Well, here we go again.
It would be fun to have one single week go by where there isn’t a giant fire to put out or a thing to address in the nonprofit world.
Like, it would be great to just breathe for a hot minute, wouldn’t it?
This time, a quick quip, short post, or tiny explanation in response to the chaos might not be enough.
But as always – we’re the most resilient sector on planet Earth.
So let’s freaking get to work.
Just when we thought we’d finally convinced donors that overhead isn’t a dirty word—that it’s actually a critical ingredient for nonprofits to thrive—along comes a juicy scandal to shake public trust in the whole sector.
This time, it’s USAID at the center of the storm, with reports of mismanaged funds, questionable payments to NGOs, and the kind of bureaucratic waste that makes watchdog groups and congressional committees salivate.
And I get it.
Nobody likes to hear that taxpayer money might have been funneled into projects with… let’s just be generous, less-than-stellar oversight.
The headlines practically write themselves: Millions Wasted on “X” (pun intended)! Bureaucrats Fund “Y” With No Public Knowledge!
And using nonprofit & and non-governmental orgs to do it?
Yikes.
This is the kind of stuff that makes donors—especially the ones already skeptical about giving—clutch their wallets a little tighter.
But here’s what worries me: scandals like this tend to have collateral damage.
And in this case, that damage is going to land squarely on nonprofits, especially those receiving government or any type of grant funding.
Because when trust erodes, guess what comes roaring back? The dreaded overhead question.
You know the one.
"What percentage of my donation actually goes to the cause?"
For years, we’ve been chipping away at this outdated mindset, explaining that nonprofits need to spend money on things like staff, systems, and infrastructure in order to be effective. That starving an organization of these resources doesn’t make it more impactful—it makes it less sustainable.
But now? Well, let’s just say the skeptics are about to have a field day.
Here’s my knee-jerk reaction to all of this:
Trust is about to become the most valuable currency in the nonprofit sector.
If you thought building trust with supporters and the community was important before, buckle the hell up.
In the wake of these revelations, it’s going to be the thing that determines which organizations thrive and which struggle. So what do we do?
Time for radical transparency. And it’s NOT an option.
No, I’m not saying we all need to live-stream our finance meetings (though, imagine the popcorn-worthy drama of an annual budget debate with your board member Janet. You could get a Netflix deal for sure with her on video). But nonprofits need to get way ahead of the conversation.
You’re going to need to tell your donors exactly where their money is going. Regularly.
1. Break down costs in a way that makes sense. Not with a generic pie chart, but with real-world examples such as:
"This $10,000 investment in technology allowed us to process 30% more applications for assistance last year."
"By hiring a grant writer, we secured $500,000 in funding we wouldn’t have gotten otherwise."
Make financial reports easy to find and even easier to understand. No one wants to wade through a 90-page PDF written in accountant-speak.
Overhead is a feature of great work, not a bug that needs to be fixed – so let’s own it.
It’s time to double down on the message we’ve been preaching for years: a well-run nonprofit spends money on the things that make it work better.
2. Instead of shying away from the overhead conversation, let’s embrace it by saying:
"Yes, we invest in our team, because skilled people do better work."
"Yes, we spend on technology, because tracking data means we can improve our impact."
"Yes, we have administrative costs, because running a nonprofit is a business, and businesses that run well do more good."
The more we say it, the more donors will believe it.
If you don’t have people to run your programs, you have no programs. They are an absolute part of it. In fact, they are critical. So when you are confronted with the “overhead” question, you can say with absolute certainty – the individuals who work directly with clients and community are intrinsically tied to the effectiveness of the program.
Accountability shouldn’t come with a guilt trip.
Here’s the thing: nonprofits need to show they are good stewards of their donors’ money—but not out of fear. We shouldn’t be bending over backward to prove we aren’t the bad actors.
3. Let’s reframe our conversations and stand with our mission. So try saying this:
"We take accountability seriously because we believe in the work we do, and we want you to feel confident investing in it."
"Here’s how we evaluate success—and how we adjust when things don’t go as planned."
Real impact isn’t just about hitting metrics—it’s about being transparent about the process.
One of the most important reasons to be laser focused on mission and impact is that it is your true north. It’s the reason why individuals and businesses supported you in the first place, and it will be the reason people stay with you no matter how chaotic the narrative outside your organization gets.
Look, fraud and mismanagement deserve to be called out.
The bad players should absolutely be held accountable. But the additional risk here isn’t just government waste—it’s that public trust in all nonprofits takes a hit.
We have a choice.
We can either brace for the wave of skepticism and hope we don’t get pulled under, or we can get ahead of it, own our narratives, and build trust with our donors before they even have to ask.
I say we go with option B.
What about you?
More than ever, hear me: You’ve freaking got this.
-Patrick
(P.S. If you’re worried about how your nonprofit should respond to these shifts in donor perception, let’s talk. Because if there’s one thing we can control in the middle of all this chaos, it’s how we tell our story.) Waste, and Nonprofit Collateral Damage
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