The NonProfit Starvation Cycle Results in Sickly Infrastructure

Ann Goggins Gregory and Don Howard begin an informative article on nonprofit viability with this insight:  "Organizations that build robust infrastructure—which includes sturdy information technology systems, financial systems, skills training, fundraising processes, and other essential overhead—are more likely to succeed than those that do not.  This is not news, and nonprofits are no exception to the rule." This is not news to most of us who work with non-profits.  What we frequently find that our clients agree with the idea of improving infrastructure and augmenting their management capacity  -whether it is through needed training or technology --  yet they are terribly reluctant to actually make these changes because they do not want to increase their overhead spending.  Underfunding overhead can have disastrous effects, finds the Nonprofit Overhead Cost Study, a five year research project conducted by the Urban Institute’s National Center for Charitable Statistics and the Center on Philanthropy at Indiana University.   Goggins and Gregory and Howard uncover two realities:  1) Over time, funders expect grantees to do more and more with less and less—a cycle that slowly starves nonprofits; and, 2) it takes both non-profits and the foundation sector to change these unrealistice expectations. Read more on the NonProfit Starvation Cycle from the Standard Social Innovation Review.