The Pay What It Takes Charity Consortium launched its campaign at the Fundraising Institute Australia’s 2024 conference on 1 March 2024. The campaign includes new Australian research and a guide which gives charities the data and resources they need to change the narrative about overhead costs.

Funders who pay for direct program costs, but underpay the indirect costs of supporting their delivery, create a ‘non-profit starvation cycle’. According to the consortium, the failure to pay for indirect costs hampers not-for-profit (NFP) organisations’ ability to invest and build necessary infrastructure, innovate, and sustain their impact.

The report’s key insights include:

• while the need for increased investment in overhead is high, there remains a gap in informed and actionable guidance to address this issue
• donor attitudes towards overhead costs may be more nuanced than previously thought, with many donors willing to support overhead costs if they understand how these investments lead to greater effectiveness, impact and outcomes
• more strategic and positive framing of overhead costs is needed to better resonate with donors, including the link between overheads and impact
• research is needed to demonstrate correlation between overhead investment and organisational growth in Australia

Current framing of overhead costs is defensive: 89% of NFPs publish a pie chart (see above) that emphasises low administrative and fundraising costs, rather than how each dollar invested in fundraising leverages more funding and impact. More information and guidance on recovering indirect costs at the campaign website and here.