Some of my Best Friends are Overhead

What a week it’s been! After almost a month of in office work and a local conference, I packed up my 3-1-1 compliant bag and hopped on a plane to Boston. I coordinated a client visit in Wuh-stah (curiously spelled Worcester) with the NEDRA conference in Boston for a delightful three day excursion in New England. Before I get to my key observations on this week’s topic, I have some thoughts about the Wuh-stah/Bah-ston region as a Midwesterner:

  1. There are a TON of schools! Not just in Boston. There are 12 higher ed institutions in Worcester! My hotel was five miles from my client site, and I passed one higher ed institution on the way to my client (also higher ed). Amazing! I wonder if New Englanders are surprised when they go to towns where there are more McDonalds than colleges.
  2. Mile markers and exit numbers are totally unrelated in Massachusetts. You’ll be at mile 63 and you need to get off at exit 22. In my world, that means you have 41 miles to go (unless you’re changing highways or crossing into a new state). Yet Siri tells you you’re four miles from the exit. WHAT CRAZY MATH IS THIS?! Oh, it’s not math. There is no correlation between these two items. I have mentioned before that my dad is a transportation planner (hi, dad!), so I take highway logic very seriously. Can someone explain what is happening? Does this exist elsewhere in the US?

Observations aside, both cities were picturesque and I had a wonderful time. I stayed in a fancy hotel in Boston for the conference:

photo

At the end of the week, I relocated to Boston for the New England Development Research Association’s annual conference, Strategies for Success. NEDRA is a super-charged APRA chapter that includes all of the states in New England.

NEDRA was able to recruit Dan Pallotta as the keynote speaker. Dan was instrumental in creating the AIDS Rides, Breast Cancer Walks, and the Out of the Darkness suicide prevention walks in the 1990s. His most recent work has been to establish the Charity Defense Council. This is an organization that was created to “change the way people think about changing the world.” Dan explained that nonprofits are constrained by outdated rules in their efforts to create meaningful social change, rules that don’t apply to businesses. The primary challenge that Charity Defense Council is combating is dreaded Overhead Factor, or the idea that nonprofits must demonstrate that more than 75% or sometimes even 90% of what they spend goes towards direct service costs rather than administrative ones such as salaries or office equipment. Dan said this is dangerous for three reasons:

1. It makes us think overhead is not part of the cause. I don’t know about you, but when I worked as a development associate at a housing facility for homeless teens, I needed a computer to do my job. The Overhead Factor declares that the electricity required to run my computer should be labeled separately from the electricity required to run the computers in the homes of the teens the organziation housed.

2. It forces charities to forgo what they need to grow. Low overhead is fine if your organization plans on raising the same amount year after year. Is that a goal that any of us have? If we want to achieve loftier goals, we need to raise more money, and to do that, we need to invest in capacity building opportunities.

3. It gives donors bad information. I went shopping today and tried on two pairs of pants: one for $4.88 and one for $40. They had a lot in common: same brand, same size, same color. When I tried them on, the $4.88 pair felt and looked horrible. If I were making my decision on price alone, I would have been disappointed. Judging nonprofits based on their overhead expenditures alone does the same.

Dan’s speech, and the mission of Charity Defense Council, gave me a lot to think about. It made me proud to work in (and now for) the nonprofit sector. I loved the idea that we are reclaiming our missions by declaring that we owe it to society to put as much effort into preventing homelessness as Dairy Queen puts into selling ice cream. The most striking part of Dan’s message was when he revealed Charity Defense Council’s ad campaign:

charity-defense-council-ad

Be on the look out for ads like this in print, online, and on TV soon. If you agree with the mission, consider becoming a member. What do you think? Are you overhead?

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