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Analysis: Highlights of This Page

As shown on this page, Management and General (line 44 Col. C) is 18.4% of total expenses (line 44 Col. A). Salaries in that category (line 26 Col. C) are 26.5% of total salaries (line 26 Col. A). These figures are not unreasonably high for a nonprofit organization in general. Are these costs too high for Pacifica? To fully explore this question, it would be necessary to have a list of the jobs and duties of the administrative and management staff. A schedule of salaries would also be useful, but may not be essential: the five top-paid staff salaries, listed in Schedule #2, are at or below comparable pay rates in other Bay Area nonprofits, so it's unlikely that lower-paid staff members are overpaid.

Fundraising costs (line 44 Col. D) are 19.9% of total costs (line 44A) -- a reasonable, even inexpensive, cost level for an organization that depends on small donations from a large number of people, raised through on-air and telephone solicitation. More than one-third of the fundraising costs are on line 43b Col. D, which is detailed in Schedule #8. The expenses in this area appear typical; see the schedule for details.

It may be puzzling as to how some of the expenses have been divided among program services, management and general, and fundraising. A typical practice in nonprofit accounting is to calculate the "direct costs" of those activities, and then divide up the "shared costs" according to the same percentages as the "direct costs." For example, in fundraising, a direct cost would be the hiring of a telemarketing firm. A shared cost would be the organization's occupancy costs (rent, mortgage, utilities): Since the provision of office space benefits the entire organization (in theory), its costs are divided proportionately among the different functions (program, management and general, fundraising). Similarly, instead of accounting for every telephone call, Pacifica may divide the phone bill according to a formula that reflects an estimate of the relative phone usage of the different functions. My experience with exact tracking versus estimates leads me to believe that tracking such expenses is almost always a waste of time and money, because the estimates of experienced managers are typically quite accurate. I have not crunched the numbers, but from glancing at the figures on this page, nothing stands out as being extraordinary.

Note in Part III that the total number of listener-subscribers was 57,760 in 1995-1996. It would be interesting to get the number broken down by radio station.

The schedules related to this page may be found by clicking below:
Schedules #2, #3 (lines 26, 37)
Schedules #4, 5, 6, 7 (lines 36, 38, 40, 42)
Schedule #8 (line 43b)

Pages of this Return:

1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20 | 21

Pacifica Returns Online:

1995-1996 | 1996-1997

This analysis prepared by Steve Freedkin.