This week there has been lively discussion about this topic. For years the question of how significant “overhead” is when evaluating nonprofit effectiveness has been a hot button. Now the experts have taken a stand. Read this article from www.overheadmyth.com and enjoy the pdf with important statistics about the critical need to invest in infrastructure such as staff and technology. It’s a great read!
Then let me know what you think.
It’s Time to Move Beyond Overhead
The experts have spoken: the percent of charity expenses that goes to administrative costs—commonly referred to as “overhead”—is a poor measure of a charity’s performance. Join us to end the Overhead Myth and start supporting nonprofit investments in sustainability and success.
In a historic move, the leaders of the country’s three leading sources of information on nonprofits – GuideStar, Charity Navigator, and BBB Wise Giving Alliance – penned an open letter to the donors of America denouncing the “overhead ratio” as a valid indicator of nonprofit performance. The letter, signed by all three organization’s CEOs, marks the beginning of a campaign to correct the common misconception that the percentage of charity’s expenses that go to administrative and fundraising costs—commonly referred to as “overhead”—is, on its own, an appropriate metric to evaluate when assessing a charity’s worthiness and efficiency. The nonprofit sector, which all three organizations provide information to and about, has too often erroneously focused on overhead over the past few decades, which has starved nonprofits from investing in themselves as enterprises and created what the Stanford Social Innovation Review calls, “The Nonprofit Starvation Cycle.”
What do you think?
Leave A Comment