There’s a sentence you often see in this sector: “93 cents of every dollar goes to programs.” It’s meant to signal trust. Discipline. Integrity.
It also reveals something deeper – a constraint that has shaped how nonprofits operate for decades. The idea that the less you spend on yourself, the more virtuous you are. It sounds right. And for a long time, it’s been reinforced by donors, watchdogs, boards, and the sector itself. But it’s also incomplete. And in many cases, it’s holding organizations back from achieving the very impact they exist to deliver.
At our Donor Experience Summit in London, a group of nonprofit CFOs spoke candidly about this tension. Not in theory, but in practice. The reality they described is one many leaders recognize: you’re expected to grow, to reach more people, to respond to more complex needs…while operating within constraints that would be considered unsustainable in any other sector. The pressure to minimize overhead doesn’t just limit spending. It shapes decisions. It delays investment in technology. It constrains hiring. It fragments systems. It forces teams to optimize for short-term efficiency over long-term effectiveness.
The conversation sparked by the film Uncharitable has helped bring this into sharper focus. For years, Dan Pallotta and others have argued that nonprofits are judged by a set of rules that don’t apply anywhere else – where investment is treated with suspicion rather than seen as a prerequisite for growth. What’s changed more recently is not just the argument, but the environment. Donor behavior is evolving quickly. Expectations are being set outside the sector by the best digital experiences people encounter every day. Ease. Clarity. Speed. Personalization. These are no longer differentiators. They are baseline expectations. And meeting them requires infrastructure.
There are signs that the sector is beginning to shift. More funders are embracing unrestricted giving. More leaders are challenging the “overhead myth.” More boards are asking not just where money is spent, but what it enables. I’m excited for the narrative to catch up. And narratives matter. Because they shape behavior – from how donors evaluate organizations, to how leaders make decisions under pressure.
Trust remains foundational in this sector and it’s not built through austerity alone. It’s built through clarity, consistency, and outcomes. And increasingly, it’s built through the quality of the experience donors have when they choose to give.
The question worth asking isn't: “How little can we spend on ourselves?” It’s: “What do we need to invest to fully deliver on our mission?” Because in the end, the goal is not to look efficient. It’s to be effective.
And effectiveness requires the courage to invest in the systems that make impact possible.