Lies, White Lies, and Accounting Practices
Why nonprofit overheads don’t mean what you think they mean
Lies, White Lies, and Accounting Practices
Why nonprofit overheads don’t mean what you think they mean
Saundra Schimmelpfennig
Published by The Charity Rater, LLC
Smashwords Edition
Copyright 2012 Saundra Schimmelpfennig
Smashwords Edition, License Notes
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Table of Contents
Administration costs are necessary
The fallacy of 100% efficiency - someone is paying for overheads
Lies, white lies, and accounting practices
Manipulating staff time
Changing where administrative work is done
Manipulating who pays for what
Valuing donated goods
Valuing medicine
How did the fallacy of administration costs get started?
Levels of sub-contracting
Duplication of work
Fraud and director salaries
Sharing financial information
Coordination
Learning from mistakes
It’s time to end the myth of administration costs
If you are like 80% of Americans, the number one thing you look at before giving to a nonprofit is the percent they spend on “overhead” which are administration costs such as salaries, rent, and computers. You do this because it makes intuitive sense - the less a nonprofit spends on administration the more it spends helping people. You do this because it’s what many experts tell you to do. And you scrutinize overheads because you want your donation to do the most good possible.