More good stuff on overhead ratios and impact 8/5

Here are a few more articles in the ongoing conversation of overhead and the “worst charities.”

Good discussions are developing on the Alliance for Charitable Trust Linked-In group. That’s where I found two of the following articles.

3/24 – Skoll world forum – Reimagining the ‘overhead’ debate– Article provides an example of full costing instead of ‘overhead’ ratios. The organization calculated the grand total of cost for their program in Malawi is $885,767. They then provided three paragraphs explaining what that $886K accomplished. Great illustration of outputs with several outcomes included in the narrative instead of a supporting services ratio. Donors can make their own decision whether that program deserves their support.

7/30 – GuideStar – Clearing Up the Myth about GuideStar and the Overhead Ratio – Cournety Cherico has a fun rant explaining that GuideStar has never advocated looking at so-called overhead ratios as a guide for evaluating charities. She says that for about 20 years GuideStar has advocated using overhead ratios to evaluate a charity against itself over time and to compare a charity to those that are similar in terms of size, location, program, and mission. Sounds like a superb idea.

I use GuideStar a lot.  After I read her article, I tried to remember anytime anywhere that I had seen GuideStar even call attention to overhead ratios. I can’t recall seeing that ever. I don’t recall seeing any ‘ratings’ from them at all.  If they do, it is so low-key I’ve not noticed it.

5/3/13 (a year old but I just saw it) – World Resources Institute – Evaluate Non-Profits on Impact, Not Overhead. Another great article saying the focus should be on impact. The “overhead” is those items needed to support the program efforts.

Author suggests a 25% safe harbor for supporting services. I like that idea. Doubt it will ever take off, but I like it.

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