As Strategic Grants reflects on 15 years of funding best practice—with 10 of those years proudly and firmly rooted in Aotearoa New Zealand—we’ve been thinking a lot about just how much the funding landscape has changed over this time.
One turn in the tide that our team has been discussing in depth, is the narrative of overhead costs.
It was over 10 years ago that Dan Pallotta did his TED talk in the US speaking to some crucial challenges that the not-for-profit sector faces in comparison to the for-profit market economy.
One of his impassioned points was the desperate need for overheads to be reframed and changing the narrative of a successful not-for-profit organisation being synonymous with one that has low overheads.
In fact, the expectation of charities to keep these essential costs low drastically hinders the growth, outcomes and impact of their work.
This idea has rippled across the sector over the past decade, as understanding, mindset and behaviour begins to change within both charities and funders.
There is a need for this conversation to become front and centre to enable a turn in the tide, and an organised and collective sector approach would be the real catalyst for changing behaviour.
Here in Australia, the Pay What It Takes movement and their most recent initiative – ‘Reframe Overhead’- is gaining momentum and support.
They are drawing on research to drive public conversations about the effect of the “non-profit starvation cycle,” and how the competition “to show who invests in their organisation the least” is affecting the sector’s ability to operate effectively, retain talent and achieve maximum impact.
But how is the overhead conversation rippling across the sector in Aotearoa?
It would seem the conversation is still a quiet rumbling in the background. My research into articles, webinars, sector resources and LinkedIn posts, draws very little in return.
The conversation is indeed happening, but on an individual level, within and between organisations, and outside of the mainstream sector discourse.
At Strategic Grants we hear more and more stories of New Zealand funders that actively fund overheads such as salaries, IT and rent, and community organisations that are speaking out about the essential costs needed to successfully run their organisation and deliver outcomes and impact.
But it’s not yet being talked about openly and collaboratively at the sector level.
There is a need for this conversation to become front and centre to enable a turn in the tide, and an organised and collective sector approach would be the real catalyst for changing behaviour.
Our Australian colleagues, peers and partners have started the hard mahi. There are incredible resources and discussions going on across the ditch in the ‘Pay What It Takes’ initiative; it’s there for the taking to be adapted for Aotearoa.
Want to know where to start?
Here are some key resources:
- In the research paper, you will find all the relevant research including fundraiser interviews, donor surveys, and literature review. It provides detailed insights and calls to action for you to use.
- In the not-for-profit guide, you’ll find the key facts, shared language, and practical steps you need to start reframing overhead costs.
We’d love to know—are you speaking to funders about funding overhead costs for your organisation?
Strategic Grants is celebrating 15 years of funding best practice—find out more here.