The Overhead Myth
Nonprofit organizations dedicate their time, energy, hearts and resources to making a difference in people’s lives; they work to affect this change in different way, requiring different types of investment. So when evaluating nonprofits, instead of focusing on administrative and fundraising costs commonly known as “overhead,” we need to focus on what really matters: impact. For their part, nonprofits need to ensure careful, ethical use of donor funds in pursuit of that impact.
That’s why Sound Off is joining GuideStar, Charity Navigator, and the BBB Wise Giving Alliance – three of the country’s premier non-profit evaluators – in the pledge to be part of the Overhead Solution.
Last year, GuideStar, Charity Navigator, and the BBB Wise Giving Alliance published an open letter to donors denouncing the use of the “overhead ratio” as a primary indicator of nonprofit performance. The letter, signed by all three organizations’ CEOs, marked the beginning of a campaign to correct the common misconception about the importance of a low overhead ratio.
A new open letter, educates and encourages nonprofits to work toward an Overhead Solution. Specifically, the letter asks nonprofits to do three things: (1) demonstrate good governance and ethical practice, (2) manage towards results and understand your true costs and (3) help educate funders on the real costs of results. The letter provides resources to help nonprofits in this critical endeavor to measure and report on what matters most.
Join us in spreading the word about this important topic. Nonprofits and their supporters are encouraged to learn from and share the Overhead Solution letter, which is under a Creative Commons License and may be used however they wish.
Let’s come together on an Overhead Solution TODAY!