We use cookies to ensure that we give you the best experience on our website. By continuing to use this site, you agree to our use of cookies in accordance with our Privacy Policy.
Privacy Overview
Login
Your Role
Challenges You Face
results
Learn
Resources
Company
How to Answer the Question, "How Much of This Will Go to Overhead?"
Peter Drury of Splash.org tells us how to answer this challenging question.
He says to tell ’em, “Overhead is like cholesterol. There’s good overhead and bad overhead.”
Good overhead = Lights, phones, hard-working staff that produces results, etc.
Bad overhead = Waste
The MarketSmart take on this: Be thoroughly transparent about what you believe is good overhead and what’s needed. Tell stories about why and how your organization spends the donations it receives. Relate the stories to the mission you know your donors support. And, remember to tell folks what you are doing to cut bad overhead— waste. Be open, honest, and real about it. Everyone has waste. Acknowledge that you do too. But point out what you are doing to cut it and you’ll draw more big gifts from major donors.
The trick is to engage further and be transparent, not to skirt the issue or twist the numbers so you can get 4 stars from Charity Navigator.
You can take control of this issue if you remember that people who ask about your overhead are actually “leaning in”. They want to engage with you and learn more. So give them what they want… information. Tell them your story about overhead. Remind that that it’s necessary. Just like good cholesterol. And, finally, allay their concerns by telling them that their money is “going to the right places to have the greatest impact.”
LIKE THIS BLOG POST? PLEASE SHARE IT AND/OR SUBSCRIBE
Get the book!
Feeling like your job is getting harder because donor expectations have changed and competition for the charitable dollar is growing?
Finding that the old orthodoxies and conventions espoused by so-called experts in online echo-chambers and at conferences don’t work anymore?
Want to help more people make impact by facilitating their acts of philanthropy but feel like too many obstacles keep getting in your way?
Then this book is for you.
Engagement Fundraising was developed from the perspective of a donor who discovered firsthand that the impersonal, spray-and-pray approaches of his beloved charity were not only offensive but also wasteful and ineffective. So he took action. And now, you can too.
Get smarter with the SmartIdeas blog
Subscribe to our blog today and get actionable fundraising ideas delivered straight to your inbox!
I love this answer! I also like to teach donors to think of how much people in need would lose if, for example, we just didn’t pay the light bill. Having dealt with waste transparently the way is cleared to think of every bit of progress in lives as connected directly to the whole budget. Not just the “program” budget.
Thanks Betty, Becky and Jim! Wow… Jim… all the way from Australia!! Glad to have you aboard and thank you for sharing your insights!!
Honestly, I haven’t seen any I can think of off the top of my head (sadly). That’s why I wrote the post.
love this analogy! studies are showing donors of all kinds are willing to pay for overhead as they understand it is necessary. it is up to us as nonprofits to tell our story – this is a great way to do it and one all can relate to easily.
Terrific outline by Market Smart. We need to get out of the culture of being apologetic for investing in overheads, acquisition campaigns etc. The overwhelming downplaying of costs historically has led to false expectations by some donors that there are no costs or they are minimal, which of course is just plain wrong. Agree we need to be more active and positive about outlining investments and why it is necessary with the ultimate goal to grow dollars that make more of a difference to the cause. Bravo Market Smart, a cultural change is required here!
Jim Weber’
Director Fundraising Fixers
Melbourne Australia
Great analogy which I will be using. Do you have an example of an organization who communicates this well? None of us think we waste resources but it’s all a matter of opinion. Is investing in fundraising or marketing materials to get your message out a waste of resources? Some think so –