that a lot of aid funds are diverted through corruption in overseas countries. How can I be sure that this doesn't happen at Plan?
- How can I check that what has been stated is true?
- How can I be sure that the annual reports are accurate?
Questions and Answers in Full...
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How much of the money from donors reaches the children?
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Plan is committed to spending 80% of all donations given globally, on programs that benefit children. The remaining 20% of funds are used to communicate with our current sponsors and donors, fundraise for special projects or emergency appeals, and to find more sponsors to continue Plan's work. -
Who coordinates this and makes sure it happens?
Money comes from the 17 fundraising offices of Plan (National Offices) around the world and is distributed to the 49 program offices (Country Offices). Plan International (based in the UK) coordinates all of this and ensures it is achieved efficiently, effectively and equitably. Plan Australia plays its role as a fundraising office and coordinates its program contributions through Plan International.
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How does the money reach the children?
The money reaches children in the form of projects and services across 5 development domains namely:
Growing up healthy: e.g. Vaccination programs; training community health workers; building and equipping health clinics.
Learning: e.g. Teacher training; building and equipping classrooms; adult education.
Habitat: e.g. Building wells; building latrines; housing improvements; training communities in planning and managing projects.
Livelihood: e.g. Providing credit facilities; grain production improvement; job skills training; microfinance services.
Building relationships: e.g. Organising both in the Country Office and at National Offices, communication between sponsors and sponsored children; translating letters; photos; reports for sponsors and cross cultural materials.
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How does Plan ensure that these projects and services are delivered
To ensure that these projects and services are delivered in a way that is professional and accountable Plan also commits funds from the 80% to:
Program Support: e.g. Management and technical support of projects (this may come from the Country Office, External consultants or another Plan Office); vehicles for visiting projects; computers systems for tracking project results.
Field Management & Administration: e.g. Rent of offices; office equipment and supplies; accounting staff and systems; audit staff and services; secretaries; guards; telephone and fax costs; couriers; staff training.
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Why does Plan quote global averages for the way it allocates funds?
Plan quotes global averages for the way it allocates funds, as this is the best way of showing the complete picture. The true test of how funds are used is not where they are geographically expended but the purpose for which they have been spent. Plan believes in showing fund allocation transparently across the whole international organisation. Figure 1 below, illustrates Plan's allocation of funds globally. The yellow (light) area of the diagram represents the 80% of funds that are used globally to support development projects that benefit children. The blue (dark) area represents the 20% of funds that are used globally for communicating with sponsors, fundraising for special projects or finding new sponsors to continue Plan's work. Any true benchmarking of Plan against other aid organisations should be done against their global financial performance not just against domestic figures.
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Do the children actually receive money in their hands?
Plan aims to empower children, their families and whole communities to build a sustainable future where the children can realise their full potential. Plan does not give direct monetary handouts to children. This creates a dependency mindset and is contrary to best community development practice.
Some children may receive direct benefits such as school bags, books and in some cases school fees. These vary however from project to project and cannot be guaranteed per child as it depends on what is appropriate in each development situation. The practice of Plan is to ensure that all children in the project area benefit appropriately and not just the individual children who are sponsored. Sponsored children are like ambassadors for all the children in the community, and Plan working with the community ensures that all the children benefit.
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Won't the benefits the children receive vary because of exchange rate variations?
Plan works to ensure that all the children benefit in a way that is equitable. It is true that the value of donations given in Australian dollars will vary on a daily basis depending on the exchange rate. This is one of the reasons why Plan coordinates its work around the world through its International Office. Losses from some currencies can be offset by gains from other currencies. By pooling the resources Plan can smooth out these variations and ensure that a regular and equitable level of funds is delivered to projects regardless of currency fluctuations.
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Why does Plan pool the money first before distributing it to projects?
Plan does pool funds at its International headquarters prior to distribution to projects. There are many important and valid reasons for pooling funds. Some of these are:
Smoothing out currency variations
Cost efficiencies through fewer bank transfers and thus lower bank charges
Better exchange rates by converting larger sums at a time
Lowering risk by implementing a just in time transfer to the Field. Bank balances in the field can be at risk from exchange rate devaluation and sometimes from banks going bankrupt
Projects don't need all their funds at once and provide forward plans of when they will need to draw down.
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If the funds are pooled, is it still possible to see how money from any one National Office is used?
Yes. Even with pooling, it is still possible to trace money going from one National Office to a Country Office and its field programs. Plan knows the proportion of funds provided from each National Office and can track that proportion across all of its program expenditure and into any designated project.
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How is the amount spent in each field location determined?
Plan aims to ensure that all communities benefit equitably. This does not mean however that the money spent is necessarily uniformly distributed. Such a simple approach would ignore obvious field realities including:
Projects in a start up or phase down period spend less than during the height of operations
Projects are going to be in different phases over time
One dollar will buy more in one country than in another and the value of a dollar varies enormously even over a year in some Field countries
Plan's objective is to approach these realities in a sensible and efficient way to ensure that over time each community where Plan works and each child within those communities benefits in a way that is equitable.
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Plan raises funds in 17 National Offices, does the ratio of what is available for programs vary from one country to another?
Plans commitment to spending 80% of all funds on programs for children is implemented globally. If the equivalent ratio is calculated per National Office there will be some variations. Some offices will be above the ratio and some below. This really depends on a wide range of factors including:
Economies of scale i.e. whether the National Office is a large established office or a smaller newly established office
Special events: e.g. if a special one off fundraising event is planned in an office for that year
One dollar will buy more in one country than in another and the value of a dollar varies enormously even over a year in some Field countries
Higher costs of labor in some countries
Yearly variations on costs that need to be absorbed over time e.g. new computer systems
Growth strategies where Plan may decide to grow its donor base in one country at an increased rate
Plan's International Office ensures that the variations cancel themselves out so that the global average is maintained. Plan International reviews and approves the ratio of each National Office each year.
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I've heard that a lot of aid funds are diverted through corruption in overseas countries. How can I be sure that this doesn't happen at Plan?
Many people have heard of corruption in developing countries. This is usually related to large-scale commercial projects often worth millions and sometimes billions of dollars. It is a common misconception to assume that this situation must also be true for agencies doing aid work overseas. In fact this is not the case. Aid organisations like Plan operate quite differently than these mega projects. One of the benefits of supporting Plan is that it is a truly independent, non-government organisation. This means that Plan can operate at arm's length from external parties. Plan guards this independence jealously and Plan is able to apply the same rigorous accountability standards in every country that it operates. The ability to operate independently is a condition that is written into the agreement that Plan signs with the host government. All financial transactions are completed according to Plan's financial procedures and at the end of the year these are all checked independently in each country by Plan's auditors, PricewaterhouseCoopers.
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How can I check that what has been stated is true?
Plan International's accounts are some of the most detailed and transparent in the overseas aid sector.
Read Plan's Worldwide Annual Review.
Plan Australia also maintains a detailed and transparent set of accounts.
Read Plan's Australia's Annual Report
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How can I be sure that the annual reports are accurate?
Every National Office, Country Office and the International Office of Plan is audited by PricewaterhouseCoopers one of the world's largest accounting firms. PricewaterhouseCoopers sign off on each of the annual reports. In line with this policy PricewaterhouseCoopers audit the annual accounts of Plan Australia.
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In addition to this Plan Australia is a member of its professional peak body the Australian Council For International Development (ACFID) and is a signatory to its code of conduct that covers the presentation of annual reports. ACFID reviews and approves Plan Australia's annual report each year. To consider ACFID's role visit www.acfid.asn.au
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