Before this year’s Big Reveal, nearly 100 women joined Impact 100 and Grants Plus to learn about the Impact 100 process and “philanthropic myths.” For example, one myth is that Impact 100 does not fund overhead. If we didn’t fund overhead, how would our nonprofit partners get their important work done?!
For a graphic re-visioning of overhead from the Nonprofit Quarterly, read more here.
Not familiar with the concept of nonprofit overhead? Check out more from the National Council on Nonprofits here.
Philanthropy Myth #1: “Applications should have low overhead costs.”
- Fact: Overhead is critical. Nonprofits cannot run a program without administrative staff to keep the org running, fundraising staff to get money to do it, and a heated and lit building to run the program.
- Fact: Different projects have different needs. A school-based program where an organization’s staff uses the school’s facilities to teach an after-school program will have much different needs than a food pantry that needs to store food to distribute to the community or a medical program that has to meet strict record-keeping guidelines.
- Fact: Every dollar spent furthers a mission. Everyone working at an organization is furthering its mission. Many organizations exist in complex environments and need to spend significant resources on non-program staff, facilities, and other “overhead” costs to support “direct service” programs.
- Fact: Impact 100 has examples of grant recipients in which overhead was the bulk of a budget, meaning, funding was needed to grow staff to impact more people or start up an effort.
- Instead Ask: “Does what this project will spend money on advance the mission and impact of the organization?”
Philanthropy Myth #2: “A small budget is a good budget.”
- Fact: Small budgets do not lead to success: Many nonprofits are locked in a dynamic with funders where they feel pressure to both present as small of a budget as possible and also succeed with that small budget. However, this can lead to near-inevitable failure when an organization doesn’t include everything required for the program
- Fact: Complex issues can’t be solved on the cheap. The nonprofit sector is complex and addressing complex needs requires extensive funding. Some programs require licensed professionals and/or require high-level staff, contracts with vendors, expensive capital investments, etc.
- Fact: The right budget is a good budget. What is important is making sure that the request has the right budget, something that Impact 100 Community Investment Review Committee (aka CIRC) works hard to figure out.
- Instead Ask: “Is the proposed budget appropriate to create the impact the application seeks?”
Philanthropy Myth #3: “That’s not what Impact 100 Funds.”
- Fact: Impact 100 is its membership, and Impact 100 funds what its members want to fund.
- Fact: Specifically, Impact 100 funds “significant grants that make a lasting impact in our community.” Each person might define “lasting impact” or even “transformation” in a different way; through dialogue, learning, and understanding each Focus Area, our members on Focus Area Committees determine what Impact 100 funds!
- Instead Ask: “What is the change the proposal will bring to our area?”
Review the entire PowerPoint that Grants Plus shared with Impact 100 members and guests at: https://impact100.org/wp-content/uploads/2020/01/Philanthropy-EDU-Grant-Review-Training-Grants-Plus-Impact-100.pdf