Foundations are more likely to support nonprofits' overhead costs than is commonly believed, according to a new study released today by the Center on Philanthropy at Indiana University and the Aspen Institute's Nonprofit Sector and Philanthropy Program, which funded the study.
The study, Paying for Overhead, found that a surprisingly large majority of foundations (69 percent) support nonprofits' overhead expenses, such as rent, administrative staff, accounting systems, or strategic planning. Nearly half make grants for general operating support and almost one-third award unrestricted grants.
Nonetheless, the study of foundations and educational and human services nonprofits found that two-thirds of the nonprofits surveyed said they lack adequate funding for their overhead. And 75 percent reported that they do not rely on foundation funding to pay for such core operations.
“The issue of how much support foundations should provide for nonprofit overhead expenses is one of the most important in the nonprofit field today,” said Alan Abramson, director of the Aspen Institute's Nonprofit Sector and Philanthropy Program. “The debate over foundation funding policies is longstanding and heated, and this study sheds important new light on the subject.”
Read more and download the study.
