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Guest Post: The Overhead Solution

November 3, 2014

by:

Joe Patti

Back in June 2013, I wrote about the release of a letter by GuideStar, Charity Navigator, and BBB Wise Giving Alliance urging funders to discontinue the use of overhead ratios to measure the viability of non-profit organizations. They felt the number was an inaccurate assessment of an organization’s effectiveness.

Since then, the subject of overhead ratio has appeared a number of times in my posts.

Recently, the GuideStar, Charity Navigator and BBB Wise Giving Alliance have released a second letter. This one is aimed at non-profits asking them to assist in the effort by educating their funders about the true costs of the programs and by providing alternative narratives about program effectiveness.

I was approached by GuideStar with a request to host a guest post on the subject. As this has been an area of interest for me, I was pleased to do so.

A Message From GuideStar President/CEO Jacob Harold

In 2013, I joined with partners at the BBB Wise Giving Alliance and Charity Navigator in writing an open letter to the donors of America explaining that “overhead ratios” are a poor way to understand nonprofit performance. We named this campaign “The Overhead Myth.”

I’m glad to report that the response to the campaign, including the original Overhead Myth letter to the donors of America, far exceeded our expectations. More than one hundred articles have been written about the campaign. It comes up every time I hold a meeting or give a talk. For many in the field, it’s been a deep affirmation of something they’ve known a long time. And, indeed, many leading organizations– the Donors Forum, Bridgespan, the National Council on Nonprofits, and others — have been working on the issue for a long time.

But we also know we have a long road ahead of us. The myth of overhead as inherently “wasteful” spending is deeply ingrained in the culture and systems of the nonprofit sector, and it will take years of concerted effort for us to move past such a narrow view of nonprofit performance to something that fully reflects the complexity of the world around us. That effort is essential, however, if we want to ensure that we have a nonprofit sector capable of tackling the great challenges of our time.

That’s why last week the CEOs of Charity Navigator and the BBB Wise Giving Alliance and I released a second Overhead Myth letter—this one addressed to the nonprofits of America. In that letter, we suggest a set of steps nonprofits themselves can take to help dispel the Overhead Myth. We all share responsibility for allowing things to have reached this pass. And it will take all of us to fix it.

We direct this letter to nonprofits not because we feel they are the originators of the Overhead Myth but because they are in the best position to communicate with their donors and funders. We want to recruit nonprofits to help us retrain donors and funders to pay attention to what really matters: results. In the end, that means nonprofits have to throw away the pie charts showing overhead versus program—and step up to the much more important challenge of communicating how they track progress against their mission.

In simple terms, we must—collectively—offer donors an alternative. In the letter, and on the accompanying website, we call on nonprofits to do three things as their part of this evolution:

Demonstrate ethical practice and share data about their performance.
Manage toward results and understand their true costs.
Help educate funders (individuals, foundations, corporations, and government) on the real cost of results.

We have provided a list of tools and resources related to each of these goals. These tools give nonprofits tangible steps they can take to engage their stakeholders around this critical issue. As the sector develops new resources and tactics, we will add them to the website.

We believe it will take a shared effort to focus donors’ attention on what really matters: nonprofits’ efforts to make the world a better place. It doesn’t matter whether you work at a nonprofit or donate a few dollars to a favorite charity every year, please join us as we seek to move from the Overhead Myth to the Overhead Solution.

For more information, or if you have a resource related to this issue that can help advance the cause, please email overhead@guidestar.org.

— Jacob Harold is the president and CEO of GuideStar, is a 501(c)(3) nonprofit that connects people and organizations with information on the programs, finances, and impact of more than 1.8 million IRS-recognized nonprofits. GuideStar serves a wide audience inside and outside the nonprofit sector, including individual donors, nonprofit leaders, grantmakers, government officials, academic researchers, and the media.

