guidestarblog_header.png

Why Is Overhead Expected in the For-Profit Sector, but a Punishable Offense for Nonprofits?

How the perception of overhead is hurting the causes we love

Somewhere along the way, our society decided to think differently about overhead in the nonprofit and for-profit sectors. This decision did not consider the consequences and how it can negatively affect the organizations that could change the world. Why is it that we consider helping people to be worth less compensation, and that a career that helps no one should be worth over double the salary? How can nonprofits scale, and therefore expand their causes, when they are expected to forego investment? Wouldn’t we prefer that a cure for cancer be found, or every person on Earth have clean water, no matter how much the organization spends on administration?


Charity Navigator and GuideStar: Working Together to Move Beyond Overhead

When I am asked about Charity Navigator I often joke that they are a “frenemy” of GuideStar. But the truth is that they are a friend. We’ve worked on projects together and have an amicable relationship. Our two organizations joined with the BBB Wise Giving Alliance in 2013 to launch the Overhead Myth campaign, a collective attempt to shift the conversation about nonprofit performance away from financial ratios ... and toward programmatic results.


Better Understanding Business Models in the Nonprofit Sector

In talking with the leaders of nonprofit organizations across the sector, there is a single truism that undergirds all of our conversations: limits on overhead create a pressure that deeply impacts the choices and tradeoffs leaders wrestle with every day. At Bridgespan, we have spent the last decade hearing this story from nonprofit leaders, and in turn, working with funders to counter the “overhead myth.”


Evaluating Charities in the Age of Online Ratings

I serve as liaison to the BBB Wise Giving Alliance, nonprofit information portals like GuideStar, charity evaluation groups, and the Combined Federal Campaign, all on behalf of Partnership With Native Americans (PWNA). Serving for more than a decade in these roles, one thing has become very clear: many donors do not realize there is no shortcut for making wise giving choices.


Is Your Nonprofit Planning to Fail?

GrantStation conducts a semi-annual survey on the State of Grantseeking™, with responses ranging from 2,900 to 3,300 nonprofit organizations, educational institutions, and government entities. Based on these response rates (and as always, a heartfelt thank-you to the participants) I have confidence that the data is a fair reflection of trends at the grassroots level.


Nonprofits I Love: GuideStar

Editor's note: We were humbled yesterday to read a message from Dan Pallotta identifying GuideStar as a nonprofit he loves. We're excited that he's excited about our mission and thank him for allowing us to share his kind words here.

Hi Everyone,

I have seen the future of philanthropy and it is GuideStar. They have the potential to transform the world’s relationship to giving.


How to Deal with Uninformed Nonprofit-Watchdogs Around the Holidays

Around this time of the year, we nonprofits work to bring in year-end donations, incurring paper cuts and envelope-tongues in the process (seriously, the glue stick is your friend). Around this time also is when people start pushing “guides” about which nonprofits to give to, warning of shady nonprofits that spend too much on “overhead” and leave nothing for the people they are supposed to be serving.


How Funders Reduce “Nonprofit Starvation” with Tech Funding & Data Best Practices

Between the oft-cited “nonprofit starvation cycle” and a movement to debunk the “Overhead Myth” that holds many in philanthropy back from supporting nonprofit operational expenses, it can feel like the state of nonprofit funding today is grim.

We think that powerful examples of best practices can help turn the tide. So let’s talk about what’s going right. Some leading funders are increasing nonprofit capacity and supporting critical operations in key ways. 


GuideStar's 6 Tips for Busting the Overhead Myth


More than ever before,
the people on the front lines of
social change are in agreement: we need to evolve the conversation about nonprofit overhead. It's time to reduce the Overhead Myth's stranglehold on donors, the media, and the general public.


Donors Don’t Want Their Gifts Spent on Overhead … Or Do They?

 

“Overhead” can be a dirty word in nonprofit circles. It’s typically referred to as the costs associated with actually running a nonprofit – administrative costs, fundraising costs, staff costs, etc.


 New call-to-action