Down With the Overhead Pie Chart!

You know what I’m talking about, the pie chart you see on annual reports from nonprofits all the time that show a lot of money going to “programs” and a small slice going to “overhead” and “fundraising.”

I’m not endorsing violence, but if you give me a scissors I will cut this graphic out of your annual report for you.

Stop Using Overhead Charts.

Or even better – don’t start. Why?

These visuals control the way people think about how nonprofits use their funds. A pie chart like this highlights administrative and fundraising costs as OPPOSED to the programming costs. It encourages us to shrink the “overhead” to the smallest possible slice of the pie.

But that’s not how we should be thinking about it.

And as soon as you say less than 100 cents of every dollar goes to programs, donors no longer want your organization to spend money on CRUCIAL infrastructure. The back office does NOT take away from the mission, it makes the mission happen and it safeguards donor resources.

Yes, we want to be wise how we spend our funds. But building a strong, sustainable organization requires a strong administration.

Core Mission Support is Vital to the Success of Every Organization.

Curt Klotz talks about these ideas in his awesome article in the Nonprofit Quarterly, A Graphic Re-visioning of Nonprofit Overhead. He calls these back office costs “Core Mission Support.” And really, that’s what it is.

Programs don’t run themselves. Nonprofits are still businesses, and smart investments in core mission support advances the mission. So don’t teach your donors that the ideal nonprofit has 0% of funds going to overhead. Show them how their funds are going towards creating a sustainable organization that makes a real difference in the community.

Down with the old pie chart!!

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Birken Law Office – Law firm serving nonprofits organizations, and foundations – Birken Law

Birken Law Office – Law firm serving nonprofits organizations, and foundations – Birken Law

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