An article in the Stanford Social Innovation Review: The Nonprofit Starvation Cycle (August 18, 2009) highlighted a number of truths in the sector. Two important ones are,
- Most nonprofits do not spend enough money on overhead.
- Many nonprofits plan to cut even more overhead spending due to the current recession.
The article goes on to explore the relationship between foundations and nonprofits. It also looks at how nonprofits classify certain expenditures as program costs when they really should be overhead.
The conclusion: Rather than reducing overhead spending, the recession is an excellent opportunity to change the decades-long underinvestment in nonprofit infrastructure.