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by s1artibartfast 1484 days ago
>If I ran a charity and had an exclusive choice to either spend $X to raise $Y...

The common criticism of this hangs on how elastic the supply of donor dollars are. If you spend $1M to divert funds from another charity to yours, then the system overall is worse off.

This isn't a perfect model because donor dollars are not fixed, and all charities are not equivalent. reality lies somewhere in-between.

That said, it is all pretty irrelevant because there are lots of groups that evaluate charities on their overhead to benefit, so it is pretty easy to find one with low overhead if that is a concern.

1 comments

So part of the problem is the evaluation based upon low overhead …. What’s low overhead?

Everyone wants to donate to program work, but never to operations.

Even grants that carve out for operations aren’t always realistic.

Major gifts is one of the best ways to get unrestricted donor funds.

You can get a lot of information from the 990 filing of an organization.

In other comments, I agree that in many non profit organizations there are people who might not last in for profit.

Most of those people however are working in roles that are $30,000 , maybe $40,000 a year and there wouldn’t be someone in for profit who would take that role, for that amount of pay.

Overwork and burnout in the field is very real.

Unrelated to that staffing, I would again go back to operational expenses - rent, electricity, payroll etc. Depending on the nonprofit, this may be a huge percentage… but if you have an organization that has a $250,000 a year revenue, two staff to accomplish what their mission is…. What actually goes to program work might be very little.

It sounds like we agree. I dont have a fixed definition for low overhead.

I just know that im not interested if I see a non-profit with 50% marketing expenses, 30% in other operational expenses, and passes through 20% to the beneficiaries (e.g. medical supplies, research grants, or whatever the stated purpose is).

I would call that high overhead.

This sounds extreme, but some large non-profits actually have numbers like this.