This letter original appeared on PhilanTopic blog and is shared with their permission.[divider]

Advocacy, Fundraising, Guest Posts, Info You Can Use, State of the Arts

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Art of Mathematics (Be Sure To Show Your Work)

October 29, 2014

by:

Joe Patti

A recent building renovation on my campus by the math department offices saw the installation of blackboard walls. The goal was to provides students with a place to study and work on projects as a group.

I am not sure if it was part of the original vision, but many of the boards have been used to illustrate the utility and beauty of math.

These are nowhere near the best examples of some of the content that has popped up. Since this hallway is in the administration building, I have had frequent occasion to pass by these boards.

As a person who has been confounded by math, I have been impressed by what an asset they seem to be for demystifying the subject. I have only understood about 1/3 of what has been posted, but the explanations that accompanied that 1/3 were often very entertaining as they facilitated my comprehension. The 2/3 I don’t understand at least gives the impression that it is interesting and enjoyable.

There has been one section that has stuck in my craw a bit…

I am not sure if this sentiment was created by any of the math students. Even though this particular hallway goes directly into “math territory” (the other hallway passes the offices of the Dean of Arts and Sciences and Office of University Communications), the general content is less mathematically focused.

This has been up for the last 8-10 weeks now and has remained unchanged while other sections have been erased and altered. One of the reasons it sticks in my craw is that it is immediately visible upon entering the administration building door so it is the first thing I have seen.

When this got posted on Facebook, someone pointed out the irony of this appearing on a wall full of art. And for that reason, it is a little difficult to justify going up and erasing it both as a matter of free speech and art censorship. There have been a number of works that either explicit or figuratively had a message that art sucks/is stupid.

I have nudged the chair of the fine arts department to deploy some students for a little counter-propaganda, but nothing has happened yet.

Perhaps the students are hard at work with their time consuming projects and rehearsals.

It comes as no surprise to anyone that arts disciplines face this bias. No one needed President Obama to make a comment about STEM majors being better for careers than art history, to come to this realization.

Ultimately though, the irritation I feel when I see this sentiment upon entering the administration building disappears when I make a left down the other hall and see the multi-colored attempts to use art to illuminate the mysteries of mathematics.

It really doesn’t matter if people are using these boards to insult the arts because the boards represent an effort to use a multi-disciplinary approach to education that has long been advocated for.

As we learned long ago on the internet, the intent of any effort that allows the for unmoderated contributions is bound to be co-opted at some point.

Advocacy, Art(ist) Education, State of the Arts, Working In The Arts

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All In The Timing

October 28, 2014

by:

Joe Patti

While I was at my state presenters’ conference last week, I was speaking to a colleague at a theater a couple hours away about possibly collaborating on advertising on public radio stations in whose coverage area both our theaters are in. My thinking was that people might be confused by separate ads. They might think, was that on Tuesday here in town and Wednesday 90 miles away or vice versa?

In the course of conversation, she mentioned they hadn’t announced that part of their season and would be waiting until January. (This was something of a relief for me because I hadn’t seen the show on their website and was afraid they backed out.)

She said they decided to break up their season and only announce half at one time in order to generate renewed excitement about the theater’s offerings. Unlike my venue, they don’t have any subscribers from whom they are seeking an ongoing investment. It sounded as if this is the first year they will be trying this as a bid to renew momentum for their programming so I don’t have any sense of how successful the approach is.

I was wondering if any one else had done this sort of thing and if they had any success with it. Are there any tips that you might have for catching attention and getting people excited, especially during the first year or two when people aren’t expecting to hear about a raft of new shows?

I just anticipate I may end up adopting similar tactics one day and there are probably a number of other readers who are ready to give it a try right now.

Many theaters are experimenting with different types of ticketing models from choose your own seasons, themed mini-seasons, punch cards allowing you to see any show in their season as many times as you like up to a limit or fewer times/shows with as many friends as you like.

I haven’t really heard about people playing with the timing of announcing groups of events in order to find an idea spacing. People would quickly become inured if you ANNOUNCED! EVERY! SINGLE! SHOW! WITH! GREAT! FANFARE!

