Socialize With Us

Is Overhead Having a Moment?

Monday, June 22, 2015

The Real Cost Project, led by David Greco and his team at Social Sector Partners, has been hosting a series of funder convening’s to discuss and explore what it takes to develop new grantmaking practices based on what it really costs to deliver outcomes. The first convening took place last week in San Francisco. Our California regional partners, Southern California Grantmakers (SCG) and San Diego Grantmakers (SDG) will be hosting their convening’s this week and next.

The movement for real-cost funding seems to be gaining traction, not only here in California, but also in other parts of the country. Last week, the Ford Foundation announced its new direction with focus on general operating support.

Senior Vice President Michael Hamill Remaley from Philanthropy New York explains what progress New York is making to support the real-cost trend in his recent blog:

For many years, nonprofit advocacy organizations…have steadily sounded the drum beat calling for government and foundations to provide the resources nonprofits really need to do their work effectively. That means, at the very least, dedicating adequate funds in project budgets for overhead and, ideally, moving toward the provision of greater general operating support. 

Perhaps the most substantial development on the overhead issue occurred last December when the federal Office of Management and Budget (OMB) issued its Uniform Guidance on Overhead, which mandated that all contracts with nonprofits using federal funds – including pass-through entities using federal funds such as state and local governments – create contracts with their nonprofit service providers that include at least 10% for overhead.

To learn more about the Real Cost Project visit their website. Please continue to check NCG’s website for more upcoming Real Cost programs coming this fall!