Low overhead is a race to the bottomAre you still talking to your donors about overhead? Does your board operate on the premise of aiming for low overhead? Do you squeeze your budget to get the lowest possible percentage of overhead? If so, stop right now. Overhead is not an indication of impact. Low overhead is not a badge of honour. And by not educating donors about how an investment of their funds includes keeping the lights on, you’re doing them a disservice. Whenever we hear a donor say they want 100% of their gift to go to “programs,” and not to “overhead,” it means they don’t understand that most of an organization’s budget is for people. Those people run the programs! Or they raise funds to run the programs. Or they keep the books for the programs. And so on. And they deserve to be adequately compensated, and not work for peanuts just because they’re working at a non-profit. Concentrating on overhead is a race to the bottom. The less you invest in your organization, the harder it will be to do the work you’ve set out in your mission. Non-profit doesn’t mean “to starve an organization.” It means the “profits” are for the community’s benefit, not shareholders. So making sure the organization is on sound financial footing is very important. We all want what’s best for the community, and that requires investment for impact. So talk to your donors about how you’re making an impact by providing solutions to problems. Then ask them to join you in making a difference. – from our May e-newsletter – subscribe here. Julie Mikuska. · |
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