Tag: overhead

The Nonprofit Overhead Myth is Dying a Slow (but Steady) Death

Author Donna CatalanoPosted on Categories BlogTags , Leave a comment on The Nonprofit Overhead Myth is Dying a Slow (but Steady) Death

 
It happened to me again last week…… I was chatting with a friend (who I consider a dynamic business professional) and the topic of nonprofit management came up. I sensed a familiar statement coming, and then, sure enough, he said, “I always make sure that a nonprofit has low overhead before I consider donating to them.”

Yikes….. Despite steady education efforts over the last several years by the likes of The National Council of Nonprofits and Guidestar, our society still has a way to go toward understanding that nonprofits are businesses with the same overhead expenses as most for-profit businesses. The National Council of Nonprofits is doing a great job of promoting the fact that ‘‘operating a charity is not free (gasp!). It costs something to deliver a nonprofit’s mission.  In their piece, “(Mis)Understanding Overhead,” the National Council of Nonprofits makes the argument that we rarely question a for-profit business’s need to pay for insurance, accounting, utilities, marketing, technology, building maintenance (the list goes on…), so it’s time to stop pretending that nonprofit organizations don’t have these same valid expenses.

I’ve compiled a few of my favorite resources to help as you consider your next charity donations (two powerful videos and a great FAQ sheet):

  • Dan Pallotta’s Ted Talk titled, “The Way We Think About Charity is Dead Wrong” is well worth 18 minutes of your time. One of the many strong points he makes is that when the focus is on direct vs. indirect costs, nonprofits are rewarded for how little they spend, not for what they get done.
  • The Human Services Council of New York hits the (sad) nail on the head with their video, “What If Pizza Shops Were Funded Like Nonprofits?“Don’t let the humor in this video mislead you – anyone who has worked in the nonprofit sector has surely experienced some variation of this situation.
  • If reading FAQs is more your style, check out Overhead Myth – FAQs compiled by GuideStar, BBB Wise Giving Alliance, and Charity Navigator for clear and detailed facts about nonprofit overhead.

    • Now you’re ready to join the movement to dispel the overhead myth which has constrained nonprofits for too long. Spread the word!

    Donna Catalano, MS, PMP, with Eastlake Solutions, provides project management consulting and fractional COO services focused on helping nonprofit organizations maximize their results through streamlined operations, successful project management, and ongoing professional development for their teams and leadership.

So Many Projects, So Little Time

Author Donna CatalanoPosted on Categories BlogTags , Leave a comment on So Many Projects, So Little Time

 
Nonprofit organizations can easily identify an unlimited number of worthwhile projects, but there are many actions the nonprofit leader can take to protect against initiative overload.

The best results come from focus,
not from trying to ‘do it all.’

Focus, in this case, means that new projects and activities aren’t added to the portfolio without regard to priorities or available resources. This doesn’t necessarily mean your nonprofit has to say no when new needs or opportunities arise. Instead, you should use a disciplined process for deciding how new projects get added and have a clear understanding of when it becomes necessary to hit pause or delete on others.

What’s on the Plate and How Did it Get There?

Much of your nonprofit’s day-to-day focus is dictated by the urgent and important needs of its stakeholders. Add in strategic goals, program goals, business goals, plus regular operations, and it’s no wonder that the full scope feels overwhelming.

What is your process for deciding what gets on your nonprofit’s ‘plate?’ For example, you would never leave a strategic planning session agreeing to implement 100 different goals – even if each of them had merit on its own.

If you’ve ever used a Pros & Cons list to help make a decision, you’re familiar with the concept of scoring models. Using a scoring model might seem like a dry textbook exercise, but there is significant value for organizations of all sizes to regularly look at everything they are trying to accomplish side-by-side, at least conceptually, and compare apples to apples.

Possible measures for your scoring model could include:

  • Risk vs. reward
  • Resources needed
  • Reasons in support of the project
  • Return on investment

Your organization’s project portfolio contains both existing and future projects and is constantly evolving – as projects are completed, you are in a better position to make decisions about the next priority projects to begin.

Being Honest About Resource Allocation

One of the leading causes of project failure is under-estimating the resources needed for completion. In the nonprofit sector, where budgets are tight and team members wear many hats, we’re tempted to act as if we have unlimited hours in the week.

When making capacity decisions, there is a big difference
between feeling and knowing what is possible.

Quantifying (in total hours) how long projects and activities take allows us to make better decisions when planning workloads and upcoming initiatives. Time tracking can be cumbersome at first, but gathering real data on how our teams are actually spending their time provides valuable information.

For example, a painting contractor routinely collects data from previous jobs, such as the number of hours and amount of materials needed depending on the size of each home, and makes scheduling decisions for upcoming jobs accordingly.

Consider beginning with tracking (collective) time spent on regular activities such as attending meetings, preparing status reports, and service documentation and billing. Build from there to track total hours spent on bigger projects such as events and program development.

Over time, your organization will have a collection of useful data to not only help with future planning, but you will also be able to identify ways to create everyday efficiencies as well.

Knowing When to Hit Pause or Delete

Making more time for important activities involves deciding when to hit pause or delete on others.

When you look at the full scope of your organization’s work, do you see a large number of unfinished, or languishing, projects?

Redirecting resources (time and energy) away from current projects to address crises or take advantage of new opportunities is a regular part of nonprofit leadership. At the same time, having a process for adjusting the priority levels of existing projects (pause or delete) is necessary to avoid sabotaging the entire portfolio of projects and activities.

Having too many projects in limbo (not officially paused or removed) eventually affects team productivity and morale when everything is expected to be treated as having equal priority.

So Many Projects….. and a Plan for Success

Consider the full scope of your organization’s work.

  • To what extent do you use data to manage workloads and allocate resources?
  • Do you use a defined process for evaluating and adjusting the priority levels of new and existing projects and activities?

By focusing your attention and resources, you’ll protect your organization and its teams from initiative overload and still accomplish its urgent and important work.

This article was originally published in Nonprofit Colorado magazine in March of 2019.

Donna Catalano with Eastlake Solutions provides consulting services focused on helping nonprofit organizations maximize their results with streamlined operations, successful project management, and ongoing professional development for their teams and leadership.