Overheads or investment? A new perspective on nonprofit “admin” costs

Guest blog post by Lee Durbin (@lddurbin)

In February this year a story broke about the appalling conduct of some of Oxfam’s staff in Haiti following the 2010 earthquake, and there was understandable outcry. Channel 4 news spoke at the time with Sir Stephen Bubb, the former head of the Association of Chief Executives of Voluntary Organisations (Acevo), and although it is worth watching the interview in full Sir Stephen begins by highlighting a challenge for donors in light of the Oxfam scandal: “Administrative overheads are completely crucial for delivering effectively on the front line”. Without such investment, he argues, charities cannot develop proper processes, procedures, systems, and checks that would more successfully guard against the behaviour that Oxfam was rightly criticised for.

This is a compelling argument, but what about the argument for investing in fundraising specifically? How do we convince donors that a charity’s fundraising “overheads” aren’t a necessary evil which detract from the causes they care about, but are instead crucial forms of investment enabling charities to perform greater good?

This is more difficult to sell to donors than the idea that effective safeguarding needs to be financed, but in the video I’ve embedded below the great Ken Burnett is quite right when he states that “we won’t achieve the revolution we need unless we’re prepared to invest”. Ken spends the previous 6 minutes demonstrating why this form of investment provides tremendous returns over the long term (I do recommend watching it, together with the other “lightbulb moments”). So why aren’t charities heeding this call?

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