Good News for The Nonprofit Overhead Dilemma?

chapman-Columbia 2Like our friends at Exponent Philanthropy, a group that connects small foundations with philanthropic leaders, we hope that the new OMB Uniform Guidance, which requires government grant makers to reimburse indirect costs, really makes a difference in the way people across every sector view nonprofit spending.

Despite the encouraging progress this community has made in areas like innovation and technology, overhead—or, more appropriately, the lack of funds and support to cover overhead—continues to be an issue for far too many nonprofits. We encounter this everyday in our work helping organizations build their technology capacity. IT is one of those areas that is often sacrificed in a budget crunch, and that almost always stands in the way of an organization fully delivering on their mission. At the same time, technology has become ubiquitous in our personal lives, and our nonprofit client and staff are clamoring for more tech-based solutions.

We heard it again yesterday in a call with a wonderful early childhood education program located in Northern Virginia. They had some great ideas about how technology could help them to do their jobs better, and they were frustrated with erratic email service, an outdated development database, and an unstable website. But, alas, they had a very small annual technology budget and had made no provisions for ongoing support. Like many nonprofits, they wanted to put the lion share of their money and resources into running their programs, leaving very little for overhead, because that aligns with the traditional narrative of how a good nonprofit operates.

Now, I am not arguing that nonprofits should be free spending, but failing to invest in necessary technology infrastructure is not good management and counter to your goals as an organization. I am hoping that the changes in the OMB regulations will make it easier for funders and non profits to do the right thing.

Topics: nonprofit technology, OMB Regulation, OMB Regulation for Nonprofits, OMB Uniform Guidline, Overhead Myth, News

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