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Counting What Doesn’t Count? A Study of the Overhead Myth’s Prevalence in the Irish Nonprofit Sector

The nonprofit sector is often challenged to show its impact, to prove its return on investment and demonstrate its efficiency and effectiveness. When determining the merit of a nonprofit organisation, donors can choose to look at a range of indicators. This study investigates one such indicator that has been at the centre of recent scrutiny in the United States: the overhead ratio.

In June 2013 The Overhead Myth campaign was launched in the United States to correct a misconception about what matters when deciding which charity to support. In this study I introduce the literature and previous research conducted in this field and illustrate why it is felt there is a need for this campaign.

This research examines the transferability of these theories and the Overhead Myth campaign onto the Irish nonprofit sector. This is done through consultation with the representatives of the Irish sector. The Overhead Myth is built upon the premise that donors lean heavily on overhead ratios while judging a nonprofit. This paper looks at previous studies of donor habits and perceptions. As these previous studies were conducted in the US and UK, this research also attempts to give a taste of the perceptions of the Irish Public’s priorities and habits in choosing a nonprofit to support.

This research has recognised the presence of an Overhead Myth in Ireland.  It has sought to undercover the origin, impact and implication of low overhead policies and practices on the Irish sector and asks the crucial question: is there a need for redress?

 

Amy Mulcahy (2013)

 

Permanent link to this article: http://kimmagedsc.ie/dissertation/overhead-myths-irish-nonprofit/