Help Move the Nonprofit Sector from an Overhead Myth to an Overhead Solution
By Sarah Ford on October 21, 2014
Source: GuideStar Blog
By Jacob Harold, President and CEO, GuideStar
In 2013, I joined with colleagues at BBB Wise Giving Alliance and Charity Navigator to write an open letter to the donors of Americaexplaining that “overhead ratios” are a poor way to understand nonprofit performance. As you know, these ratios—the percent of charity expenses that go to administrative and fundraising costs—tell us nothing about an organization’s performance against its mission.
We believed that the nonprofit sector was hungry to dispel this “Overhead Myth.” The field’s extraordinary reaction to the first letter has thunderously affirmed that belief. Today, we build on that momentum by offering a second letter, this one addressed to the nonprofits of America. In this second letter we suggest a set of steps nonprofits can take to help us all move beyond the Overhead Myth. In simple terms, we must—collectively—offer donors an alternative. We believe it will take a shared effort to focus donors’ attention on what really matters: nonprofits’ efforts to make the world a better place. Please join us as we seek to move from the Overhead Myth to the Overhead Solution.