"Invest in good overhead"

"Invest in good overhead."

That is a direct quote from a Harvard Business Review article on "Delivering on the Promise of Nonprofits" that just arrived in my mailbox - the December 2008 issue, p 96. Available now in paper, not yet online.

Here are a few other key insights from the article:
"Realize that everything takes longer and costs more....Instead of placing appropriately sized bets on well-defined strategies, donors often spread too little money among too many recipients."

"....Philanthropy exists in a world without marketplace pressures....Nor do foundations go out of out of business because they miss their numbers...quite the contrary...mediocrity is easily perpetuated."
These insights are neither new nor groundbreaking. The debate over overhead costs has raged for years. Some may argue that market pressures are exactly what are needed and that they do exist, at least for some elements of philanthropy. What matters here is that these ideas are being featured in a leading piece in Harvard Business Review - which will matter to how they are perceived, how they are picked up by donors, and the heft they may begin to carry as ideas in the field.

"Delivering on the Promise of Nonprofits," Jeffrey Bradach, Thomas Tierney and Nan Stone, HBR, December 2008, pp 88 - 97.

1 comment:

Archana said...

It's great to see this issue getting coverage by you and in the HBR, which is hopefully read by many foundation executives. This was an issue I faced a great deal as a grantwriter in the past - how to explain the need for overhead as a way of sustaining the infrastructure that allows the programs to happen. And the overhead rate can really differ depending on the type of services provided - despite that, you often had standard overhead limits prescribed by the funders.