Investing for effective impact: Changing donor perceptions about not-for-profit efficiency in Canada

For many donors, making a contribution to a not-for- profit can feel confusing. Many people and organizations find themselves looking for information about how an organization will use a donation in alignment with its social mission. Both the media and the public are asking not-for-profits for additional accountability by posing difficult questions about how funds are allocated within organizations to achieve an intended impact. 

In this paper we explore the issue of overhead ratios - or the percentage of a not-for-profit’s operational expenses allocated to fundraising and administration, and discuss why donors should look beyond these proxies to help ask questions about why and how an organization is making a difference and what resources it needs to be successful.