Recently, the leaders of BBB Wise Giving Alliance, GuideStar, and Charity Navigator issued a letter to correct a popular misconception of how charities should be measured.
For many years, the percentage of a charity’s budget spent on administrative and fundraising costs, the “overhead,” has been considered the crucial measure of a charity’s performance, to the exclusion of many others.
While cost efficiency plays an important part in an organization’s effectiveness, these three organizations, all in the business of vetting charities, have determined that as a measure of a charity’s worthiness, “overhead” is a poor indicator. In fact, some charities would be more effective in their work if they could spend more on “overhead.” When charities invest more in training, internal systems, and other administrative functions they are usually able to improve their services and make them more widely available.
Please visit The Overhead Myth. There you can read the letter and its supporting statistics that make the case for not relying solely on a charity’s administrative expenses when deciding whether to donate or not. We also ask that you sign the Pledge to End the Overhead Myth! to support the campaign to end the myth.
Vickie Mauldin CEO, FCEF