Browsing by Subject "Overhead"
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Item Is “Overhead” A Tainted Word? A Survey Experiment Exploring Framing Effects of Nonprofit Overhead on Donor Decision(Sage, 2021) Qu, Heng; Daniel, Jamie Levine; School of Public and Environmental AffairsNonprofit overhead ratios (i.e., proportion of funds spent on fundraising and/or management) have long been used as a proxy for nonprofit efficiency. Prior studies find that donors negatively respond to charities with higher overhead. Using a survey experiment, we explore whether providing different types of information about overhead alleviates this donor aversion. When asked to choose between two organizations as donation recipients, donors preferred the organization with lower overhead. However, when presented with information that described the purpose of higher overhead as building long-term organizational capacity, an increased proportion of donors chose to give to the organization with higher overhead. Omitting the word “overhead” further increased the proportion of donors choosing the organization with higher overhead. This study adds to our understanding of overhead aversion and has practical implications for nonprofits that rely on voluntary private contributions to achieve their missions.Item Paying for Overhead: A Study of the Impact of Foundations’ Overhead Payment Policies on Educational and Human Service Organizations(2007-03) Rooney, Patrick; Frederick, HeidiThis paper examines the impact of foundations’ overhead funding policies on educational and human services organizations. Data was collected from two original surveys, one of foundations and one of educational and human services organizations, and from six case studies. The results of this study found that most foundations fund nonprofits’ overhead expenses, mostly within program grants. Large foundations and those that fund locally were statistically more likely than smaller foundations or those that grant nationwide to fund nonprofits’ overhead expenses, controlling for other factors.Item Variations in Overhead and Fundraising Efficiency Measures(2002) Hager, Mark; Pollak, Thomas; Rooney, PatrickThe desire of individual donors and institutional funders to know how their money is spent, along with the increasing availability of financial information on nonprofit organizations has increased the use and abuse of financial measures of nonprofit efficiency. We focus on two measures: the proportion of budget spent on non-program expenses and the ratio of fundraising expenses to contributions. We hypothesize variations in these measures by organizational size, age, and subsector, and we test these hypothesis with data reported by the organizations to the Internal Revenue Service. We conclude that the ratio measures vary by organizational characteristics, a factor both widely cited by watchdog groups and overlooked by agents that attempt to apply the measures to nonprofit organizations without regard for systematic variation. We also conclude that other basic factors besides size, age, and subsector are important in explaining the relative efficiencies of nonprofit organizations.