A rant on the tight hold “overhead” has on nonprofit financials and giving decisions I wrote with my colleague is up on Co.Exist. An excerpt:
When considering donations, people often make harsh assumptions about nonprofits that spend on marketing and overhead. But maybe those expenses means the organization is doing a good job? Every year around this time, a batch of articles comes out talking about how to maximize your year-end giving by focusing on nonprofits with super-low overhead, so you can rest assured that every cent you donate goes directly to the cause. But I’ve spent the better part of my career as a nonprofit tech warrior, from volunteering in the Peace Corps to a variety of domestic and internationally focused NGOs and nonprofits--small and large. I’ve had contract, full-time, pro-bono, and board positions, and have been on both the grant-requesting and grant-reviewing/giving sides of the equation, and I can tell you that this isn’t entirely fair. The problem is this overhead supports the cause, and zeroing it out means that the 99% non-overhead may be spent poorly or non-strategically, especially in smaller organizations. Programmatic costs may pay for the work, but overhead pays for the tools to do the work well.
As a follow-on, if I ever hit the jackpot, I want to build a foundation that only invests in the most boring line-items. Toilet repair? Computer upgrades? Then, pair the information about what’s not getting funding with social innovators looking for unmet needs, and you create something interesting.