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OVERHEAD AND THE OMB: WHAT DOES IT MEAN?

OVERHEAD AND THE OMB: WHAT DOES IT MEAN?. December 8, 2014 presented to Arizona Grantmakers Forum Patrick McWhortor, President & CEO. WHAT IS OVERHEAD ANYWAY?. Shades of Grey. Operating Funds Overhead Indirect Cost. National Study. Arizona Data.

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OVERHEAD AND THE OMB: WHAT DOES IT MEAN?

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  1. OVERHEAD AND THE OMB:WHAT DOES IT MEAN? December 8, 2014presented to Arizona Grantmakers ForumPatrick McWhortor, President & CEO

  2. WHAT IS OVERHEAD ANYWAY?

  3. Shades of Grey • Operating Funds • Overhead • Indirect Cost

  4. National Study

  5. Arizona Data * Data reported are based on a national survey of 501(c)(3) public charities with expenses of $100,000 or more. Hospitals and higher education as well as nonprofits not likely to have government contracts and grants were excluded from the sample. Analysis is limited to nonprofits reporting government contracts or grants. See Methodology section for more details on response rate and data weights.** State rankings: 1=highest percentage of nonprofits reporting problem; 51=lowest percentage of nonprofits reporting problem. Source: Sarah J. Pettijohn, Elizabeth T. Boris, and Maura R. Farrell, National Study of Nonprofit-Government Contracts and Grants 2013: State Profiles (Urban Institute; May 15, 2014) (“Urban Institute State Profiles 2013”).

  6. In Their Own Words… “School Lunch program dollars provides less than .82 per meal but costs us, with labor, new required food options, required posters and menu planning, more than $1.85 per meal. That loss does not include the administrative costs and overhead.” “New State grant for homeless services allows ZERO overhead and almost no program-specific costs besides staff time and direct client assistance.” “Recent government contracts/grants, especially state and local, have started to capadministrative expenses at 10% even though our organization has a federally approved indirect rate.” Source: 2013 “pulse poll” conducted by Alliance of Arizona Nonprofits.

  7. OMB

  8. WHY IS THIS IMPORTANT?

  9. The Nonprofit Dollar 2.8% Investments 8% Government Grants 24.2% Government Contracts 13.3% Private Contributions 2.1% Other 49.6% Private Fees for Services 10.5% Individuals 2% Foundations 0.8% Corporations 32.2% Sources: Urban Institute, Giving USA (2010 data)

  10. BUT I DON’T RECEIVE GOVERNMENT GRANTS OR CONTRACTS… …WHY IS THIS IMPORTANT TO ME?

  11. Watchdogs • Charity Navigator • Better Business Bureau Wise Giving Alliance • Charity Watch • GreatNonprofits • Guidestar

  12. THE OVERHEAD MYTH

  13. BACK TO THOSE GOVERNMENT GRANTS AND CONTRACTS… …WHAT DID THE OMB DO?

  14. WHAT HAPPENS NEXT

  15. WHAT HAPPENS NEXT

  16. QUESTIONS? www.arizonanonprofits.org

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