# It is time to end the charity overhead myth

- Link: https://fundraising.co.uk/2013/07/08/it-is-time-to-end-the-charity-overhead-myth/
- Published: 2013-07-08T16:37:57+01:00
- Author: Howard Lake

The burden that all charities struggle under is the myth that overheads are a sign
of inefficiency and that staff are creaming off cash that could otherwise be spent
directly on beneficiaries. Some charities don’t help the sector, by proudly declaring
that every penny donated will go on charitable work.

 

Anyone who runs a business, or even stops to think about how organisations run, 
will of course recognise that some ‘overheads’ are essential if the business is 
to achieve its aims. You need staff, buildings, people who are very good at what
they do, heating, lighting and so on.

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So, I’m pleased to see a campaign underway in the US aiming to tackle [The Overhead Myth](http://www.overheadmyth.com).
Its creators rightly argue that

 

> the percent of charity expenses that goes to administrative costs—commonly referred
> to as “overhead”—is a poor measure of a charity’s performance.

 

The CEOs of the country’s three main sources of information on nonprofits –** **
[GuideStar](http://www.guidestar.org/), [Charity Navigator](http://www.charitynavigator.org/),
and** **[BBB Wise Giving Alliance](http://www.bbb.org/us/charity/) – wrote an [open letter to the donors of America](http://overheadmyth.com/wp-content/uploads/2013/06/GS_OverheadMyth_Ltr_ONLINE.pdf)
arguing that the “overhead ratio” is not a valid indicator of nonprofit performance.

 

The campaign, valuable and long-overdue as it is, raised some eyebrows from within
the US nonprofit sector. Some pointed out that many donors’ and the media’s focus
on administrative costs has been fuelled by the existence of sites like these.

 * **[Caroline Mason to be new CEO at Esmée Fairbairn Foundation](https://fundraising.co.uk/2013/09/19/caroline-mason-be-new-ceo-esmeacutee-fairbairn-foundation/)**(
   19 September 2013)
 * **[Meningitis charities merge to become Meningitis Now](https://fundraising.co.uk/2013/10/21/meningitis-charities-merge-become-meningitis-now/)**(
   21 October 2013)
 * **[Who are the top 30 charity CEOs on social media?](https://fundraising.co.uk/2013/11/22/top-30-charity-ceos-social-media/)**(
   22 November 2013)