Throughout the duration of this course, and within the real world, it can be easy to demonize overhead spending in non-profits. Donors want the emotional benefit of their dollars being spent directly on goods or services for clients. Isn’t this direct measure of spending, with as little overhead as possible, the best way to support the cause? Our authors grapple with the same questions. On the one hand, we see Booker T. Washington, committed to a life of poverty as the effective CEO of Tuskegee Institute in his nonprofit and fundraising pursuits. He uses rhetoric that appeals to donors desire for low overhead, utilizing the labor of students rather than outside professionals and touting his cost cutting measures that allow donations to go directly to the cause itself. Contrastingly, we experience Jane Addams of Hull House. Though challenged by outsiders for her privileged lifestyle, and internally conflicted by the ways she reconciles her lifestyle with the poverty of those she serves, Addams ultimately decides that overhead is not a bad thing. Her upper middle class lifestyle allows her to interact with politicians and large donors, raise more money, receive guiding education, and ultimately expand and lead her organization in more effective ways than would have been possible without the “overhead.” So the net result was money and growth.
As a class, today we experienced the TED talk, “The Way We Think About Charity is Dead Wrong.” In it, Dan Pallotta challenges the ways in which donors unintentionally suffocate organizations by demanding virtually non-existent overhead costs. He points out two ways in which consumers hold non-profit and private organizations to contrasting standards. The lies of overhead ultimately: 1) make us think that “overhead” is not part of “the cause” and 2) forces charities to forego what they need to grow. I would recommend the talk (linked to this blog) to anyone active within the philanthropic world, as a donor, volunteer, or member of an organization. Ultimately, the next time you find yourself in a situation to give, think twice before using low overhead as an indicator of an organization’s success. Unknowingly, you may be stifling the growth, innovation, and scale of an organization you truly care for.
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