How old is your computer?

10 Mar How old is your computer?

10 March 2026

By David Allen, Development for Conservation

Moving brings up a lot of stuff, and our recent personal move was no exception.

“Where did we get all this stuff?”

“Do we really want to move this stuff?

“How many of this “stuff” do we actually need?”

Most of the “stuff” we decided NOT to move was relegated to the garage sale, the curb with a “free to a good home” sign, Goodwill-Salvation Army-ReStore-or similar, or as a last resort, the dump.

And the joke was that we had been living for a long time with a lot of stuff that even the dump didn’t want.

I was reminded of this when I read an article passed to me by a friend and colleague that referenced the Nonprofit Starvation Cycle.

Organizations that build robust infrastructure—which includes sturdy information technology systems, financial systems, skills training, fundraising processes, and other essential overhead—are more likely to succeed than those that do not. This is not news, and nonprofits are no exception to the rule.

The Nonprofit Starvation Cycle was coined (as far as I know) by Ann Goggins and Don Howard in a post published in the Stanford Social Innovation Review way back in 2009. The point in their post was that nonprofits were NOT spending enough on information technology systems, financial systems, skills training, fundraising processes, and other essential overhead. With the result that they were slowly starving themselves.

Their post reported the results of a five-year research project on nonprofit overhead conducted at Indiana University.

The researchers examined more than 220,000 IRS Form 990s and conducted 1,500 in-depth surveys of organizations with revenues of more than $100,000. Among their many dismaying findings: nonfunctioning computers, staff members who lacked the training needed for their positions, and, in one instance, furniture so old and beaten down that the movers refused to move it. The effects of such limited overhead investment are felt far beyond the office: nonfunctioning computers cannot track program outcomes and show what is working and what is not; poorly trained staff cannot deliver quality services.

And staff and volunteer burnout.

The “cycle” is vicious:

• Funders underestimate the cost and value of overhead.
• Nonprofits feel pressure to conform to funders’ expectations
• Nonprofits spend less and less on overhead
• Non-profits also under-report expenses in fundraising materials, hoping to show funders that they are worthy of additional investments
• Funders interpret this as validation of their unrealistic expectations
• Nonprofits feel even greater pressure
• Nonprofits spend less and under-report even more
• Nonprofits can’t keep up technically. They create workarounds, trying always to do more with less. And eventually burnt-out staff leave only to be replaced by people with less skills and institutional knowledge.

Two things stand out for me: the first is that funders underestimate the cost of overhead. This includes individual funders – members, mid-level donors, and major gift donors. It’s not just foundations and government agencies.

The second is that we nonprofit organizations are complicit.

• Every time we underpay our employees and fail to provide basic benefits – like health insurance and professional development training – we perpetuate the problem.
• Every time we squeeze another three or four years from our donated computers and duct-tape our furniture back together, we perpetuate the problem.
• Every time we fail to account for donations of time or items that would otherwise fall in the “overhead” category – thereby under-reporting the true cost of our business – we perpetuate the problem.
• Every time we proudly report that “every dollar goes to program,” or that we spend “just 4% on overhead,” we perpetuate the problem.

The standard for overhead (inclusive of fundraising) that emerged right after the study was 30%. Thirty percent! One commenter referenced a foundation that had identified a “sweet spot” between ten and forty percent in any given year. They suggested that nonprofits reporting less than 10% overhead should also be required to report what they were sacrificing to keep their overhead so low.

Like sturdy information technology systems, financial systems, skills training, fundraising processes, and other essential overhead.

The insidious piece of this is that when our staff, Board, volunteers, and donors/funders focus attention on overhead –– we are drawing attention away from storylines that are actually far more important – the projects we complete, the land that is protected forever, and the difference we make in people’s lives.

When I worked at The Nature Conservancy, I had an ongoing “discussion” with my bosses about fundraising expenses. In the name of being equitable across all departments, they would declare that everyone needed to cut X percent of their expenses.

I proposed then, and I would propose again now, that a far more important number would be the amount of money fundraising was responsible for raising. I wanted to be held accountable for what I produced instead of how little it cost to produce it. Perhaps if we spent a little more on fundraising – on information technology systems, financial systems, skills training, fundraising processes, and other essential overhead – we would raise more and deliver more for the other programs.

Q: How much of my money will be spent on programs?

A: All of it.

Q: You mean you don’t have any overhead?

A: No – I mean that overhead is the reason this preserve is protected. Overhead is a critical part of programs.

So is Fundraising.

Cheers, and Have a great week.

-da

PS: Your comments on these posts are welcomed and warmly requested. If you have not posted a comment before, or if you are using a new email address, please know that there may be a delay in seeing your posted comment. That’s my SPAM defense at work. I approve all comments as soon as I am able during the day.

Photo by Petra courtesy of Pixabay

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