Financial Restrictions and "The Overhead Myth"

DENNIS HOFFMAN, CEO
ENGAGE USA

Did you know that 75% of all U.S. foundation grant making is restricted?

This is because many wealthy donors restrict their contributions from being used to cover "indirect costs," preferring that their gift is put directly toward the funding of a project.

The "indirect costs" of a non-profit organization can include anything from paying salaries to training staff to maintenancing buildings and equipment.  These are the overhead costs that come with operating any organization.

But, many large donors feel that if their gift is used to pay for basic operating expenses, it's not making any impact with their cause.  This results in chronically underfunded non-profits that, despite receiving such generous contributions, are financially unable to accomplish their goals.

Here is a great article about "the Overhead Myth" holding many non-profits back, and how a few branding experts are working to change donors' perception of "indirect costs."