Saturday, 7 February 2009

How to feed a cash-cow with volunteers

First of all you find somewhere cool (more truthfully pretty warm and lush) you think volunteers would like to go to. Cool isn’t quite enough, you also need somewhere which is relatively poor, has development needs, and is reasonably stable politically and socially.

Next you try to find schools or colleges which might have an interest in some voluntary teaching by bright kids from the UK – by definition bright because they’re over the hurdle of uni entrance. You need somewhere that will take at least 2 or 3 volunteers at a time, and can offer accommodation. The cost to the school of its additional teaching resource is the accommodation and a bit of management bandwidth for the volunteers. The school can be incentivised with a payment that is relatively large by local standards; call it a grand.

You write the Teaching Project up and start flogging it. You charge £750/person for the first 4 weeks, and £100 for each additional week (though you only sell them in 4s). 14 volunteers go for it, and the profile looks like this:

So, the school/college got 88 person weeks from the volunteers over nine months, and the organiser gets the following income from them.

14 volunteers @ £750 for the first 4 weeks = £10,500
8 volunteers @ £400 for second 4 weeks = £3,200
Total £13,700

Against this are the costs.

Total staff time to organise 1 month £1,500 (which is pretty generous)
Incentive payment to school/college £1,000
Food allowance to volunteers @£20/week £1,760 (Person weeks * 20)
Total £4,260

So the Gross profit is £9,440. From this the organiser deducts a further £1,500 for the office overheads and management costs, so there’s a net profit of £7,940.

Well you’d hardly get to a champagne lifestyle on that. Or would you? Why not run 74 projects like this? That’s far better. If every one of those projects achieves the same sort of figure (call it £8,000 in round numbers) then a net profit emerges of £592,000. Now that’s a cash-cow. And if you factor in the economies of scale, you can whack down your costs, and probably up the profit to nearer £650,000.

Of course business plans never quite work out as they should, and there are always things the naive outsider cannot see, and information they haven’t got. However on the scale of charges that Frontier makes, and on the reports from those who have experienced Frontier projects, there is plenty of surplus cash which their bovine beastie can extract from the cud.

There is nothing illegal about this. Caveat emptor always applies. What is apparent is the yawning gap between the rhetoric of the sales pitch and the quality and value for money being delivered by Frontier.

Please comment below