Monday, April 26, 2010

Instead of Low Overhead…Show How You Make A Difference

Earlier this year, Don Pallotta, author of Uncharitable, spoke locally. His key thesis, backed up with a lot of data, is that rating nonprofits based on their overhead asks the wrong question. Instead, he suggests that potential donors should ask: “Does the nonprofit make a difference? Do I trust them?”

For years, many nonprofits have completed extreme aerobics to keep their overheads low. Others simply report bogus numbers. Read a handful of 990’s. You’ll see some examples of creative accounting. What’s more, the whole sector has scars from decisions that were made to keep overhead rate low. Scars that were gained seeking low costs rather than improved results.

Let’s endeavor to use Pallotta’s work to reduce the frequency of the overhead question and increase the “does your nonprofit make a difference” question. How might you demonstrate your effectiveness? Pallotta shared several ideas. He suggested video clips that share your goals and progress. He also mentioned sharing the results of your customer satisfaction surveys. Add these and other proofs to your website and Guidestar information. Show how you make a difference.

If you are interested in making more of your outcomes first class, see How First Class are Your Operations? at Or, email me , I will send you a copy of the April Added Value article on this topic.

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