Overcoming the Overhead Myth


Presented by:

Jacob Harold, president and CEO, GuideStar USA
Ann Goggins Gregory, chief operating officer, Habitat for Humanity Greater San Francisco
Jan Masaoka, CEO, California Association of Nonprofits 

Moderated by:

Eric Nee, managing editor, Stanford Social Innovation Review

Date: Wednesday, September 2, 2015
Time: 11:00 a.m.–12:00 noon PDT, 2:00 p.m.–3:00 p.m. EDT



A dangerous myth prevails among funders that overhead can be used as a proxy for efficiency. In fact, research shows that under-investing in administrative overhead is often linked with poor performance by nonprofits. Ann Goggins Gregory and Don Howard dubbed this process “the nonprofit starvation cycle” in the eponymous Stanford Social Innovation Review article.

This webinar is for nonprofit executives who wish to invest in administration and who need strategies for communicating to funders the true costs of running their organization; funders who are interested in evaluating their grantees for efficacy and for rethinking operational costs as opportunities for investment; and all social sector professionals who are interested in understanding and spreading awareness about the dangers of under-investing in overhead.

In this webinar you will learn: 

  • Why the nonprofit starvation cycle exists in the sector
  • How organizations that invested in administration subsequently improved their programmatic work
  • Strategies for explaining to funders the importance of overhead costs for future success
  • Tips for evaluating whether grantees are skimping on crucial investment areas in their budgeting

Many funders incorrectly believe that nonprofits with lower overhead—the share of an organization’s administrative costs—channel more funding to programs and operate as leaner, more successful organizations. However, a growing number of social sector professionals have pointed out that this perception is not just a fallacy, but a counterproductive funding practice. In reality, studies have shown nonprofits to be less effective when they skimp on administrative costs. Furthermore, the “overhead myth” sets unrealistic expectations for funders about how much running a nonprofit costs, incentivizing organizations to underreport and even misrepresent their actual costs, and cut out vital systems, such as information technology.

This webinar will be led by Jacob Harold, president and CEO of Guidestar USA, an organization that has led a movement to spread awareness of the overhead myth. He will be joined by Ann Goggins Gregory, chief operating officer of Habitat for Humanity Greater San Francisco, and Jan Masaoka, CEO of California Association of Nonprofits. 

Price: $49, which includes access to the live webinar; unlimited access to the webinar as many times as you’d like for twelve months; and downloadable slides. 



Speaker Bios

Jacob Harold, president and CEO, GuideStar USA
Twitter: @jacobcharold/@GuideStarUSA

Jacob Harold is a social change strategist, grantmaker, and author. Harold came to GuideStar USA from the William and Flora Hewlett Foundation, where he led grantmaking for the Philanthropy Program. Between 2006 and 2012, he oversaw $30 million in grants that, together, aimed to build a 21st-century infrastructure for smart giving. At the beginning of his career, Harold worked as a climate change campaigner for Rainforest Action Network and Greenpeace USA and as organizing director at Citizen Works. He was named to the NonProfit Times 2014 Power & Influence Top 50 list and currently serves as a term member for the Council on Foreign Relations. He earned a bachelor’s degree summa cum laude from Duke University and an MBA from the Stanford Graduate School of Business with a certificate in public management. Harold has further training from Green Corps in grassroots organizing, Bain in business strategy, the Chinese Academy of Sciences in complex systems science, and the School for International Training in Tibetan studies. Harold was born and raised in Winston-Salem, N.C., where his parents ran small community-based nonprofit organizations.

Ann Goggins Gregory, chief operating officer, Habitat for Humanity Greater San Francisco
Twitter: @Goggins_Gregory/@HabitatGSF

Ann Goggins Gregory is the chief operating officer at Habitat for Humanity Greater San Francisco. She joined the organization in 2014 and oversees programs, HR and Operations, and the ReStore. Previously, Goggins Gregory was a senior director at the Bridgespan Group. In that role, she led the organization’s work on measurement and learning and spearheaded research efforts on various nonprofit management topics. She coauthored “The Nonprofit Starvation Cycle” (Stanford Social Innovation Review, Fall 2009). Her articles on the importance of investment in “good overhead”—such as leadership development, knowledge sharing, and infrastructure—have also appeared in the Harvard Business Review and the Chronicle of Philanthropy.

Jan Masaoka, CEO, California Association of Nonprofits
Twitter: @janmasaoka/@calnonprofits

Jan Masaoka is CEO of the California Association of Nonprofits (CalNonprofits), a statewide policy alliance of nearly 10,000 nonprofits speaking to government, philanthropy, and the public at large. With offices in San Francisco, Los Angeles, and Sacramento, CalNonprofits works with legislators and regulators to strengthen the business and regulatory climate for nonprofits. Masaoka is a leading writer and thinker on nonprofit organizations with particular emphasis on boards of directors, business planning, and the role of nonprofits in society. Her books include Best of the Board Café (Fieldstone), Nonprofit Sustainability: Making Strategic Decisions for Financial Viability, coauthor (Jossey Bass), and The Nonprofit's Guide to HR (Nolo Press). Masaoka founded and publishes Blue Avocado magazine. Prior to CalNonprofits and Blue Avocado, she served 14 years as executive director of CompassPoint Nonprofit Services, where she was named Nonprofit Executive of the Year by NonProfit Times. She is an eight-time designee as one of the NonProfit Times Power & Influence Top Fifty list and was named California Community Leader of the Year by Leadership California.

Eric Nee, managing editor, Stanford Social Innovation Review
Twitter: @SSIReview

Eric Nee is the managing editor of Stanford Social Innovation Review, published by the Center on Philanthropy and Civil Society at Stanford University, and co-host of the Social Innovation Conversations podcast channel. He has more than 30 years’ experience in the publishing industry, most of it covering the high-tech industry. Before joining Stanford, Nee was a senior writer for Fortune magazine in the Palo Alto, Calif., bureau. He also helped Time Inc. launch eCompany Now (where he was executive editor), which later merged with Business 2.0. Before joining Fortune, Nee launched Forbes magazine’s Silicon Valley bureau, where he was bureau manager. He also served as editor-in-chief of Upside magazine for close to five years.