Perspectives on Nonprofit Financing and Fundraising

With all the attention being paid to nonprofit fundraising, it can be difficult to know where to look for more information. To help your organization start a broader conversation about its fundraising efforts and general practices, browse through these nonprofit financing and fundraising perspectives.

The Debate about Fundraising Expenses & Overhead

Deeply Flawed ‘Pennies for Charity’ Report Can Hurt Good Nonprofits

BoardSource CEO Anne Wallestad explains why a recent report is based on a number of assumptions about fundraising that are flawed.

Read more (Chronicle of Philanthropy)


The Overhead Debate: Charities Risk Widening Rift With Donors Over Administrative Costs

Commentary on the current debate and the risk of alienating donors by dismissing concerns about overhead and fundraising costs.

Read more (Chronicle of Philanthropy)


Why Can’t we Sell Charity Like We Sell Perfume?

Perspectives from Dan Pallotta, a major influencer in the ongoing debate about fundraising expenses, who takes the stance that it shouldn’t matter how much we spend on fundraising, as long as it means that an organization has the resources it needs to fund its mission.

Read more (Wall Street Journal)


Nonprofit Inquiry Thrusts Fundraising Costs Into the Spotlight

Introduces some of the complexity in measuring fundraising effectiveness, and the risks of a hyper-focus on cost ratios.

Read more (Chronicle of Philanthropy)


Stop Starving Scale: Unlocking the Potential of Global NGOs

“Generous funders have fueled the spectacular growth of global NGOs in recent years. But the money comes with strings that thwart these organizations’ ability to create the platforms for scale needed to solve global problems.”

Read more (The Bridgespan Group)


Pay-What-It-Takes Philanthropy

“A new grantmaking approach is needed—one that provides enough money for nonprofits to pay for all their operations, not just programs and services. The first step toward achieving that is for grantmakers to realize that different types of nonprofits have different cost structures.”

Read more (Stanford Social Innovation Review)


Charity Watchdogs and What Your Nonprofit Can Do to Put Its Best Foot Forward

“Charity watchdogs” are looking at your Form 990, website, financial statements, and other documents to determine your effectiveness. Who are these watchdogs, and why are they watching? Most important, what can your nonprofit do to put its best foot forward to avoid misinterpretation and address what some consider flawed evaluation processes?

Read more (BoardSource)


How Nonprofits Persuade Their Boards to Spend More on Fundraising

Sixteen charities in the San Antonio Nonprofit Council recently paid $3,300 for a short video making an unusual pitch: They want to spend more on administrative costs. “It helps when we have the people and the supplies we need to carry out the program,” says one woman from a literacy group. “It’s not overhead, it’s the cost of the program.”

Read more (Chronicle of Philanthropy)

Nonprofit Overhead

The Overhead Myth

The Overhead Myth is a false conception that financial ratios are the sole indicator of nonprofit performance. In 2013, GuideStar, BBB Wise Giving Alliance, and Charity Navigator wrote an open letter to the donors of America in a campaign to end this idea and focus donors’ attention on what really matters: nonprofits’ efforts to make the world a better place.

Read more (


The Nonprofit Starvation Cycle

“A vicious cycle is leaving nonprofits so hungry for decent infrastructure that they can barely function as organizations—let alone serve their beneficiaries. The cycle starts with funders’ unrealistic expectations about how much running a nonprofit costs, and results in nonprofits’ misrepresenting their costs while skimping on vital systems—acts that feed funders’ skewed beliefs. To break the nonprofit starvation cycle, funders must take the lead.”

Read more (Stanford Social Innovation Review)


Understanding Overhead: A Governance Challenge for Nonprofit Trustees

“We hope that this report, intended as a companion piece to our earlier report, ‘Risk Management for Nonprofits,’ will help trustees better understand this important issue and thereby be more effective in exercising their oversight and governance duties.”

Read more (SeaChange Capital Partners)


Results Are Us

“Efforts to measure charity effectiveness by impact, not overhead, are growing. But how do you define impact?”

Read more (Chronicle of Philanthropy)


How Funders Can Help Overcome the Overhead Myth

Among the many myths that pervade the nonprofit sector, the Overhead Myth is perhaps the most destructive. It is the erroneous idea that nonprofits must keep their fundraising and administrative costs cripplingly low, which leads to anemic organizations that are not as effective as they could be.

