Charity watchdogs are strangling nonprofits

I hope you read The Agitator’s post that might this outrageous claim:

Charities need more debt, less revenue diversification, less leanness (bigger reserves), and higher overhead.

(Do The Opposite?)

You might be thinking, If we did those things, the watchdog agencies, the press, and even our donors would throw a collective hissy-fit, and we’d be in deep trouble!

But consider research on financial data from 130,000 charities from 1982 to 2012:

  • Having a higher overhead generates 15% more program spend over 10 years.
  • Having less revenue diversification results in 17% more program spend over ten years.
  • Maintaining above median level reserves yields 32% more spending on programs.
  • Having an above-median interest expense ratio contributes about 11% to program spending over 10 years.

All in direct contradiction of the common press narrative that nonprofits should operate in a constant poverty/desperation mindset. And the numbers that get us good watchdog ratings. Many boards are on board with the narrative too, and keep their organizations from accomplishing what they could.

Start your fight against the poverty mindset close to home. Work on your own leadership to get them thinking about what really works to fund your organization. And together, maybe we can take on the watchdogs and the press.


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The future of fundraising is not about social media, online video, or SEM. It’s not about any technology, medium, or technique. It’s about donors. If you need to raise funds from donors, you need to study them, respect them, and build everything you do around them. And the future? It’s already here. More.

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Jeff BrooksJeff Brooks has been serving the nonprofit community for more than 35 years and blogging about it since 2005. He considers fundraising the most noble of pursuits and hopes you’ll join him in that opinion. You can reach him at jeff [at] jeff-brooks [dot] com. More.


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The future of fundraising is not about social media, online video, or SEM. It’s not about any technology, medium, or technique. It’s about donors. If you need to raise funds from donors, you need to study them, respect them, and build everything you do around them. And the future? It’s already here. More.

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Jeff Brooks has been serving the nonprofit community for more than 30 years and blogging about it since 2005. He considers fundraising the most noble of pursuits and hopes you’ll join him in that opinion. You can reach him at jeff [at] jeff-brooks [dot] com.

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