End the Overhead Myth

The Hunger Project has joined GuideStar, Charity Navigator and Better Business Bureau (BBB) Wise Giving Alliance in a pledge to end the “Overhead” myth. The campaign aims to correct the common misconception that the percentage of a charity’s expenses that go to administrative and fundraising costs — commonly referred to as “overhead” — is an appropriate metric to evaluate when assessing a charity’s worthiness and efficiency.

The Hunger Project echoes the stance of the three leading sources of information on nonprofits and asserts that the “overhead” ratio is not appropriate to consider when determining if a nonprofit is effective or efficient. Instead of focusing on “overhead,” we need to focus on what really matters: impact. It’s about nonprofit results – not administrative expenses!

In June 2013, GuideStarCharity Navigator, and BBB Wise Giving Alliance published an open letter to the donors of America denouncing the “overhead ratio” as a valid indicator of nonprofit performance. Read this open letter to donors.

Subsequently, over 150 journalists and bloggers have cited the Overhead Myth campaign in their coverage.

In response to donor expectations and funder requests, the nonprofit sector, has often incorrectly focused too heavily on overhead over the past few decades, which has starved some nonprofits from investing in themselves as enterprises and created what the Stanford Social Innovation Review calls, “The Nonprofit Starvation Cycle.”

The Hunger Project is proud to be placing importance on investing in itself while continuing to keep costs low and sending most of our funds to programs. Join us as we help End the Overhead Myth.