Read more (Center for Effective Philanthropy)


Overhead’ Spending Has Little Impact on Giving, Study Suggests

The findings suggest that donors’ concerns about high administrative costs of nonprofits are overhyped, and that the levels have little impact on giving decisions.

Read more (Chronicle of Philanthropy)


Nonprofit Business Models & Financing

The Looking-Glass World of Nonprofit Money: Managing in For-Profits’ Shadow Universe

Not only are nonprofit rules that govern money—and therefore business dynamics—different from those in the for-profit sector, they are largely unknown, even among nonprofits and their funders. Or at the very least, they remain unacknowledged and unspoken. Some say they are a closely guarded secret. Even when revealed to for-profit cognoscenti, they are so at odds with the listeners’ familiar world as to prompt confusion, disbelief, and related feelings of cognitive dissonance.

Read more (Nonprofit Finance Fund)


How Nonprofits Get Really Big

“Since 1970, more than 200,000 nonprofits have opened in the U.S., but only 144 of them have reached $50 million in annual revenue. Most of the members of this elite group got big by doing two things. They raised the bulk of their money from a single type of funder such as corporations or government – and not, as conventional wisdom would recommend, by going after diverse sources of funding. Just as importantly, these nonprofits created professional organizations that were tailored to the needs of their primary funding sources.”

Read more (Stanford Social Innovation Review)


Business Planning for Nonprofits: The Organizational and Leadership Benefits

“The Bridgespan Group draws on client experience to illustrate the key components of the business-planning process. They share some practical tips about getting started and also describe a typical written plan.”

Read more (Bridgespan)


Fundraising Effectiveness Project

Research and tools from AFP and The Urban Institute help nonprofit organizations track and evaluate their annual growth in giving as a result of their fundraising efforts.

Read more

The Full Cost of Nonprofit Programs

Common Problems in Government-Nonprofit Grantmaking and Contracting

“Research consistently finds that governments are not always good partners with nonprofits, with many governments routinely failing to pay the full costs of the contracted services, imposing unnecessary and wasteful burdens, and not honoring their legal obligations of the written contracts they signed — all of which add unnecessary costs to governments and nonprofits alike.”

Read more (National Council of Nonprofits)


Connecting the dots between the health of nonprofits and the health of communities

Achieving long-term financial sustainability was reported as the #1 financial challenge for nonprofits participating in the NFF 2015 State of the Sector survey. What is contributing to this challenge? For anyone aware of the severity of government funding cuts all around the country it is no surprise that the vast majority (76%) of nonprofits surveyed by NFF reported an increase in demand for their services for the seventh year in a row.”

Read more (National Council of Nonprofits)

Trends and Changes in Nonprofit Fundraising

Ensuring Sustainability with Diverse Revenue Streams

“With the changing landscape of philanthropy, sustainability of our organizations has never been more critical. In keeping an eye on the diversity of your organization’s funding, you can enhance your ability to weather changes and continue to find success toward achieving your mission.”

Read more (Giving USA)


One Large Donor or Lots of Small Ones—What Does Your Nonprofit Need?

“According to a November 2016 report from the Institute for Policy Studies, between 2003 and 2013, charitable deductions by people making over $100,000 rose by 40 percent, but they declined by 34 percent for those making less.”

Read more (Nonprofit Quarterly)


Turning Down a Big Grant – and Loving the Result

“A half-million dollars was on the table, a one-year corporate grant that likely would be renewed many times over. Yet when the donor balked at covering overhead costs, Communities in Schools did what it once might have considered unthinkable: It said, ‘No, thank you.’”

Read more (Chronicle of Philanthropy)


Stanford Hangs Up on Telemarketing — Will Others Follow?

“Stanford ending student run call centers as they see declining returns on the investment.”

Read more (Chronicle of Philanthropy)


Flush from first N.Y. gala, Hirshhorn decides to throw a party there every year

“The Hirshhorn Museum and Sculpture Garden took some flak last fall when it held its 40th­anniversary gala in New York and not in Washington. But the glitzy fundraiser was so successful that the museum has decided to make it an annual event.”

Read more (Washington Post)


Shutting Down the Party

“Tennessee charity SRVS, which helps people with disabilities, trimmed its slate of annual fundraising events.” Will thinking outside the box improve results?

Read more (Chronicle of Philanthropy)