3 Reasons to Reframe Overhead Costs as Infrastructure Investments

Photo Credit: Susan Van Horn

The scarcity mindset has dominated the nonprofit sector for far too long. When we operate from a mindset of fear rather than abundance, we feed into systemic narratives that normalize the expectation of doing more with less and risk shortchanging our organization’s ability to deliver on its mission.

“Overhead” spending remains a sensitive topic for nonprofit organizations and many feel discouraged from asking funders for what they truly need in fear of being rejected or worse, deemed as an organization that is not committed to serving their community. That’s because “overhead” has been associated with unnecessary administrative expenses rather than essential activities: efficient operations, strategic communications, and human capital. These areas of activity not only allow nonprofit organizations to sustain their mission and make the everyday work possible, they are, in fact, the building blocks of impact and strategic drivers of change.

And while the debate around overhead spending is not new, a growing body of research provides timely and valuable evidence that such investments are essential to achieving impact. Smart communications, including the language we use, can also help make the case.

By retiring the term “overhead”, nonprofit organizations can begin to reframe the conversation to advocate for full cost funding by directly linking greater impact to appropriate levels of investment (which will be unique to each organization) in capacity building, operations, and infrastructure.

Here are three reasons to replace “overhead” with “infrastructure investments”:

Aligns with the values and goals that some funders are already prioritizing with the recent shift toward “trust-based philanthropy” and “full-cost funding,” and models a more accurate framework for funders and donors still reinforcing outdated narratives about nonprofit spending
Encourages unrestricted gifts by communicating that nonprofits are trustworthy stewards of their resources
Builds a stronger case for sustainability by normalizing conversations around infrastructure needs not just externally but internally, which can help energize new possibilities and creativity

Being more accurate, intentional, and strategic with our language is also critical in the fight for greater equity. When we recognize nonprofit organizations as essential, trusted partners whose work requires infrastructure investments to deliver dignified and enriching services, we’re advancing equity by normalizing that ALL communities should have access to high-quality services and supports.

As the late linguist Julia Penelope said, “When we speak, we exercise the power of language to transform reality.” The language we use matters because it communicates our values and tells the world who we are, and perhaps more importantly, who we want to be.

Now more than ever, it’s important for nonprofits to harness the power of communications to transform reality and build a more sustainable future. Let’s move toward thriving instead of simply surviving. Will you join us?