Please share this quick video and help create more conversation on the funding nonprofits need to make a significant impact. Titled, "If We Want Our Funding to Change the World..." the video is only 1 minute and 40 seconds. We hope you will post about it and forward it to colleagues in the philanthropic and nonprofit community.
Use the video to have real talk about real costs in your organization! Download a guide to get ideas on how to use the video to start a conversation.
- Video Discussion Guide for Nonprofits + Funders (PDF)
- Video Discussion Guide for Nonprofits (more ideas specifically for nonprofits!) (PDF)
As part of a campaign entitled, The Overhead Myth, chief executives from GuideStar, BBB Wise Giving Alliance, and Charity Navigator published a letter condemning the use of administrative expenses as the measure of nonprofit performance.
“The Nonprofit Starvation Cycle” - Ann Goggins Gregory and Don Howard call for funders to take the initiative in sufficiently providing for grantees’ infrastructure costs in this seminal article published in the Stanford Social Innovation Review, Fall 2009.
“Straight Talk in Mixed Company” - A follow-up to “The Nonprofit Starvation Cycle” suggesting increased collaboration between funders and nonprofits on overhead.
Videos via The Bridgespan Group’s Give Smart website -- These videos provide some of the strongest and clearest articulations of when general operating is the right answer and when restricted grants are --and the role that adequate overhead funding plays in the grant.
Dan Pallotta: The Way We Think About Charity is Dead Wrong (video), TED Talk, March 2013.
“Treatment and Reimbursement of Indirect Costs Vary Among Grants, and Depend Significantly on Federal, State, and Local Government Practices” – This in-depth research report from the Government Accounting Office reviewed gaps in terminology, classification, and reimbursement of overhead costs in government grants.
“Costs are Cool: The Strategic Value of Economic Clarity” - The authors of this report suggest that nonprofits need better financial data in order to make strong operational decisions.
“Nonprofit Cost Analysis: An Introduction” - The Bridgespan Group provides a toolkit for nonprofits to use in analyzing their direct and indirect costs.
StrongNonprofits.org, a new website in 2013 featuring free tools, guides, and more, aims to help nonprofits build their financial muscle. Developed in partnership by Fiscal Management Associates and The Wallace Foundation, special features of the site include a five-step guide to budget development, budgeting and financial planning tools, and a guide to effective board leadership.
A related resource, Fiscal Fitness for Nonprofits, produced by The Wallace Foundation– a member of Donors Forum and provider of grant support for its work -- examines good financial practices, including the funding of overhead, for a group of Chicago nonprofits. Fiscal Management Associates (FMA) was a partner to The Wallace Foundation in this project, and Amy Gudgeon, formerly with FMA, used FMA’s experience in the Wallace project to help inform her participation in Donors Forum’s Community of Practice, which preceded the March 12 convening.
Money Matters: The True Cost of Running Nonprofits (video) - In this video from Grantmakers for Effective Organizations, nonprofit executives talk about the struggle involved in keeping their organizations adequately funded.
Is Grantmaking Getting Smarter? A National Study of Philanthropic Practice - This national field survey from Grantmakers for Effective Organizations (GEO) examines some of the key shifts in grantmaking practice, including trends in general operating, capacity building and multiyear support, and what they mean for supporting nonprofit resilience.
On The Money - This publication from Grantmakers for Effective Organizations (GEO) highlights the financial challenges nonprofits face and the ways in which grantmakers are both improving the situation as well as perpetuating the problem.
General Operating Support: A GEO Action Guide Vol. 1 - A report inspired by a spirited discussion on GEOList among members of Grantmakers for Effective about general operating support, its limitations, and its advantages.
Assessing the Impact: General Operating Support Vol. 2 - A presentation from Grantmakers for Effective Organizations (GEO) of two approaches in assessing the impact of general operating support grants: one that emphasizes pre-grant assessment and one that relies more on assessment during and after the grant.
Excellent resources from the National Committee for Responsible Philanthropy, which has long been a leading voice on this topic.
Overhead Costs: The Obsession Must Stop by Julie Brandt, Stanford Social Innovation Review, Oct 3, 2013. "When it comes to charitable giving, there will always be skeptics who question where the moneyreally goes—and donors who object to a charity using their gifts to cover overhead. This skepticism is misplaced. Nonprofits are businesses and, as they grow, they must invest in their infrastructure to survive, retain employees, and, ultimately, succeed at their mission."
Real Talk About Real Costs Graphic Facilitation