Bragging about program-to-admin ratios is a destructive practice that needs to die
They write: You know what makes me weep, though? Y'all who still use language in your letters like "94 cents of every dollar goes directly to programs!!!" Every time I see it or hear about it, it is like getting a barbed-wire-wrapped baseball bat directly to the noggin.
I am imploring you: Please, stop mentioning this ratio completely. Like Disco or skinny jeans, this practice has served its purpose and should be allowed to die a graceful death. Here are some reasons why:
It reinforces society's ridiculous expectations of low "overhead.": Society already expects us nonprofits to run lean, to the point that many of us have crappy computers running decade-old software, dumpster dive for supplies, turn to Youtube for professional development, and waste endless hours fixing our printer that's held together with packing tape and prayer. By saying "89% of your donations goes directly to blah blah," we are just giving permission to people to continue expecting us to keep "overhead" as low as possible, and that makes our work harder.
It trains people to look down core mission support: 89% of every dollar goes to programming? Well, that must mean that 11% goes to no-good, horrible, stupid, frivolous things. Never mind that these things include salaries, benefits, rent, insurance, financial management, evaluation, fundraising, HR, communication, technology, utilities, etc., all things that we need to do a good job making the "89% programming" possible.
It distracts from our outcomes and impact: Many of us complain about funders and donors' micromanaging of how we spend funding instead of focusing on outcomes and allowing us the flexibility to do what it takes to reach those results. Well, who can blame them if we ourselves not only keep mentioning this and keeping it at the forefront of people's minds, but also actually seem proud of it? As soon as we mention this ratio, donors' thoughts drift away from what we actually accomplish. The moving stories of the people we serve, of the results we achieve, get overshadowed by the red-herring of admin costs.
It is insulting to so many people in our field: When we brag about low "overhead," we are discounting millions of people whose work is critical to the sector. Finance professionals who are needed to keep the books and even allow us to know what the ratio is in the first place. Fundraising professionals who write grants and engage with donors so that we can keep the lights on. Evaluation professionals who help us know if we are reaching our goals and how we improve our services. HR professionals who ensure our team is happy and effective. Volunteer management professionals who help us engage our community members. Communication professionals who help us tell our stories and inform people of critical issues. Operations professionals who keep everything running smoothly so we can focus on programs. Executive Directors who curl underneath their cubicle desk and weep quietly over the cash flow projection as "Ordinary World" by Duran Duran plays softly on their 4-year-old phone.
It screws over other nonprofits and the entire sector: Yeah, by making donors feel warm and fuzzy that you're not "wasting" their money, you may get more donations. But you're screwing over other nonprofits, who may not have as "good" a ratio as yours, and so they look irresponsible by comparison, even if their impact is amazing. Worse, you're making it difficult for our entire sector, including for your own nonprofit, because again you're normalizing people's unrealistic and destructive views and expectations of what an acceptable level of "overhead" should be. You are inadvertently perpetuating the Nonprofit Hunger Games.
It reinforces our internalized martyrdom complex: We have to move out of this scarcity/martyrdom/scrappiness mindset. We should be responsible and efficient with our spending, but I've seen enough of us being paralyzed by fear that we may be affecting our ratio—"No, we can't invest in new financial management software! That will ruin our overhead ratio!" Our sector cannot reach its full potential to address systemic issues if we continue to be gripped by fear, a fear that we ourselves are feeding. We have plenty of people discounting our work, especially around the holidays. We don't need to do it to ourselves.
Yes, I know that in short term, it can be effective to mention the ratio. It can lead to more donations. But it's like being stranded in the wilderness and being really thirsty and seeing a pond. Drinking that water will make us feel better in the short term, but from countless Naked and Afraid episodes I've seen, in the long-run it just leads to parasites, dysentery, and all the associated horrible symptoms while your partner—strategically blurred and covered with leech bites—looks on in worry and disgust. Bragging about your low "overhead" ratio is like drinking parasitic pond water to quench your thirst.
While we're at it, for the love of hummus, please don't try the irritating and ultimately harmful trick of securing sponsors of your admin costs and then telling people that "100% of your donations go to programs." That's like saying "We got some ugly suckers willing to pay for stupid, yucky, useless, disgusting admin costs so that you can fund pure, wholesome stuff." If you genuinely believe that admin costs are frivolous and you don't think anyone should pay for them, then by all means, keep saying that. But if you believe core operating expenses like insurance and financial management are critical to our programs' success, then stop trying to weave illusions and preventing donors from seeing the importance of these things.
Let's agree to just not mention admin costs at all. Not in our year-end letters. Not on our website. Not in our collateral packets. Not in our presentations. Let not mention admin ratio on a boat. Let's not mention admin ratio with a goat. Not anywhere. Let's focus on our outcomes. On our results. On the stories. Our organizations do amazing work that help people, that strengthen our community. Let's shine the spotlight on that. We do not need to resort to the cheap trick of a lowered program-to-admin-expense ratio.
Our sector needs to do some things differently and abandon outdated habits that we may not realize might be harmful. Bragging about program-to-admin ratios is like wearing skinny jeans: we may think we look good, but we're just getting circulation cut off to our legs and vital organs.
From our Friends at Nonprofit With Balls http://nonprofitwithballs.com/
