We ran across an interesting article by Bruce DeBoskey, Founder & President of The DeBoskey Group, that we wanted to share:
Adherence to the overhead myth creates a “starvation cycle” that undermines the actual capacity of nonprofits to achieve their missions, according to a groundbreaking 2009 article in The Stanford Social Innovation Review.
“The cycle starts with funders’ unrealistic expectations about how much running a nonprofit organization costs, and results in nonprofits misrepresenting their costs while skimping on vital systems – acts that feed funders’ skewed beliefs,” authors Ann Coggins Gregory and Don Howard wrote.
In a seminal 2013 TED Talk, activist and fundraiser Dan Pallotta provided a stimulating analysis. In “The Way We Think About Charity Is Dead Wrong,” which has been viewed more than 3.6 million times, Pallotta concluded:
“The next time you’re looking at a charity, don’t ask about the rate of their overhead. Ask about the scale of their dreams – their Apple-, Google-, Amazon-scale dreams. Ask how they measure their progress and what resources they need to make them come true regardless of what the overhead is. Who cares what the overhead is if these problems are actually getting solved? If we can have that kind of generosity … then the nonprofit sector can play a massive role in changing the world for all those citizens most desperately in need of it to change.”
In a 2013 campaign to end the overhead myth, Guidestar, BBB Wise Giving Alliance and Charity Navigator wrote an open letter to U.S. donors. In 2014, they wrote to nonprofits, encouraging them to do their part to focus donors’ attention on the real costs of their work. Both letters can be read at overheadmyth.com.