The past few months have been busy here at the Ad Council. Alongside a diverse group of community partners, we recently began working on a new campaign on the topic of caregiver respite, specifically for people caring for a loved one with dementia.
Caregiving is hard work. With more and more people with dementia receiving home and community-based care, the stress and health effects this causes for caregivers is significant. Caregivers need help, and we would love to have community members part of coming up with how we help them.
If you have a personal connection to the issue, feel like your experience could help arrive at a solution, or are just looking for a way to give back to your community–this is a great opportunity.
Ad Council partner, AARP, is hosting a caregiving listening session in September. Click here for more details and to register for this FREE session.
Ad Council staff will be there and we hope to see some of you, too!
Nonprofit Overhead: Setting the record straight.
July 9, 2013
Charities are often judged and graded based on the percentage they spend on overhead. It’s one of the first questions people ask when determining where to make a charitable donation—how much does X organization spend on administration/fundraising/staff? According to a survey by the BBB Wise Giving Alliance, American donors ranked overhead ratio and financial transparency to be more important attributes in determining their willingness to give than the demonstrated success of the organization’s programs.
Some people truly believe that nonprofits shouldn’t spend money on general operations—like infrastructure or staff training and development or technology. When in reality, organizations that prioritize these issues are much more likely to succeed and provide effective and sustainable programs for our communities. The Center on Nonprofits and Philanthropy at the Urban Institute agrees; a lack of resources for nonprofit capacity building leads to, among other things: high staff turnover, poor work quality, and limited ability to track outcomes.
Bear with me for a minute while I joyfully leap step onto a soapbox.
Why do we criticize nonprofits who take care of our most vulnerable community members (our children, our seniors, our neighbors who don’t have a home) or those who care for our most valuable resources (our city, our lake and river, our parks) for investing in the number one thing that makes them successful? Without well-trained and supported human resources behind these services, how can we expect them to make a difference? Dan Pallotta, the president of Advertising for Humanity makes a good point: “Our social problems are gigantic in scale, our organizations are tiny up against them — and we have beliefs that keep them tiny.” And he goes on to outline five ways in which nonprofits are stunted in their growth, including lack of funds for compensation, advertising, and marketing.
And what’s more, a Nonprofit Overhead Cost Study revealed that many nonprofits do not accurately report overhead figures because of the fear and loathing around indirect expenses. This not only perpetuates the myth of the true organizational costs, it sets a standard for the entire nonprofit industry that is unrealistic and detrimental to their success. Or as the Bridgespan Group calls it “A Nonprofit Starvation Cycle”.
Don’t get me wrong; transparency and fiscal management are very important factors when I make a personal donation. But to dismiss the results and success of an organization or make a decision based solely on a predefined (unrealistic) percentage? I don’t believe donors pull out their checkbook to invest in low overhead. However, I do think the conversation needs to change. Instead of indirect expenses, let’s talk about about high-impact community change. Now there is a standard against which nonprofits should be measured. We’ll all be better for it.
Fortunately, there is a growing movement in recognizing this “overhead myth.” America’s three leading charity evaluation agencies recently published an open letter to donors outlining their concern. Their message? That “in fact, many charities should spend more on overhead. 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.”
I commend these organizations – Guidestar, Charity Navigator, and BBB Wise Giving Alliance – for taking on this effort. It’s about time we recognize the true cost of doing good business. And more importantly, that we recognize the implications of underfunding our community’s most important change makers.
Sorry. Did I forget to step down?
– Beth Hershel
Director of Community Engagement, Ad Council of Rochester
Over Coffee 