Overhead Ratios: How to answer your donors’ questions |

Overhead Ratios: How to answer your donors’ questions |: Well, in this week’s episode, Peter Drury from Splash shares a terrific tip on answering the question about your overhead ratio. And perhaps after you watch the video, you will actually WANT donors to ask you that question.

Peter, by the way, is also the creator of the “Beyond Cash Fundraising Management Dashboard”. This is a terrific resource that helps organizations prioritize and save their time. It makes fundraising a predictable process. If you want to know more about the dashboard, go here: nonprofitbestpractices.com

Pamela Barden Charity Overhead Myth, Mystery or Just a Misunderstanding? : FundRaising Success

Pamela Barden Charity Overhead Myth, Mystery or Just a Misunderstanding? : FundRaising Success: f you've been paying attention to the both the trade publications and consumer media, you've probably noticed a more frequent focus on overhead — that combination of fundraising and general and administrative (operations) that costs money that is then not available for programming — than, you know, fulfilling your mission.

But let's face it — overhead is a fact of life.

Overhead Costs: The Obsession Must Stop | Stanford Social Innovation Review

Overhead Costs: The Obsession Must Stop | Stanford Social Innovation Review: When it comes to charitable giving, there will always be skeptics who question where the money really goes—and donors who object to a charity using their gifts to cover overhead. This skepticism is misplaced. Nonprofits are businesses and, as they grow, they must invest in their infrastructure to survive, retain employees, and, ultimately, succeed at their mission.

The AFP Blog Different Issue, Same Theme: Communication

The AFP Blog: That’s a critical change in approach from these organizations, and a very welcome one. But as I said then, it’s up to us to communicate with donors, media, government and the public about why we have fundraising costs. And if we DON’T pro-actively have these conversations, then other people and ideas will fill in the void.

Watchdog Admits It Costs Money To Raise Money | The NonProfit Times

Watchdog Admits It Costs Money To Raise Money | The NonProfit Times: Watchdog Admits It Costs Money To Raise Money
By The NonProfit Times - August 6, 2013

“You’re here to accomplish a goal, and all sorts of expenses make that happen.” Those were the words of Art Taylor, president of Better Business Bureau Wise Giving Alliance (WGA). “There is a preoccupation in the public domain about these ratios. We’ve always tried to point out that there are a variety of things donors should be concerned about. An organization’s financials are just one part.”

How To Talk About Fundraising Costs | The Agitator - Fundraising, Direct Marketing and Advocacy Strategies for Nonprofits

How To Talk About Fundraising Costs | The Agitator - Fundraising, Direct Marketing and Advocacy Strategies for Nonprofits: ike it or not, far too many folks judge a charity by its cost of fundraising and ‘overhead’.

From regulators to the media, from charity watchdogs to far too many nonprofit boards — and even some fundraisers themselves — the false metric of ‘cost of fundraising’ has created a big mess of misunderstanding.

Fortunately, the industry is waking up and finally seems motivated to deal with the issue.

About High Fundraising Costs: It’s Complicated - Opinion - The Chronicle of Philanthropy- Connecting the nonprofit world with news, jobs, and ideas

About High Fundraising Costs: It’s Complicated - Opinion - The Chronicle of Philanthropy- Connecting the nonprofit world with news, jobs, and ideas: It’s time to make sure everyone understands that direct marketing is about the long run, not the short term.

As an example of what I mean by that, let me take you back to 2001, when the direct-marketing firm I was working at landed a new client. It had a small pool of donors—just 40,000—and raised about $7-million, mostly in small gifts.

Understanding Nonprofit Overhead Costs - Memphis Daily News

Understanding Nonprofit Overhead Costs - Memphis Daily News: A public discussion is stirring on the topic of nonprofit overhead and the extent to which overhead costs should influence giving. The three leading sources of information about nonprofits recently issued a call to action asking individual and institutional donors to stop using “overhead” as the measure of a nonprofit’s success. GuideStar, Charity Navigator and BBB Wise Giving Alliance have issued a call to donors to move beyond the “Overhead Myth.”

The Overhead Myth Campaign - A GuideStar Initiative to Improve Donor Choice

More on Overhead Costs

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 Overhead Myth Campaign - A GuideStar Initiative to Improve Donor Choice

Launching a campaign to end the Overhead Myth | GuideStar Blog

Launching a campaign to end the Overhead Myth | GuideStar Blog: My nonprofit friends, it’s time we changed the conversation about “the overhead ratio”: the percentage of your organization’s expenses that go to administrative and fundraising costs.

For too long, we’ve let a few bad apples—the rare cases of outright fundraising fraud—confuse donors about what matters when judging a nonprofit.

Overhead Costs Pose Dilemma for Charities 6.3.2013

News: Overhead Costs Pose Dilemma for Charities 6.3.2013

By Suzanne Perry

Last fall, the International Rescue Committee mailed an eight-page newsletter to supporters that highlighted the work it was doing to help people displaced by famine, drought, and conflict in Africa’s Sahel region.

It included photos, articles, interviews, and statistics—and a prominent pie chart labeled: “IRC efficiency.”

