How Philanthropy Is Changing the Culture on Full Cost Funding

How Philanthropy Is Changing the Culture on Full Cost Funding

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Breaking the nonprofit starvation cycle is not easy, but exciting progress keeps happening. To keep that momentum going, a great deal of culture change is needed. It is an entrenched mindset that has existed for a long time, one that asks nonprofit organizations to eke by with little to no administrative expenses; in response, nonprofit organizations are accustomed to scaling back, making do with as little as possible, while their capacity and potential for innovation dies on the vine.

Donors ForumBut change is happening. Donors Forum convened more than 30 foundation CEOs in May to talk about some significant changes:

In the public sector, after significant advocacy from national groups like the National Council of Nonprofits, the federal Office of Management and Budget has issued guidance stating that at least ten percent of federal dollars awarded to nonprofit grantees should pay for their indirect costs. This gives government funders a chance to pay the real costs needed to generate outstanding, sustainable outcomes. Additionally, leading websites such as Charity Navigator and GuideStar are moving away from using overhead costs as a measure of organizational efficiency. Instead, they are developing ways to measure the outcomes organizations produce.

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Huffington Post

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