Time to un-mis-educate donors about what efficiency looks like

The phrase un-mis-educate is coined by “J” in a post, Rethinking Efficiency, at AidSpeak.

J suggests one of the reasons NPOs (NGOs for my international readers) are under so much pressure on overhead ratios is that NPOs have spent a generation mis-educating donors that organization X is better than Y because 90% or 98% of donations to X go to program services.

I agree.

J says that NPOs need to undo the mis-education, thus the need to un-mis-educate donors.  I think that is a great turn of phrase.

In a well nuanced post, J acknowledges there is waste. Okay. Can we just agree there is waste and inefficiency in every organization?

More importantly, there are higher priority issues than whether it is possible to save a few bucks by buying cheaper or merely cutting the budget a bit or ending a project that isn’t showing progress this quarter.

Long term effectiveness should be more important that overhead ratios. I am learning this is also called sustainability (I’m new to this discussion, but am catching up quickly – maybe).

The goal should be to prevent future problems, or perhaps only do the project/development once instead of having to do it again it later. Perhaps ending the problem being addressed is more important than improving this year’s overhead ratio.

J has three recommendations, of which I will only quote the first sentence:

1) Re-educate the public about overhead.

2) Focus on achieving critical mass, rather than minimum cost.

3) Organizational discipline in maintaining mission focus.

Check out the full post for J’s great comments.

I’ve seen variations of this idea recently: Here’s three more important questions than ‘what’s the overhead ratio?’  What is an organization trying to do, is it making progress toward that goal, and how does it know that progress is being made?

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