Efficient or Effective?

I saw a picture of a billboard not that long ago that made me question some core beliefs I had about charity leadership. It said, "Don't ask if a charity has low overhead. Ask if it has big impact."

We all face the pressures for our organizations to spend as little as possible on the organization and as much as possible on our programming. Having the lowest administration percentage possible is thought to be the holy grail of donor attraction. We have trained donors to ask questions about our efficiency, not our effectiveness.

Think for a minute about how unhealthy that is.

The organizations with the greatest potential for good in our world are expected to function on the least amount of money possible.

Efficiency, doing more with less, itself isn't a bad thing of course, but efficiency at the cost of everything else prevents us from having the kind of impact the organization was founded for.

To end up with the lowest overhead percentage, we either stretch the truth of what is considered programming or we under-invest in things like professional development, staff, quality reporting, storytelling and a host of other areas that are critical to effectiveness. The higher our value for efficiency the greater the likelihood of under-equipped staff, burnout, mediocre operations, poor systems and ineffective programs. All good businesses understand the value of appropriately investing in the business, but charities are not afforded the same commitment to strong internal organizational health.

How do we begin to break the chains that keep us from being stronger and having a bigger impact?

We need charity leaders who will commit to board and donor education changing the expectation for efficiency above all else. We need to find the courage to spend more money, not less, on internal capacity limiting factors. We need to have the confidence to invest more in areas that make the organization stronger, even if it temporarily means spending less on programming until we can show that effectiveness is better for our sector than efficiency. A focus on effectiveness, rather than efficiency, will result in a bigger impact.

Our organizations weren't founded to teach the world about how much we can do for so little. We were founded to address the world’s most challenging issues. Let’s invest in our organizations commensurate to the kind of impact we dream about.

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