Donors need to move beyond The Overhead Myth

Three leading nonprofit sources launch campaign to correct misconception

OMI wanted to share with you an important letter directed to the donors of America from the country’s leading sources of information on nonprofits.  The Better Business Bureau Wise Giving Alliance, GuideStar and Charity Navigator have joined forces to denounce the myth that judging a nonprofit by their overhead ratio, usually an organization’s administrative and fundraising costs, is a valid indicator of their performance.  This letter is signed by all three of the companies’ CEOs and it kicks off The Overhead Myth Campaign which aims to correct this common misconception.

So many times donors are erroneously guided to give to organizations that have low ‘overhead’, as that is what the media tells us is the mark of a good charity.  As a fundraising partner to the Who’s Who of national nonprofits we hear this often at InfoCision.  However, in the nonprofit world overhead can encompass many crucial investments, such as administration and fundraising, that not only help an organization sustain itself and run efficiently, but also be successful in growing and carrying out their mission.

When we focus predominantly on overhead, we can create what the Stanford Social Innovation Review calls “The Nonprofit Starvation Cycle.” By underfunding ‘overhead’, charities starve themselves of the freedom they need to best serve the people and communities they are trying to help. 

The letter concludes with urging donors to consider the whole picture when deciding which charities to donate to citing those served by the organizations need high performance more than just low overhead.  We couldn’t agree more.

Partnering with the nation’s leading nonprofits

Here at InfoCision we work with the nation’s top nonprofit organizations, which consciously choose to be good stewards of the funds entrusted to them. We are proud of the work we do in helping charities carry out their important missions. We not only help them raise money to help sustain their programs, but we also help to increase the number of donors involved; a key to sustaining themselves in serving millions of people around the world. We are honored our clients entrust us with such an essential function and hope this letter and campaign will educate and empower donors everywhere to support charity based on the results an organization produces , and not just their ‘overhead’.

This subject seems to be gaining attention from the media.  Our Friend Dan Pallotta has been very vocal on the issue.  And, with the release of this letter from highly regarded organizations like the BBB; could there be a movement under foot?  We can only hope.

I encourage everyone to help spread the word to end The Overhead Myth!  www.overheadmyth.com

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