Overhead in the nonprofit sector has been a hot topic for several years. For a long time the consensus said overhead was a pretty good measure of organizational effectiveness. Spending lots = bad; next to nothing = good! Entities focused on overhead to avoid bad ratings from Charity Navigator and other evaluators. Never mind what the group was doing, or that for one group overhead might, in fact, be programmatic expenditures: just have a low overhead ratio to keep the contributions coming!
Overhead as a measure has similar attributes to those we attach too often to government programs, albeit probably in reverse. More Medicare spending = good; cuts = bad. Maybe, though, money as a proxy makes not so much sense, and what we ought to measure are outcomes as a function of many factors, including money, time, the complexity of the problem, etc. Less might, in fact, be more!
Much has changed, and Dan Pallotta deserves a big chunk of the credit. Mr. Pallotta has run nonprofits, written books, and speaks across the country about the evils of measuring effectiveness by assumes dollars not spent improve outputs. Then there was the TED Talk, titled The Way We Think About Charity Is Dead Wrong. (At TED.com the talk has been viewed more than 3.2 million times.) His talk and his message have played a significant role in a rethinking about the whole overhead issue, and have caused evaluators to refine their algorithms. Overhead does matter, of course, as no organization—whether it’s a business enterprise, a charitable entity, or a governmental body—should spend for the sake of spending. That said, if a large nonprofit with more than $500 million in annual revenue pays its CEO $1,000,000 per year to manage the organization and with her leadership amazing things happen, do we really want to say there’s something wrong there?
Now, Mr. Pallotta has formed a group called the Charity Defense Council. Its mission? “To change the way people think about changing the world.” Ambitious, for sure, but we’re not getting the job done now, we haven’t been getting it done for a long, long, time, and rethinking the model—as opposed to finding a quick fix here or there—makes sense, at least to me.
So, why am I writing about this issue now, especially when I’m still on my self-imposed sabbatical? Well, to jump start the Charity Defense Council, raise some money, and make people aware of the mission, there’s a March on Salem. Salem is Salem, MA, with a start in Maine, and a walking distance of 60 miles. The dates are June 26-28, 2015.
I’m only thinking about going, as of now. (I’ve got some scheduling issues to work out.) To go, I need to raise $2995. (Enrollment fees and travel are my expenses, and if I do go I’ll kick in part of the $2995.)
Right now, I’m only testing the waters. I like the cause very much. (I am on the Council’s legal committee, and the trip is months from now.) I’m also willing to own up to the fact that I’d like to be able to walk 60 miles in three days when I’m closer to 58 than 57! And I’m always uplifted when I’m around people who are committed to changing the world, especially when they’re doing it one step at a time.
So I’m hoping you’ll watch the TED talk or go to the Pallotta or Charity Defense Council links and click. If the concepts make sense, and you think you’d be willing to help sponsor me, email me at firstname.lastname@example.org. No pledge required at this time, but a dollar estimate will help me measure support. And if walking from Maine to Salem interests you, let me know!
Thanks, and thanks for reading this post.