‘Overhead costs include important investments charities make to improve their work … when we focus solely or predominantly on overhead … we starve charities of the freedom they need to best serve the people and communities they are trying to serve.’ So runs, in part, an open letter from GuideStar CEO Jacob Harold, Art Taylor of BBB Wise Giving Alliance and Charity Navigator’s Ken Berger. The triumvirate, who between them represent, a significant chunk of the initiatives designed to help donors find trustworthy and appropriate recipients, published the joint letter earlier this week on a new website, http://www.overheadmyth.com It denounces the fact that the existence of ‘a few bad apples’ – as Jacob Harold puts it in a blog post on the subject – has been allowed to create confusion in donors’ minds about what matters when judging a non-profit. While acknowledging its ‘utility as a filter for fraud’, the letter’s signatories argue that the so-called overhead ratio should not be used as an indicator of non-profit performance. Instead, they urge greater attention to issues such as transparency, governance, leadership and results.

For more information
http://trust.guidestar.org/2013/06/17/launching-a-campaign-to-end-the-overhead-myth/
http://www.overheadmyth.com