Tuesday, August 16, 2016

Visualizing the Overhead Costs Issue

It’s been great to see the movement over the last several years in the overheads costs discussion. Watchdog groups and others have come out saying that overhead costs aren’t a good measure of impact, and more and more research shows that charities and nonprofits investing in infrastructure and overhead—human relations, board support, technology, and other direct and indirect expenses—can be quite successful and well positioned for future success.

But we still have a long way to go in communicating our argument to the giving public. The idea that overhead and fundraising costs somehow measure impact and success seems to be deeply ingrained in many donors, government officials, the media and others.

Ask any marketer—as strong as our arguments are, sometimes you need something simple, something visual, something that gets quickly and easily to the core of your idea.

That’s why I’m really impressed with Curtis Klotz’ recent blog about new ways to “visualize” the overhead costs issue. Instead of the standard pie chart, where fundraising and administrative costs fall into their usual slivers of the budget, his concentric circles demonstrate how every project and program charities run are dependent upon all types of costs and overhead. We see the true costs of programs in a very quick way that’s easy to take in.

I hope this sort of visual catches on, and I encourage you and your organization to consider using it. It’s representative of the sort of innovative thinking we need as we work to educate people about overhead costs and other tough, yet important issues.