There are many ways to define success for a nonprofit. At the heart of a nonprofit’s operations are, of course, its mission. How many people are being cured? How many trees are being saved? Kids being taught? Lives being changed?
There are so many more components to the success of a nonprofit. Lately, there has been great discussion in the sector surrounding overhead costs. Aptly called the overhead myth, this conversation points out the narrow-minded nature of assuming that overhead costs don’t equate to productivity. Of course we can all agree that super high overhead costs that are out of control are inappropriate, we should also all agree that some administrative costs are essential for nonprofit organizations to run efficiently and effectively. In order for an organization to succeed, it must have good systems and processes, no matter whether nonprofit or for-profit. It’s a balancing act. I whole-heartedly agree.
I recently came across this blog post on Philanthropy News Digest (a service of the Foundation Center) that takes the argument to the next level. The author states that while it is important for us to continue the overhead myth conversation, it’s essential to also consider what she calls “nonprofit resiliency.” She makes the bold statements that not only must nonprofits do good work and have efficient operations, but they also must take risks and develop innovative new approaches. I absolutely love the suggestions and points she makes in the post, and I strongly recommend it.
“While nonprofits bear responsibility for communicating their true, comprehensive financial resource needs, funders can lead by encouraging business models that reliably cover full costs and supporting capital structures that are sufficiently liquid. Our sector’s ability to truly solve pressing social challenges hangs in the balance.” – Rebecca Thomas, Nonprofit Finance Fund