Are You Afraid To Reveal It?
I was drawn to a Fast Company article titled What Do People Want When They Give To Nonprofits?
I would have thought the answer was pretty easy. Feelings like self-validation, relief (from anger, frustration, fear, etc), recognition, efficacy and connection came to mind.
But the article left me disappointed, wandering into areas like “gamifying” donor engagement and using goal progress bars to encourage giving. Tactics and tools, not feeling states.
However, a link to this older (1 June 2016) Fast Company article proved more interesting: Demanding That Nonprofits Not Pay For Overhead Is Preventing Them From Doing Good. This article was based on a report from the Bridgespan consulting firm.
Bridgespan took the bull by the horns, criticizing the “starvation cycle” mentality of many donors and funders, where pressure to arbitrarily limit spending on ‘overhead’ actually cripples the ability of charities and nonprofits to deliver on their programmatic mission.
According to Bridgespan, the average S&P 500 firm spends about 34% of their budget on essential behind-the scenes support, as compared to the 10-15% ‘standard’ that gets touted (often insisted upon) by nonprofit donors and funders.
They noted that, just as the overhead spends considered ‘normal’ varied widely in the for-profit world by type of business, the same should be expected to hold true in the nonprofit world — medical research organizations are not advocacy groups are not child service agencies.
Here’s the line about hiding nonprofit overhead costs that really got me — “…one anonymous CEO noted that his or her group kept two budgets ‘one that has the real numbers, and another that shows the funders what they want to see’.”
How does your charity or nonprofit handle this unfortunate situation? Are you candid and transparent to donors about your overhead, regarding it as fully justified?
Does anybody out there proudly disclose your ‘overhead’, asserting its justifiable contribution to achieving your mission?
Or are you afraid to reveal it, whether you consider it an appropriate level or not?