Fundraising costs are not a measure of a charity's effectiveness | Voluntary Sector Network | Guardian Professional

Related links on Fundraising Costs

Fundraising costs are not a measure of a charity's effectiveness | Voluntary Sector Network | Guardian Professional: Fundraising costs are not a measure of a charity's effectiveness

Fundraising costs are influenced by many factors, but marketing can perpetuate the myth that they are a measure of efficiency

Watchdog Barks Louder On Cost Allocation Issues - TheNonProfitTimes

Watchdog Barks Louder On Cost Allocation Issues - TheNonProfitTimes: Charity Navigator, in Glen Rock, N.J., decided to tweak its rating system and consider joint allocation costs entirely as fundraising expenses. Joint allocation costs, under certain guidelines and criteria in accounting standards, allow a portion of certain materials to be split between program expenses and fundraising expenses.

In cases where joint costs are extreme, Charity Navigator President & CEO Ken Berger said it would affect the rating of a charity, but probably fewer than a dozen organizations. “It’s the extreme outlier cases, where you have 30, 50 -- sometimes 80 percent -- in joint allocation. Unless the charity can show us something that really justifies this, many times it’s smoke and mirrors. It really is many times fundraising expense under the guise of education. It doesn’t really pass the smell test,” said Berger.

Charities Must Battle Myths About Overhead - Opinion - The Chronicle of Philanthropy- Connecting the nonprofit world with news, jobs, and ideas

Charities Must Battle Myths About Overhead - Opinion - The Chronicle of Philanthropy- Connecting the nonprofit world with news, jobs, and ideas: Charities Must Battle Public Misconceptions About Overhead Costs

By Dan Pallotta

Nonprofit organizations build movements that mobilize people to fight the worst forms of human suffering. But when it comes to dealing with the systemic issues that undermine its true potential, the nonprofit sector has no movement to mobilize itself.

And while nonprofits speak for those who cannot speak for themselves, they have no national voice to defend against investigative reporters, lawmakers, and others who attack them—often maliciously and incorrectly—for spending too much on executives’ salaries and on the overhead and infrastructure expenses it would take to grow.

Fred Leeb: Who Cares About Nonprofit Finances? The Top 12 Reasons Why the Most Vulnerable Are at Risk

Fred Leeb: Who Cares About Nonprofit Finances? The Top 12 Reasons Why the Most Vulnerable Are at Risk: Who is Responsible to Ensure that Nonprofits Operate Most Efficiently?

Everyone and no one. While the great majority of people in the nonprofit world are good people, this doesn't necessarily mean that the financial system is functioning most effectively. When everyone and no one is responsible, it means that nonprofit clients/customers/patients can easily fall through the cracks because nobody without other vested interests represents them at the table. This is a tremendous flaw in our nonprofit system. The most vulnerable people often have:

The AFP Blog: Better Than We Thought?

The AFP Blog: Better Than We Thought?: The Nonprofit Overhead Cost Project actually found that average fundraising and administrative costs for most nonprofit subsectors, was less than 30 cents. Most charities understand what it takes to keep the show on the road. What we fail to do is to communicate that to the public.

Fundraising Black Eye | The Agitator - Fundraising, Direct Marketing and Advocacy Strategies for Nonprofits

Fundraising Black Eye | The Agitator - Fundraising, Direct Marketing and Advocacy Strategies for Nonprofits: Fundraising Black Eye
By tbelford | May 22, 2012

There’s been a ton of local coverage of the Scripps Howard study of IRS-reported (or not!) fundraising expenses by large US nonprofits. None of it flattering to the fundraising ‘industry’.

The AFP Blog: Answering Questions, Educating the Public

The AFP Blog: Answering Questions, Educating the Public: Tuesday, May 22, 2012
Answering Questions, Educating the Public

Consider all the stories about fundraising costs you’ve ever read. There are two out there I want you to read.

The first is a report by Scripps Howard News Service about how many charities continue to underreport (or not report ) their fundraising costs.

New Study Finds Non-reporting of Fundraising Expense Widespread: But Some States Much Worse Than Others - NPQ – Nonprofit Quarterly - Promoting an active an engaged democracy.

New Study Finds Non-reporting of Fundraising Expense Widespread: But Some States Much Worse Than Others - NPQ – Nonprofit Quarterly - Promoting an active an engaged democracy.: A new study using the most recent IRS data available through GuideStar and performed by the Scripps Howard News Service has found that 15,389 nonprofit groups, or 41 percent of all United States nonprofits with annual budgets of $1 million or more, represent on their 990s that they spend exactly nothing on fundraising. While there are some situations in which this might actually be the truth, Scripps Howard followed up with further investigation and interviews which revealed that a number of the organizations reporting zero fundraising costs do spend money to raise money but simply do not report it.

Study: Many Nonprofits Misreporting Solicited Donations - San Diego News Story - KGTV San Diego

Study: Many Nonprofits Misreporting Solicited Donations - San Diego News Story - KGTV San Diego: Forty-one percent of all 37,987 charities and other nonprofit groups that collected at least $1 million according to their most recent report to the Internal Revenue Service made what experts agree is a ridiculous claim: They raised significant amounts of money without spending a dime to do so.