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Table of Contents



Administration costs are necessary

The fallacy of 100% efficiency - someone is paying for overheads

Lies, white lies, and accounting practices

Manipulating staff time

Changing where administrative work is done

Manipulating who pays for what

Valuing donated goods

Valuing medicine

The tail wagging the dog

How did the fallacy of administration costs get started?

Waste in nonprofits

Levels of sub-contracting

Duplication of work

Fraud and director salaries

Meaningful indicators

Sharing financial information

Coordination

Learning from mistakes

It’s time to end the myth of administration costs



If you are like 80% of Americans, the number one thing you look at before giving to a nonprofit is the percent they spend on “overhead” which are administration costs such as salaries, rent, and computers. You do this because it makes intuitive sense - the less a nonprofit spends on administration the more it spends helping people. You do this because it’s what many experts tell you to do. And you scrutinize overheads because you want your donation to do the most good possible.

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