Overhead Matters

March 19, 2016 § 1 Comment

Well, it has happened again. A high-profile charitable organization has come under fire for questionable spending, putting the entire charitable industry on alert. Earlier this year, the Wounded Warrior Project (WWP) was hit with allegations of lavish spending on travel and and organizational events. Sadly, but predictably, this story has caused some journalists to scrutinize overhead expenses for all nonprofits.

As Dan Pallotta, founder of the Charity Defense Council, says, “Overhead expenses are necessary for raising funds for maximum program impact.” The preliminary response by the Charity Defense Council to the Wounded Warrior WWP story shows that, while the percentage of overhead expenses to fundraising results is higher than some other comparable organizations, the amount of money that they raised is so much greater, it is clear that the programmatic impact of that funding is huge. The data visualizations in the report bear this out.

Fundraiser Grrl speaks my mind:

When someone talks about how wasteful nonprofits are and how they spend too much on “overhead.”

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This is about as articulate as I can get, sometimes.

If you’re in the nonprofit world, you should really be reading Fundraiser Grrl. It’s very cathartic. But I digress.

It’s unfortunate that the anecdote of questionable actions on the part of one organization will call into question the overhead spending practices for the entire nonprofit world. Certainly, the optics for the executives of the WWP are pretty bad, but in fairness, that should not shine a negative light on the rest of us.

But this is also an opportunity to bring to light some things about charitable work and fundraising that are often misunderstood.

Prospect Development Pride Month was started, in part, in response to situations like this. I could go on here about the value of prospect development, and the importance of overhead expenses to a successful nonprofit, but I have already done that, and my colleagues are doing it so much better. Just follow the #ResearchPride hashtag on Twitter, or search for it on Google, and you’ll see what people are saying, and you’ll find some really wonderful blog posts.

Also, check out the mission and “Five Functions” of the Charity Defense Council. Their work is helping me to better articulate the value of what I do for a living.

#IAmOverhead #ResearchPride

 

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