Tackling the Overhead Myth: The True Cost of Meeting Our Mission

overheadmythAsk any nonprofit professional and they will tell you that one of the most often repeated mantras of working in the not for profit sector is “Sacrifice.” Philanthropic professionals are often asked to give up every day comforts that are often taken for granted in the for profit sector. Going home at 5:00? What is that like? Weekends? What are those? The latest advancements in technology? You mean like, mechanical pencils?

In the name of our collective causes and in order to keep our overhead costs low, we happily waive our rights to our potential productivity and, all too often, sanity. Add to that the funding challenges of our current economic climate and complications can quickly escalate, leaving the hard working staff of such charitable organizations feeling overwhelmed and under-appreciated  While making a difference involves personal sacrifice, it is important for us to seek the wisdom of that other age-old mantra made popular by well-known author on personal time management, Alan Lakein, “Work smarter, not harder.”

Jacob Harold, president and CEO of GuideStar, an information service specializing in reporting on U.S. nonprofit companies, stresses,“Nonprofits need to invest in their organizations to be able to effectively serve their missions.”

GuideStar has partnered with fellow philanthropic powerhouses, Charity Navigator and the Better Business Bureau Wise Giving Allianceto dispel the ongoing myth that the best way to judge the efficiency of a charity is by keeping the percentage of expenses that go to administrative and fundraising costs as low as possible.

Harold adds, “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.”

This doesn’t mean that funds should be funneled to purchasing the latest ergonomically correct office desk, or opening up a lounge outfitted with massage chairs and sleep pods like the pampered personnel over at Google.

By making more room in your organization’s budget for important investments in training, planning, evaluation, internal systems and fundraising your organization’s impact can be easily doubled while your staff’s skills can truly be afforded the time to shine.

Donor messaging plays a big part in this shift from the negative overhead mindset. Whether it is through a monthly newsletter, an annual report or social media updates , it is important to let your donors know that their gifts are being put to use to help further the mission of your organization.  The simple act of inviting board members to attend a training session or a planning meeting not only leaves them with a sense of feeling engaged, but widens the level of transparency between your organization and its funding members. But the messaging doesn’t stop there! It is also important to release follow up messages that show the results of these investments on the home front. Did that spiffy new office computer (purchased with donor funds) help you design some killer brochures? Let your donors know!

The act of working smarter and not harder doesn’t happen over night, and change tends to happen a little slower in the nonprofit world. But, through a combination of increased transparency and careful planning, you can make the investments you need to take the reach of your nonprofit to the next level.

The Facebook Generation

Last week, Facebook reached the 1 billion users mark. That means about 14 percent of the entire world population has a Facebook account. In the United States, more than 50 percent of Americans have a Facebook account.

In a recent blog post, Pan Dyer analyzes a report by McCann WorldGroup called “The Truth About Youth.” The report looks at how 16 to 30-year-olds interact with brands compared to previous generations.

Dyer writes:

The study (see below) revealed that the millennials are the first truly global generation, and that they are motivated by three things that exist in every in every society and drive behaviors:

  • The need for community (to connect with others and form relationships)
  • The need for justice (to achieve personal or social justice and do what’s right through activism)
  • The need for authenticity (to see things as they are)

Dyer lists the key findings from the study as:

  • The social economy has replaced the experience economy
  • Technology is indispensable
  • Truth is currency
  • Social justice is an important driver

From a marketing standpoint, Dyer lists the following as takeaways from the study:

Marketing Takeaways:

  • Brands should align their marketing efforts with what’s important to this generation.
  • Advertising should be genuine, truthful, sociable, mature, and humble in its efforts to create connections.
  • The biggest mistake marketers make is overestimating their own importance. Young consumers say they quickly tire of brands that fill up their social graphs with what they consider meaningless information.

Read Dyer’s entire blog post…