Across the nation, numerous initiatives and programs are converging to create an increased focus on nonprofit overhead and funding the full cost of program delivery. As this conversation takes place nationally, we are engaging California funders in a dialogue that can shape better outcomes for the sector.
Nonprofit Finance Fund (NFF)
In addition to serving as co-leader in Philanthropy California's initiative, Nonprofit Finance Fund (NFF) is working with mission-driven organizations around the country to unlock their potential through tailored investments, strategic advice, and accessible insights. NFF has been working with a full cost framework for decades. With a rich and long history in the full cost approach, NFF is spearheading the development of our statewide workshops and resources to equip funders and nonprofits with the skills to measure the full cost of outcomes and have conversations that look realistically at what it costs to achieve outcomes.
CalNonprofits – the state association of nonprofit organizations – is leading the Nonprofit Overhead Project and working with state and county governments for full implementation of the new Office of Management and Budget Uniform Guidance on indirect costs. They are developing trainings for nonprofits and a Nonprofit Overhead Toolkit to help with accounting for overhead, managing indirect cost rates, and analyzing business models.
Forefront – the regional association of grantmakers, nonprofits, and advisors in Illinois – launched the Real Talk About Real Costs project to increase dialogue and discussion about the importance of funding overhead costs of nonprofit organizations.
For more than 15 years, GEO has advanced smarter grantmaking practices that enable nonprofits to grow stronger and more effective. Recently, Heather Peeler, vice president of member and partner engagement at GEO, wrote an article on the three myths about overhead – The Truthiness About Overhead.
Bridgespan's True Cost Project helps grantmakers realize that different types of nonprofits have different cost structures. An effective true-cost analysis accurately allocates direct as well as indirect costs across focus areas such as programs, geographic sites or particular products, allowing nonprofit leaders to make more informed decisions about strategy and funding.
The Office of Management and Budget (OMB) has implemented new guidelines around providing a minimum level of overhead for nonprofit organizations receiving Federal funding.
GuideStar, BBB Wise Giving Alliance, and Charity Navigator launched the “Overhead Myth” project to end the false conception that financial ratios are the sole indicator of nonprofit performance.
Paul Shoemaker, founding president of Social Venture Partners, recently initiated a new effort entitled Reconstructing Philanthropy from the Outside In which advocates for providing unrestricted funding and focusing funding on mutually agreed upon outcomes.
The Wallace Foundation in partnership with Fiscal Management Associates, a leading financial management consultant for nonprofits, created a library of resources to help your organization become "fiscally fit."