The era of “overhead” is, well, over.
Today, Guidestar, BBB Wise Giving Alliance, and Charity Navigator have issued a joint letter declaring:
The percent of charity expenses that go to administrative and fundraising costs—commonly referred to as “overhead”—is a poor measure of a charity’s performance. We ask you to pay attention to other factors of nonprofit performance: transparency, governance, leadership, and results.
This declaration of sanity is accompanied by its own website, overheadmyth.com, and a campaign to get the word out.
Talent Philanthropy Project endorses this important statement by the three major nonprofit data shops and watchdogs. We believe this shift in thinking must sink in amongst individual donors as well as institutional contributors, including foundations and government agencies.
In fact, we believe funders should intentionally invest in and nurture nonprofit leadership and talent development in order to ensure and bolster the high-quality performance and impact they seek from the nonprofit they support. For tangible examples of how funders can invest in grantee talent, we recommend the eight case studies created by Emerging Practitioners in Philanthropy (EPIP) and Putnam Community Investment Consulting in 2012.