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


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)

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 (overheadmyth.com)

 

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)

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


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)