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Keep the Change...  a monthly shot in the arm for your fundraising
March 2013
Hello! 

I've seen lots of people posting and retweeting Dan Pallotta's TED Talk -- The way we think about charity is dead wrong -- from earlier this month. I agree with much of what he has to say, particularly the part on so-called overhead.

Listening to him got me all fired up (again) about how our ability to raise enough money to tackle the huge social problems facing us is highly compromised by our drive to spend as little money as possible finding those very resources.

Something has to change. Or nothing is ever going to change.

More thoughts on this below...

Thanks for listening,

   Tina  




Tina Cincotti

Funding Change

P.S. If you're interested in learning more about how to change the way people are thinking about overhead and the nonprofit world, check out the Charity Defense Council. After you read this, of course!

Rethinking "Overhead" 

 

 

If you've been in fundraising for more than five minutes, you've likely been asked, "What percentage of my donation goes to overhead?"

Overhead usually means all the expenses not directly related to your programs. You know, those things like equipment, your bookkeeper, and, yes, fundraising. 

Every time we ask about overhead, we send the message -- overhead has no connection to program work, and isn't a legitimate thing to spend much money on. 

The assumption being -- 

When 95% of your budget is spent on program work, you're a fantastic, effective organization making huge strides in solving the world's problems. 

On the other hand -- 

If you're only spending 70% or 60% (gasp!), you must be a poorly run, ineffective nonprofit with questionable ethics. 

And websites that track this stuff like Charity Navigator and CharityWatch further perpetuate the idea that "overhead is evil" by giving their highest ratings to groups with the lowest overhead. 

This trains us to think that any money spent on fundraising isn't money spent on the cause. 

And what heartless, irresponsible soul would choose to spend money on fundraising when that money could be spent feeding hungry children? 

But -- if investing money in fundraising means you can raise millions more to solve the hunger crisis, isn't that a smart investment? 

Investing in fundraising is the only thing that is going to raise funds. It's the only thing that's going to increase the amount of money you have to tackle whatever enormous social problem you're trying to solve. 

Instead of asking how much of my donation is spent on overhead, I should be asking about effectiveness, growth plans, staff turnover, and donor retention. 

Who cares if you're keeping overhead low if you're not able to have a big enough impact to even make a dent in the problem? 

And, on the flip side, who cares what the overhead is if these problems are getting solved? 

Nonprofits need to invest in infrastructure and growth. Invest in your own strength, as Dan Pallotta says. It's the only way you can get closer to the scale you need to actually fulfill your mission. 

I know this isn't how most donors are thinking about it. And I know you can't suddenly start spending 40% of your income on overhead. 

But I invite you to join me in challenging the prevailing belief that the percentage spent on overhead is how the health, effectiveness, and spending priorities of an organization should be evaluated. 

Because if we don't come up with another way to think about it, we're never going to come close to changing the world. 

And that's what it's all about, right? 

 

 

Tina's pic

Want to read more...?
 
 
This monthly enews is four years old. And that means there are tons of past issues online.
 
So if you're a new subscriber or want a refresher, check out my online archive. 

 

You'll find no-nonsense advice on how to write for better results, what an effective website looks like, ways to improve your fundraising appeals, how to make "thank you" calls... you name it, it's probably there. And if it's not, let me know -- maybe I'll cover that next!
 

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Who is this email from, anyway? 


That's me! 

A fund development expert with a passion for social change, Funding Change founder Tina Cincotti gives grassroots groups the skills, tools, training, and confidence they need to raise more money from their supporters.

 

She specializes in building individual donor programs; improving donor relations and donor communications; writing newsletters, annual reports, and solicitations; coaching staff new to development; and motivating boards to be more engaged in fundraising.   

 

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