Philanthropy News Digest
May 23, 2016
Funders' reluctance to fully fund overhead costs prevents many nonprofits from maximizing their impact, a report from the Bridgespan Group finds.
According to the report, Pay-What-It-Takes Philanthropy, the typical 15 percent cap on reimbursement for nonprofit overhead falls short, in many cases, of the actual indirect costs associated with the delivery of a service or services. In response to the finding, the report, which appears in the Stanford Social Innovation Review, urges grantmakers to re-think the 15 percent cap on nonprofit overhead reimbursement and calls for an approach that takes into account the actual costs associated with providing a given type of service, or what it calls "pay what it takes" philanthropy.