Just the other day I was researching how best to promote our upcoming workshop on calculating indirect rates (you can check it out here). Like all good marketers, I was googling stuff. I came across this online “dictionary” definition of what indirect costs are:
Overhead costs are an unavoidable part of running a nonprofit. These expenses are necessary to operate your nonprofit, even if they don't specifically relate to your cause. It is important to address your overhead spending; every dollar spent on operating costs is a dollar not being used for your mission.
Now, right off the bat two things bothered me about this definition. (Well, a lot did but for your reading’s sake I’ll narrow it down to two.)
I have no problem with indirect costs and the reporting of them. My eyes only started to roll while I was reading that “definition” because society as a whole insists on perpetuating the myth that these costs are evil and must be watched with suspicion because if they become too high the nonprofit must be chastised back into submission.
I believe wholeheartedly in the need for nonprofits to track, monitor and report indirect costs to the public, to their funders…to anyone who wants to know what they are. It is important that they know this information. A good business needs to know what it truly takes to get the job done. And, honestly, if we are thinking of investing in them or working for them, we should be asking them what those numbers are.
But, in my eyes, I’d rather work or invest in a nonprofit that invests in itself. One that knows that in order to provide a quality, world-changing service…you need to put the resources where they are needed.
I’ve worked within the nonprofit field for close to twenty years and, from the inside looking out, the view hasn’t changed much in how a nonprofit is expected to present themselves. Years ago, there was an amazing TEDx presentation done by Dan Pelotta called “The Way We Think About Charity Is Dead Wrong.” It is an amazing presentation and I strongly encourage you to watch it. It challenges us to view nonprofits just like we would any other business and lights a fire under you to help be an instrument of change in how the world views the way a nonprofit should run.
Oh, yeah…and don’t forget to register for our Negotiating and Calculating Indirect Rates for Grant Applications workshop coming up on January 7.
Program & Outreach Director for VCMC