Your donation dollars are precious! We all want to make the greatest impact when giving to a non-profit. While it is a factor, your giving impact isn’t all about knowing how much money an organization spends on overhead. There are some misconceptions about the best use of your money for the greatest impact and one of the most dangerous things you can do is judge a non-profit – or any company for that matter – on one statistic. It is a combination of results and long-term performance that matters. There are a series of myths addressed by Charity Navigator and the Better Business Bureau Wise Giving Alliance at OverHeadMyth.com/faqs. This list helps you decipher what to focus on when reviewing a non-profits financial integrity.
Myth: Less overhead is better.
Truth: Not necessarily.
According to OverheadMyth.com: “Under-investing in administrative costs is consistently linked with poor organizational performance and sustainability–trapping organizations in what Ann Goggins Gregory & Don Howard in the Stanford Social Innovation Review called, “The Nonprofit Starvation Cycle.” In our view, it is relatively rare to find an organization that over-invests in administrative expenses since these expenses usually help support a nonprofit’s mission and goals.”
Learn more about all of the overhead myths including CEO salaries, restricted gifts, and more at www.overheadmyth.com/faqs.
How to check if an organization is responsibly spending your money.
- Annual Report
- Tax Form 990
- Are they meeting their strategic plan? Do they even have one?
- Look at credibility sites like ECFA, Charity Navigator, GuideStar and Better Business Bureau
Mel Trotter Ministries is an accredited ECFA organization, a member of the Association of Gospel Rescue Missions, a Gold status on GuideStar and a BBB Torch Award Finalist.
The most important thing you can do is connect with a staff member and get an inside look at the workings of the organization. Mel Trotter Ministries holds bi-monthly “Meet the Mission” Luncheons where current and prospective donors can ask questions of the leaders, including the CEO, hear a real story of someone whose life is being impacted and get a full tour of the Mission.