"Charities are more than financial statements"

PND (Philanthropy News Digest) today has an article on making the case for funding administrative costs that quotes Bennett Weiner, CEO of the Better Business Bureau Wise Giving Alliance, as saying:

Charities are more than just financial statements, and people shouldn't make donation decisions solely on financial statements.

If a charity spends 80 percent of its expenses on programs, it doesn't necessarily mean that it is doing a better job than one that is spending 70 percent.

As refreshing as it is to read that quote, it is not, however, how most donors think about overhead costs. Donors - individuals and foundations - prefer to fund programs for a number of reasons. First of all, it's far "sexier" to say your money is saving children rather than making paperwork more efficient. Additionally, according to a study by the Center for Effective Philanthropy, "It's easier to track funds allocated to program[s]."

So, how do you make the case for administrative costs funding? Eric Schwarz, CEO of Citizen Schools, Boston, says:

The key is you don't call it overhead. Talk about metrics. Show that to get even better results and expand to reach more kids we need to invest in our team.

It's hard to save the world when you're sitting in the dark without any lights or a computer or coworkers. It may not be "sexy" but it is necessary.