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Getting What We Pay For

Low Overhead Limits Nonprofit Effectiveness

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Document date: August 01, 2004
Released online: August 01, 2004

Brief #3 from the series "Nonprofit Overhead Cost Project"

The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders.

Note: This report is available in its entirety in the Portable Document Format (PDF).


Nonprofit organizations feel pressures to conform to expectations to keep overhead expenses down, and thus maximize the proportion of resources that can be devoted to programs. Yet recent years have witnessed a countervailing trend: significant investment in organizational capacity building, including areas properly considered overhead.

These different approaches raise important questions. How adequate are the administrative and fundraising capabilities of nonprofit organizations? How does strength or weakness in these areas relate to the overall effectiveness and efficiency of the organization? And to the extent that weaknesses exist, what appears to be their cause?

To study these issues in depth, we conducted detailed discussions with nine organizations. The organizations ranged in size from under $1 million to over $40 million in annual expenditures. They represented various fields of work, such as health, education, and the arts. This brief highlights three groups of findings relating to organizational effectiveness that emerged from these case studies.


Note: This report is available in its entirety in the Portable Document Format (PDF).



Topics/Tags: | Nonprofits


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