Impact v Overhead

I recently read an article in a local publication about 5 non-profits that do "The most" with your money.  The article also listed criteria that a prospective donor should look for when considering a contribution.  While I take no exception to the non-profits selected and feel that they do exemplary work; I do have an issue with some of the criteria listed in the article.  It once again speaks to a non-profit pet peeve of mine, the fallacy that the cost of overhead should be the prevailing factor in determining a non-profits efficacy.

I would argue that the prevailing factor when deciding on non-profit efficacy is not overhead, but impact.  Simply put, what are the outcomes that the organization is achieving with your contribution - your return on investment (ROI).  Think of your contribution as not as charity, but as an investment.  You wouldn't choose an investment fund or firm based solely on the brokerage fees; you would also look at the short and long term performance.  You would want to know how investments have grown and what the projected ROI is going to be to you, the investor.  This is the same evaluation that should be made when making a charitable contribution.

This is why a contribution - an investment - in the Jewish Federation of Las Vegas is one of the best you can make.  The scope, reach and impact of the Jewish Federation differentiates it from many other organizations.  Whether we are feeding the hungry, comforting the sick, caring for the elderly, educating our youth, ensuring a Jewish future, or supporting Israel, together, we can make the world a better place.  You know the saying, when you save one life you save the entire world. When you contribute to the Jewish Federation of Las Vegas, you are saving and changing lives around the corner and across the globe. I can’t imagine a greater impact or ROI.

In his paradigm shifting TED talk in March of 2013, Dan Pallotta turned the view of non-profit evaluation on it's ear.  He asserted that we should not be evaluating non-profits by what they spend, but rather what impact they have.  He states, "So we've all been taught that charities should spend as little as possible on overhead things like fundraising under the theory that, well, the less money you spend on fundraising, the more money there is available for the cause. Well, that's true if it's a depressing world in which this pie cannot be made any bigger. But if it's a logical world in which investment in fundraising actually raises more funds and makes the pie bigger, then we have it precisely backwards, and we should be investing more money, not less, in fundraising, because fundraising is the one thing that has the potential to multiply the amount of money available for the cause that we care about so deeply." Pallotta was also one of the Keynote speakers at this year’s JFNA General Assembly in Washington D.C. Click HERE to watch his keynote presentation.

So the next time you're considering a charitable investment, don't only ask about the rate of the Federation's overhead. Ask about the scale of our community's dreams, our really - really big dreams, and how we plan to measure our progress toward those dreams, and what resources our community needs to make them come true, regardless of what the overhead is. Compared to the outcome of problems actually getting solved, is overhead really the most important metric?

-Todd S. Polikoff, CEO Jewish Federation Las Vegas 



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