Common Ground has just joined GuideStar, Charity Navigator, and BBB Wise Giving Alliance in the pledge to end the overhead myth. Instead of focusing on the percentage of charity’s expenses that go to administrative and fundraising costs—commonly referred to as “overhead”—we need to focus on what really matters: impact.
GuideStar, Charity Navigator, and BBB Wise Giving Alliance published an open letter to the donors of America denouncing the “overhead ratio” as a valid indicator of nonprofit performance. The letter, signed by all three organizations’ CEOs, marks the beginning of a campaign to correct the common misconception about the importance of a low overhead ratio.
The open letter, published on a new website overheadmyth.com, states that “Overhead costs include important investments charities make to improve their work: investments in training, planning, evaluation, and internal systems—as well as their efforts to raise money so they can operate their programs. When we focus solely or predominantly on overhead…we starve charities of the freedom they need to best serve the people and communities they are trying to serve.” The letter goes on to recommend that donors focus their attention on more relevant factors behind nonprofit performance: transparency, governance, leadership, and results.
Join me in spreading the word about this important topic. Nonprofits are encouraged to use the Overhead Myth letter in their donor solicitations or in any other way they choose—the letter is under a Creative Commons license and nonprofits are welcome to it for free and use it how they wish. You are welcome and encouraged to use this information on your own blog!
Let’s end the Overhead Myth TODAY! overheadmyth.com
