Let’s Move Past The Overhead Conversation

In a recent Nonprofit Quarterly article, Curtis Klotz asks nonprofits and funders to “re-vision” nonprofit overhead.

“How we visualize our understanding of nonprofit structure and programs shapes the overhead debate,” he writes. “It’s time to get graphic about our new ideas—to deploy fresh images to help educate the public, our funders, and ourselves.”

Indeed.

In my book, Start Your Engines: Nonprofit Management Made Simple, I imagine the nonprofit organization as a car. Each tire represents the four functions: governance, administration, development, and programs. The concept is simple: when you don’t properly inflate each tire, you hinder the car’s ability to move forward.

When I go to an auto dealer, I don’t buy a tire, I buy the whole car. And, when I give to an organization, I do it because I believe in their ability to do what they say they’re going to do.

While I agree with Klotz that we need to reimagine how we see things, I think we need to move past the overhead conversation. Let’s start talking about the whole organization.

That’s where the conversation really needs to go.

Here’s what that looks like:

From Restricted to Unrestricted Dollars
What’s with the helicopter parenting, funders? If you believe in the cause and the potential of my organization, why not give me unrestricted support?

While we’re currently discussing how much should be spent on overhead, we should be discussing a nonprofit organization’s ability to do the work they set out to do.

Good talent costs money. Good branding that can change public perception costs money. Rent and electricity and staplers cost money. If I house every homeless person on the street but spend 50% on overhead, does it matter?

From Money to Resources
While many funders do provide additional help, and many nonprofits just want to get the money and get out, I think it makes sense for funders and nonprofits to work closer together. Let’s all share best practices, lessons learned, and connect each other to helpful contacts and networks.

The closer relationships that come about from these partnerships will also help reduce some of the “have and have not” dynamic that happens between these two entities.

From Reports to Discussions
Reports are for school. Let’s come together for in-person conversations about what went well, what didn’t, and how it can be improved upon. Hell, let’s even take a second to dream big together.

At the very least, can we just make this a 30 minute phone call where I tell you what happened and YOU write it down? The time and anxiety that is expended trying to put together these reports is too much.

From Silos to Collaboration
Speaking of too much time, funders need to work together as much as nonprofits do. You all ask very similar questions. Can we get a single grant form already? Or at least a form for all the basic questions? We’re wasting precious time here.

From Overhead to Problem Solving
This is the meat of the thing. We’ve been having the overhead conversation for years. And some things have changed. But there’s still way too much talk that boils down to “nonprofits can’t be trusted to run their business, so we’re going to micromanage what you spend on.”

And I get it. A lot of nonprofits can’t be trusted to run their business. But that’s a different problem to solve.

Because we all want the same thing here, folks. We want the world to be a better place. And the only way to do that is to work together and stop quibbling over funding issues. I think we can all agree that money needs to be spent on overhead. Let’s move on.

A Revisioning
Let’s move the conversation to the health of the whole organization.

Are all the tires inflated?

Can we get from A to B efficiently and effectively?

If not, where does the money need to go to fix it?

And how can we work together to win the race?

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