Cost Per Filter

At the risk of boring everyone out there, I’m going to let you see inside my head. They say to write about what you know, so I’m going to write about the constant struggle to spend donor money efficiently. It will probably go on for several pages, and I’ve probably lost most of you already. And what could I possibly include for a picture? I’ll find some cats acting crazy or something.

The way I see it is I’m responsible to make sure donor money get spent as efficiently as possible to achieve the organization’s goals. Our goal is to improve Haitian’s health via improved access to clean water. We realized years ago that the most cost effective way to do this is with the Biosand filter, and since then we have been working on our distribution model.

Chris and goat
No cats, but I did find some weirdo and a baby goat. The mother goat attacked right after this photo was taken.

At first glance, it looks like distributing filters shouldn’t be very expensive at all. To build the filter itself, the concrete box that holds the sand, is very inexpensive, perhaps less than $10 each. After that though, things just keep on adding to the price.

As it turns out, transportation expenses cost more than anything else. Fuel for the vehicles is expensive and we drive a lot of miles back and forth to where our beneficiaries live. Fuel is only the start of it though – Haiti is very hard on vehicles. I remember one particular delivery day where I was driving and accidentally backed over an old piece of rebar that was sticking out of the ground. It went right through a brand new $260 truck tire, completely destroying it. We can do our best to reduce those kinds of expenses, but they are always going to be there.

A few things have changed for the better in regards to transportation. First, the roads improved dramatically in 2011 when they completed the rebuild of Route National 1. There are no more potholes and it reduced the time required to get to our main delivery area. The next is a more recent development. I finally found a good mechanic! For years maintaining our vehicles has been an ongoing struggle. I did a lot of the work myself, and delegated most of the simpler tasks to our workers. However, there are always going to be more complicated issues that we just can’t deal with. We don’t live in the capital, and out here in the provinces there aren’t any respectable shops. We would typically resort to towing the broken vehicle into Port au Prince and taking our chances with a mechanic in the capital. More often than not, the original issue would be resolved but two new things were broken. In one case, the mechanics had removed many of the good parts on the (almost brand new) vehicle and replaced them with old, worn out parts. In such cases, going back to complain is a waste of time. Our new favorite mechanic was until recently a manager in a shop in the Dominican Republic. He moved back to Haiti around the time recently that the D.R. deported thousands and thousands of Haitians. The way I see it, it’s the Dominican Republic’s loss and our gain. I’ve been giving him a lot of business lately and our vehicles are running better than they have in a long time.

We do what we can to keep expenses down but what has been killing me for the past several years has been our fixed expenses. There are certain things we have to pay for every month, or year, no matter what. Tax is one of them. Yes, that’s right, in Haiti non-profits pay tax. Property tax, vehicle registration tax, income tax, and various other taxes.

Up until recently, we had to pay for electricity every month. This, I am happy to say, is no longer an issue for us! We are literally fully off grid, and haven’t had to use the generator at all since we moved in, even with the welder going, water pump and sand washing machine running. That’s saved probably $600/month between diesel fuel and bills from Electricite de Haiti. They didn’t give power very often, but when they did we had to pay for it.

Another fixed cost, now gone, was our security company bill. In our new, tranquil community, we don’t need the old security company which was $1200/month. It’s a huge savings. In a year like last year where we installed some 1400 filters for example, the security costs added $10.30 per filter! That’s over now, thank God. Every dollar we paid to the security company should have been going to the Haitian people we came here to serve and now it is.

The Calculus for cost per filter is tricky. In 2010 our cost per filter worked out to about $76, in spite of the fact that we bought a brand new delivery truck that year. The key thing is that we delivered so many filters, our fixed costs didn’t play as much of a role as they do in years when we deliver few filters. So part of my job is to make sure we are delivering as many filters as possible with the resources we have available. It all requires money; if our funding doubled, we wouldn’t just be delivering double the filters, we would be delivering perhaps as much as 3 times the filters! The flip side is if our funding drops too low, there are only so many things we can cut before everything comes to a halt.

Other Executive Directors spend a lot more time fundraising than I do. Part of the problem is that I live here in Haiti and fundraising would require traveling abroad. Another problem is I don’t like doing it, and I’m not very good at it. But whenever the topic comes up the first thing through my head is that when we buy a plane ticket, that’s money that should be going towards filters.

In our board meetings, we have had many discussions about fundraising and how we need to go about it. The idea of hiring a professional fundraiser has come up many times and it has generated a lot of discussion. Unfortunately, a professional fundraiser takes a percentage of funds raised, which would mean those funds would increase our cost per filter not by dollars and cents but by a percentage. UGH.

Ideally, board members and volunteers would be raising funds, writing grant applications and promoting the project from where they are in the States and Canada. We have quite a bit of support that comes in that way, as a matter of fact, which means that we can proudly say our fundraising expenses are extremely low. However, if we want to get up to the level we want to be at, which is about 5000 filters a year instead of 1400, something is going to have to change. I already have a fundraising trip scheduled for April, and we’re going to have to schedule more.

Whether or not I can learn how to fundraise better and recruit people to help me is a big “IF” but IF we can increase production and IF we don’t have to buy any new vehicles in the next few years, I’m feeling optimistic that we can get our cost per filter down. I’m going to be working hard at it.

 

 

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2 thoughts on “Cost Per Filter

  1. Hey Chris: good topic! This brings up the whole subject of overhead for non-profits in general. You made your point very well. We here in Canada and the US need to do a much better job of making sure that the work there in Haiti is being funded properly. No one is going to be good everything. The very things that make you an *exceptional* ‘boots-on-the-ground’ leader are also the things that will make tasks like speaking engagements and fundraising trips an uncomfortable and sometimes frustrating thing for you. Press on and hopefully as we get better at doing that sort of thing here, you will have to do less of it! Keep up the good work!

    1. Thanks for the encouragement, bob! I’m hoping this upcoming trip is more about recruiting board members and volunteers who are willing to work hard at fundraising rather than just fundraising myself.

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