Busted! The Overhead Myth by Laura Hennighausen, Director of Funder Relations
It’s November. The leaves are turning, the days are getting shorter, and you know what that means in the world of fundraising - the return of people on social media crusading against making year-end donations to nonprofits with “high overhead”.
It’s November. The leaves are turning, the days are getting shorter, and you know what that means in the world of fundraising - the return of people on social media crusading against making year-end donations to nonprofits with “high overhead”.
The Overhead Myth, a name coined by GuideStar, BBB Wise Giving Alliance, and Charity Navigator in 2013, is the misguided notion that nonprofit effectiveness can be measured in part by the ratio of budget dedicated to general operating expenses including rent, utilities, benefits, and *gasp* salaries. Believers declare that they want to see their donations going to directly serve a charity’s clients or programs. But how do they imagine the work actually happens?
General operating support dollars are the most important to a nonprofit and often the hardest to come by. Operating support funds what is unsexy but necessary - how can a shelter or art gallery operate if there are no lights to turn on, or no one to turn them on?
It’s important for nonprofits to be honest about what it takes to accomplish your work in order for the public to truly understand the need. I am a big proponent of telling our clients to ask for what they really need - don’t adjust your fundraising goal so it sounds less intimidating, be transparent. And don’t subscribe to the idea that you have to keep your overhead as low as possible to be fundable. We must all advocate for competitive salaries in our industry in order to retain top talent and touting how little we pay the people in charge of achieving our missions does nothing to address these inequities.
We should be promoting how great general operating dollars are. Donors often ask what is most needed, and this is it! Nonprofits need funding that is flexible and can be used to support these most essential needs. And why shouldn’t an Executive Director or Education Coordinator make a reasonable salary? Without their time and talent, these life-saving programs wouldn’t happen in the first place.
So this end-of-year giving season if you see someone posting on social media saying not to donate to a certain nonprofit because of overhead, speak up! Vu Le has some great suggestions on How to deal with uninformed nonprofit watchdogs on his NonprofitAF blog.
We can all do our part to educate donors and advocate for what we really need.
4 Ways Nonprofit Leaders can De-Stress in Q4!
It’s that time of year- the time nonprofit leaders and their teams dread most!
It's that time of year- the time nonprofit leaders and their teams dread most... End of Year Giving Season! All you want to do is enjoy the holidays with family and friends, but there's this nagging, stressful task that you put off and put off until you just crank out the same old messaging as the year before. It's a chore for you and a bore for your audience.
So this year, give yourself a much-needed break, and let us take on this most maligned of mailings from start to finish. This includes GA Gives Day and/or your End of Year Campaign.
We have packages for organizations of all shapes and sizes. And if your goal is less than $10k, we have a special offering especially for you.
Bookings for 2022 have closed.
Check back with us in 2023 for new offerings!!!
Lara Smith on Making the Shift to Consulting from Nonprofit Life
As a type-A person, I’ve always been good at checking things off to-do lists. But how do we make sure we’re always working towards our legacy, as people, and as organizations? This is going to sound dark, but every year I write my obituary as a way to keep my why as a North Star. Five years ago, as I worked on it, I identified that it’s my purpose in life to help people and organizations reach their full potential. I have loved getting to do it at Dad’s, because I am able to have a deep impact on staff and a more shallow impact on every single person who walks through the door.
So when Susannah reached out to me last fall to see if I was interested in facilitating some board retreats for Purpose Possible, I jumped at the chance. I have been toying with the idea of being a consultant for (literally) years, but never knew how to dip my toe in the water. Working within the structure of an existing firm was extremely appealing because it meant I could try things out without a huge commitment on my part.
I always knew that when I left Dad’s Garage, I wanted to give the organization plenty of notice so that I could leave the organization in as stable a position as possible. I told the board of directors that it was time in October 2020. I thought I wanted another full-time job. I started looking. And at the same time, the number of clients I had in my portfolio increased.
As I reflected on the best way to reach my purpose, I realized that consulting would allow me to have a breadth of impact that wouldn’t be possible at a single organization. I can focus on the things I excel at and love (big picture thinking, coaching, storytelling) and work with clients that serve so many different constituencies.
Purpose Possible has been wonderful for me because there are so many other consultants that I can bounce ideas off of (coming from an improv theatre, I’m definitely used to working in groups!) and leverage expertise from. Purpose Possible has only been around for a short time, and yet I’ve already had the opportunity to work with twelve different groups. Their missions run the gamut from breaking the cycle of poverty using dirt bike culture to providing identification to individuals experiencing homelessness to bringing world class photography to Atlanta and everything in between.
In a world that feels increasingly specialized, I really didn’t know what I was going to do with my generalist background. In my eleven years of leading organizations, I learned a little bit about a lot of things. I can speak for a couple of minutes about topics ranging from City zoning codes to capital campaigns to professional development practices. I believe it’s a leader's job to hear the best idea, not to have it. And it’s a true gift to be able to leverage these skills every single day for the clients we serve.