Is Celebrating a Lean Overhead Hurting Your Fundraising?

In the world of nonprofit fundraising, the scarcity model has been hailed as the ultimate benchmark of success. Advocates argue that every dollar raised should be allocated solely to program expenses. However, I beg to differ.

Focusing solely on achieving this as a “gold standard” distracts us from what truly matters: efficiency, impact, sustainability, and long-term success. Donors want to see their contributions make a lasting difference, not just in the present but for years to come. While some may believe that organizations should strive to do more with less, it’s important to challenge this mindset. Breaking free from preconceived notions is difficult, but it is within our power not to perpetuate them.

I urge you to reconsider your celebratory messaging.

“Educate your supporters about the metrics you use to measure success and align them with your organization’s goals.”

Emphasizing your adherence to the scarcity model could pose risks in the future. Your financial ratios may fluctuate, especially if you incur additional startup costs for various mission-aligned projects.

Ask yourself about your next 3-10 year strategic plan. If your overhead costs change, will it appear as though you’re losing ground when instead you hope to communicate that you are investing in shared priorities to maximize contributions? There’s no need to feel guilty about investing in your own organization’s infrastructure and capacity if it will result in greater mission delivery.

It’s crucial to maintain control over your messaging. Educate your supporters about the metrics you use to measure success and align them with your organization’s goals. Success is not solely determined by low costs year after year but by a lasting impact over a measurable period of time. Share this information transparently as you progress.

To explore this topic further, I recommend the following resources: