Any fundraising professional knows donors, board members or even staff who are obsessed with one particular figure: the overhead ratio. While that number is one measure of something, it’s often wrongly elevated to a degree of importance it doesn’t deserve. For many, it’s the metrics—that all important measurement—of “is the organization spending money wisely?” In fact, it’s not a good measure for that. Organizations with the best overhead ratios are often those shipping unhealthy food or almost-expired medicines to people who don’t necessarily need them.
But then, who made this metrics god? There are plenty of good reasons an organization may have a higher overhead ratio. Even so-called charity “watchdogs” have begun to acknowledge that the overhead ratio is not the only measurement of quality.
In this “Monday Movies for Nonprofits,” we hear from Peter Drury, Development Director of Splash, an organization focused on getting clean, safe water to vulnerable children. Drury says that there’s good overhead and there’s bad overhead.
Image: Creative Commons, DHD Money Gallery
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