Overhead Rhymes with Garlic Bread . . . editor notes issue #96

"The time has come," the Walrus said, "to talk of many things:
"Of rent and desks and insurance -- and whether pigs have wings.
"Why no one wants to pay for overhead, and all the grief that brings."

Overhead is on the upswing as a discussion topic:

  • Oregon last year passed a law requiring nonprofits to stay under an overhead ceiling -- or lose their tax-exempt status, and several other states are considering similar laws
  • Dan Pallotta has raised the question of overhead in catchy, provocative ways
  • OMB (the federal Ofice of Management & Budget) has issued a new Guidance mandating a minumum of 10% overhead in government contracts with nonprofits
  • Guidestar, Charity Navigator and BBB have felt compelled to proclaim that overhead is limited as a measure of nonprofit effectiveness
  • At least four regional associations of grantmakers are holding discussion groups on the topic of overhead in grant budgets

So this issue we're pleased to have "A Funder Talks to Other Funders About Overhead" with grantmaker Unmi Song, and next issue we'll publish "A Board Member's Guide to Nonprofit Overhead."

* Also in this issue of Blue Avocado: HR and transgender employees, "I Followed a Founder," a new approach to board agendas, classic nonprofit jokes, and 40 Inspirational Speeches in Two Minutes. (I love this issue.)

* Please take a moment to look at the right column and bottom of this page and recognize our advertisers, who help keep Blue Avocado free to everyone.

* And don't forget: pass this issue along to your pals and co-workers! Oh . . . and funders! -- Jan Masaoka, Susan Sanow and the Blue Avocado team

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A Funder's Message to Other Funders About Overhead

This article is adapted from a presentation made to Grantmakers for Effective Organizations (GEO). Our deepest thanks to Unmi Song for speaking these truths:

Good afternoon; I am Unmi Song, President of the Lloyd A. Fry Foundation. The overhead issue is one of the most important -- and most neglected -- topics that funders should be thinking about and discussing.

There is a lot of buzz around "impact" and "outcomes" and "evidence-based practices." But there is not enough buzz around what it takes for nonprofits to achieve these things.

What I've learned recently is that the assumptions we funders have about overhead are wrong! If we think . . .

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Transgender Employees: A Respectful and Legal Workplace Approach

Dear Rita: I manage a small team of employees in a close-knit office. Recently one of my employees told me in private that "he" is becoming a "she." I’m not sure how to deal with this. Do I call the employee "him" or "her"? I think when the other employees see him coming to work in women's clothing, they're going to freak out. What if he wants to use the women's restroom? I'm in totally over my head here!

-- Sincerely, Trying to Do the Right Thing

Dear Trying: This situation may be uncommon but it doesn't have to be difficult!

Let's begin by getting on the same page with some of the terminology. People whose gender identity is different from the gender they were assigned at birth are generally described as transgender. This term is also used to describe people whose gender expression . . .

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I Followed A Founder: a First Person Nonprofit Tale

Too often the focus on nonprofit executive transitions is about the departing executive. We're in the middle of interviewing 58 executives who followed founders or long-time leaders. Here's just one of their stories; we'll call her "Amanda":

The job was a dream come true. I had become executive director of a organization where my love and loyalty had lain for years. I had started out there as a volunteer there right out of college. After working at other nonprofits I had come back to this organization -- I'll call it CW -- as an employee, and had risen to the job of program director.

Less than a year after I became the executive director, the co-founders -- who had never fully left the picture -- fired me. They had brought in a consultant to "coach" me, and they hired him as the new ED. A year after that this wonderful organization crashed and burned.

This is my story:

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And Now for a Different Type of Board Agenda

Board meeting time is deeply precious time and the fulcrum of board-staff opportunity or disappointment. Let's be smarter about how we use it. Bonus: board meeting cartoon at end of article.

Every third Tuesday, or maybe four Wednesdays a year, a nonprofit board meets and discusses a few topics in order. Here's a traditional board agenda:

Traditional Board Agenda

  1. Minutes approval
  2. Executive Director's report
  3. Program Director report
  4. Finance Committee report
  5. Nominating Committee report
  6. Adjourn

We feel bored just looking at it. The unintentional message: staff is going to talk at us for most of the time and nothing interesting is likely to happen.

Now let's look at doing it differently:

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"Classic" Nonprofit Jokes

Our humor columnist Vu Le is standing at the microphone:

Last week, someone told me I should go into stand-up comedy. Figuring that stand-up probably pays more than nonprofit, I started working on some jokes. Here is the first batch. Try them out at your next annual dinner and you should have people rolling on the floor.


An executive director walks into a bar. The bartender says, "Why the long face?" The executive director says, "My organization is facing financial crisis due to the economy and funders' shifting priorities. We may have to lay off some staff and close several programs, leaving thousands of low-income clients without service."


Knock knock . . .

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Take a 2-Minute Vacation Right Now: 40 Inspirational Movie Speeches in 2 Minutes

Do nonprofits inspire people? or do people inspire nonprofits?

If you need two minutes of inspiration, enjoy this video that includes such classics such as "A day may come when the courage of men fails, but it is not this day!" and "Clap! Clap! Don't let Tink die!"

With clips from Rocky, Pulp Fiction, and The Mighty Ducks, we think you'll enjoy --and maybe even be uplifted by -- the video. And as Brad Pitts says in Troy, "We are avocados!" I mean, "We are lions!"

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