Admin Ratio Is a Poor Indicator of a Charity's Effectiveness | Marina Glogovac

Admin Ratio Is a Poor Indicator of a Charity's Effectiveness | Marina Glogovac: "But when we look at charities to support, we suddenly and inexplicably get fixated solely on the "admin ratio" and the overhead, which for charities can include both costs of fundraising and admin expenses. We value charities mostly based on how low the overhead is -- this is a deeply entrenched, if not consciously examined, measuring stick for charities. We want our support to go exclusively toward program delivery and not into staff, operations, technology, or training and development -- as if the two are completely unrelated."



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Will major donors pay overhead to leverage engagement and giving from new donors? - CFRE International

Will major donors pay overhead to leverage engagement and giving from new donors? - CFRE International: "A study published last fall in Science (view abstract) reports that more first-time donors gave and gave higher amounts when an appeal stated that overhead costs had been met by a prior donor. The total project costs were $20,000, and all comparison groups in the study had $10,000 commitments in hand. The letters that stated the $10,000 commitment was for overhead raised the most. The research is part of the Science of Philanthropy Initiative, based at the University of Chicago."



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A Board Member's Guide to Nonprofit Overhead | Blue Avocado

A Board Member's Guide to Nonprofit Overhead | Blue Avocado

Calculating overhead rates and managing overhead expense are important staff roles. Board members are not required to know how do staff accounting work, but we do need to bring an informed perspective to our oversight:

 

Wounded Warrior CEO Rips Rating Systems as ‘Ineffective and Misinformed’ - News - The Chronicle of Philanthropy- Connecting the nonprofit world with news, jobs, and ideas

Wounded Warrior CEO Rips Rating Systems as ‘Ineffective and Misinformed’ - News - The Chronicle of Philanthropy- Connecting the nonprofit world with news, jobs, and ideas: Working against the prevailing view that overhead is bad and spending money on fundraising signals inefficiency or fraud, the Wounded Warrior Project made significant investments in its fundraising operation, he said. It has grown revenue by about 65 percent each year since and is on track to bring in more than $300-million this year, he said.

Mr. Nardizzi made the comments Thursday at the Bridge to Integrated Marketing and Fundraising Conference in Maryland.

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.

The Overhead Debate: Charities Risk Widening Rift With Donors Over Administrative Costs - Opinion - The Chronicle of Philanthropy- Connecting the nonprofit world with news, jobs, and ideas

The Overhead Debate: Charities Risk Widening Rift With Donors Over Administrative Costs - Opinion - The Chronicle of Philanthropy- Connecting the nonprofit world with news, jobs, and ideas: The Overhead Debate: Charities Risk Widening Rift With Donors Over Administrative Costs

By Brian Mittendorf

It’s rare that nonprofit accounting makes headlines, but it certainly has had its share of time in the spotlight in recent months. Most recently, an investigation by The Washington Post into substantial “diversions” of assets among nonprofit organizations highlighted issues of financial accountability. The report examined embezzlement, fraud, and other irregularities at more than 1,000 nonprofits.

| Overhead Ratios: How to answer your donors’ questions

| Overhead Ratios: How to answer your donors’ questions: Overhead Ratios: How to answer your donors’ questions

Episode #254

How do you respond when a donor asks about how much of their dollars go to funding your overhead?

For many folks, this can be a tricky question and one that brings some tension to the conversation.

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.

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.

A new way of thinking about charities - South Florida Sun-Sentinel.com

A new way of thinking about charities - South Florida Sun-Sentinel.com: But is it really better for a nonprofit to hold a bake sale with just 5 percent overhead and net $71, he asked, if instead it can spend 40 percent on overhead on mass events and net $71 million? Isn't the real measure of a charity its impact and effectiveness in helping solve social problems anyway?

"Disney can make a $200 million movie that flops, and nobody calls the Attorney General," he told an audience of 600 nonprofit leaders and board members. "But you do a $1 million fundraiser for the poor, and it doesn't produce 60-70 percent returns the first year, your character is called into question."

An executive decision; three things the charity CEO salary maelstrom taught us and what to do about it | nfpSynergy

An executive decision; three things the charity CEO salary maelstrom taught us and what to do about it | nfpSynergy: n our research with the public through our awareness monitor CAM, we see that how charities spend their money really matters. Of course, there are those who say the public shouldn’t care about overheads and should focus on impact. Well you live in your ivory towers and we will keep trying in the real world that the public inhabit. Again and again and again, the public tell us that the size of CEO salaries, the level of ‘admin’ costs and how their money is used really matters to them.

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.

Marketing for Nonprofits: Innovation is Overhead

Marketing for Nonprofits: Innovation is Overhead: Tuesday, July 9, 2013
Innovation is Overhead
My bestie, Laura Caligan, shared this brilliant thought with me today.

"Innovation is overhead."

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.”

Why Can’t We Get Over Overhead? - NPQ - Nonprofit Quarterly

Why Can’t We Get Over Overhead? - NPQ - Nonprofit Quarterly: hat slapping noise you hear every holiday season is the sound of philanthropic experts briskly applying palms to foreheads as they watch the perky nightly-news broadcaster reminding viewers to be generous, but to give only to groups that spend far more on programs than on overhead.

The program/overhead distinction, though denigrated for years by the most articulate and determined nonprofit professionals, simply refuses to die. Somehow, the general public doesn’t want to let go of it.

Why not? Will the simple-minded rubes whose donations constitute the overwhelming majority of charitable giving in America ever realize that it’s a meaningless if not downright pernicious distinction? Will they finally turn instead for giving guidance to the shiny new outcomes metrics upon which our experts have been beavering away?

Valerie S. Lies: It's Time for Real Talk About Real Nonprofit Overhead Costs

Valerie S. Lies: It's Time for Real Talk About Real Nonprofit Overhead Costs: This is a welcome development for donors and nonprofits alike. For too long the laser-like focus on nonprofits doing more with less when it comes to overhead and administrative expenses has unnecessarily limited their abilities to fulfill or expand their missions.

To be sure, ratios can be a measure of an organization's effectiveness and should be used as one of a set of tools to identify mismanagement or malfeasance. But we ask charities to do too much with too little to achieve effective ratios. It's time we start looking at an organization's outcomes -- in addition to what they spend to achieve them -- when determining where our charitable dollars go.

Oregon Sets 30% Program Spending Benchmark for Charities - NPQ - Nonprofit Quarterly

Oregon Sets 30% Program Spending Benchmark for Charities - NPQ - Nonprofit Quarterly: NPQ has had a number of stories on overhead lately, including our blockbuster today where three prominent organizations are calling for an end to the overuse of overhead as a measure of grantworthiness but what about when nearly no money of what is raised goes to program? Oregon has now enacted the nation’s toughest law on spending by nonprofits. The law will pull eligibility for the state charitable tax deduction for donations from charities that do not spend at least 30 percent of their donations “to support their mission.” Charities that fall short of the 30 percent threshold are required to disclose that information or face a penalty of up to $25,000.

Given recent debates within the n

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.

Why Can’t We Get Over Overhead? - NPQ - Nonprofit Quarterly

Why Can’t We Get Over Overhead? - NPQ - Nonprofit Quarterly