A new study from the Bridgespan group focuses on how many non profit organizations adversely impact their mission by not correctly funding their overhead costs. The study contains many valid points such as different types of non profits require different levels of overhead, and in most cases actual indirect costs are higher than budgeted. The key is to build a strong organization and to properly identify and fund indirect costs to enable the organization to effectively carry out its mission.
Key Takeaways:
- targeting on low overhead cost can actually hurt non-profits and have them lose efective focus on their mission goals
- indirect costs, what is meant by overhead are almost always much higher than expected sometimes as high as forty percent of the entire budget
- different non governmental organizations have much different needs. A one size fits all approach does not work. Overhead should be tied to the indivual organization
““All of us in the nonprofit ecosystem are party to a charade with terrible consequences—what we might call the ‘overhead fiction,’””