But I am sure there are timing tricks that haven’t been widely explored. I imagine in snowier climes, if you announce a whole new group of offerings in January after the Christmas buzz has worn off and the winter doldrums have set in, your announcement might gain some traction.

Television networks abandoned announcing new seasons of series every Fall decades ago in favor of floating starts throughout the year. Is there a viable way to do something similar for live performances?

Audience Relations, Marketing/PR, State of the Arts

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You Can Enter The Museum Without Entering the Museum

October 27, 2014

by:

Joe Patti

I was quickly scanning a story about Harvard University president Drew Faust arguing for the value of university art museums when I was brought up short by a remark made by Director of the Harvard University Art Museums Thomas Lentz in anticipation of the reopening of the museums next month after a long renovation.

During the question and answer session, Lentz responded to a question about what Harvard’s reopened museums will offer by saying that the new museums are designed to be more accessible to students and community members.

“You can enter through one entrance and go out the other without actually entering the museum. The courtyard is going to be a new public gathering space,” he said. “We don’t want it to be a static treasure house.”

What caught me was the phrase about entering without entering the museum. After I went back to re-read the sentence, I realized that he meant you could enter the building complex without actually entering the museum.

I did try to find out more about these plans, but most of the other articles about the design didn’t really talk about how the building would be used by visitors. Harvard Magazine did have a pretty good story about the all around use of the facilities.

The courtyard Thomas Lentz seems to be referring to is this one. Nearly every article I read about this project features this space.

I have been having conversations with my staff about making our lobby a more welcome gathering place just to provide a sense of belonging to those who may enter or pass through. One of the advantages we have is that there is a parking lot on one side of the lobby and the rest of campus on the other side.

So yes, you can enter through one entrance and go out the other without actually entering a theater space.

Over the last few months, I have been paying attention to what other arts organizations and businesses who provide public gathering spaces do to make these spaces welcoming. One thing that has become very clear is that no matter how nice the amenities you offer, if people don’t have a reason to enter, it is all for naught.

Its that whole issue about “Field of Dreams” being a movie. If you build it does not guarantee anyone will come.

From the pictures of the Harvard Museums, exterior surroundings I am not sure if there is a reason someone would pass through one door and move toward the other on the way to somewhere and be enticed to linger. Certainly curiosity about the renovations and word of mouth about how interesting the courtyard environment is may be enough to get things started. After activity reaches a critical mass, it can be self-sustaining.

A month ago I wrote about the Taipei Performing Arts Center and what a cool idea the public loop through the building with unprecedented views of backstage activities was. But even as I wrote about it, I wondered if people would really enter the building and avail themselves of the opportunity, even with the entrance extending over the street.

I haven’t been to Taiwan, but if their behavior is even half that of their mainland brethren, there is a pretty good chance the public loop will be packed with people.

For the rest of us though, people are only slightly more likely to flock to our lovely public lounging places than to our formal performances unless they have a reason to do so. Often the biggest factor in that decision is just the physical location and layout.

If it is difficult to park nearby and the location isn’t conducive to foot traffic, people may not wander in during the day or come early to relax prior to a performance. Nor may they linger long afterwards if their drive is long and traffic problematic.

On the other hand, creativity and an eye for opportunity in your particular environment might provide a solution. I had a colleague whose performance space was too small for any sort of pre- and post show gatherings. However, an empty storefront with convenient access to the theater turned out to be great as a coffee lounge situation, provided a sense of greater activity on the street and put a little money in the property owner’s pocket.

It probably goes without saying that while it is a marked improvement to increase the number of people passing through and lingering in your public spaces, you still need to give them a reason to engage with your programming. It doesn’t matter how good the courtyard of the Harvard Museums are, they can still end up being a “static treasure house” if people don’t have any reason to pass through the next threshold.

Arts Facilities, Audience Relations

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