Friday, July 31, 2009

The "Admin" line item in Nonrprofit budgets

I seem to be in a rut of no origional posts--just references to interesting things I've found. Well, here is another one.

Nancy Lubkin has another great column in Fast Company in the July issue: "Why Overhead Isn't Evil in the Non-Profit World."

She takes on all those online "giving guides" nonprofit management "guidelines" and foundation biases that say "Overhead is bad. You need to spend at least 88% of your money on programs." A couple great pieces from her column:
"Let's take an example from the for-profit world, which isn't so squeamish about overhead. According to Apple's Q4 2008 report, 78% of its expenses were sales, general, and administrative -- the corporate equivalent of overhead. Seventy-eight percent! Yet nobody flinches. Keep spending, Steve Jobs! Your products rock!"
"Stop obsessing about overhead. You can't assess an organization on one statistic. Instead, focus on effectiveness. That's a harder story to tell and a trickier thing to measure. But that effort is what everyone ultimately wants -- a good investment."
Please read her column!

No comments: