Ah, the pernicious overhead myth.
Dan Pallotta’s TEDtalk continues to spur conversation and (even some action) about the way we evaluate effectiveness. Funders have for too long depended on simplistic measurements, largely how much money is spent on administrative costs, or overhead.
This provides a measurement of sorts, and one that’s easy to arrive at. The question is whether it’s metric with meaning. The true picture of an organization’s effectiveness is far more complex and varied. It’s an important conversation, and I hope we’ll continue to debate it.
But here’s the other ugly truth:
The worst offenders when it comes to the overhead myth are not our funders.
Too often, the people clinging to the idea that administrative costs hurt program effectiveness are those of us working in nonprofit organizations.
Think about it. Unless your organization looks at fundraising and marketing as programs – as critical to your mission’s effectiveness – you’re buying into it.
I know why we do it. I do it, too. It’s the kind of people we are. We’re committed to our missions!
And I’m not arguing for runaway costs. I’m not arguing for luxe offices and exorbitant salaries. Because let’s face it, those are pretty rare. They get the news attention. But they get it because they’re so uncommon.
Most of us are working for far less than our skills would command in the for-profit world.
In conditions most for-profit interns don’t have to put up with.
And with expectations that border on the miraculous.
And most of us simply accept that our missions demand our programs come first.
But I’m beginning to see how that well-meaning thought is killing our organizations and hampering our missions.
Fundraisers, we need to start demanding that our fundraising programs be central to our organizations. Our colleagues need to be part of those fundraising efforts.
I liken this to the instructions you’re given on an airplane to put the oxygen mask on yourself first, and then any children with you.
It seems counterintuitive to any parent out there – “my kids come first!”
But it’s smart. If you don’t make sure you CAN get the masks on the kids, you’ll all be in trouble.
It’s the same with our organizations.
If your organization is in a growth phase, or your funding is less than sufficient, then you need to make your fundraising program a priority.
It’s the program you must invest in.
Because if you can’t do what’s needed for successful fundraising, you can’t sustain your organization’s mission.
If you can’t create conditions where your staff is stable (and paid), where equipment allows the work to be done, and where the people investing in you can feel they’re making a wise choice – none of your programs will succeed.
How are you going to make a compelling case for support if you can’t attract smart, caring, skilled people to do that work?
Mary, a discussion of nonprofit overhead may strike some as merely an intellectual debate. However, there are serious, significant issues that relate back to this topic. It is essential that nonprofit professionals engage in the conversation. Thank you for addressing this important topic!
Thank you, Michael. I’m seeing this happening quite close to home right now. I guess it’s hard to look at the longer-term when there are so many immediate needs in the world.
I appreciate you reading and commenting.
Mary, the overhead myth is important to address, mostly because it is a mess of our own making. Donors didn’t just one day wake up and think, “I am only going to give support to an organization that spends all its money on its programs.” The organizations were the ones who gave them that idea. If a program is going to sustain itself and grow, it needs to be able to pay its bills and keep qualified employees happy so they can do their jobs effectively. Nice analogy of the airplane mask!
Thanks, Richard. Needless to say, I completely agree.
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