I’ve made the case to avoid the easy, seductive, and wrong-headed use of overhead rates as a way of assessing and marketing nonprofits.

However, this rejection can not be nihilistic; we need to be able to communicate what we do and why that matters.

And, more specifically, since we know that people donate more and more often to prevent a bad thing than to create or sustain a good thing, we need to be able to communicate it in this way.

Our activities can fall into four buckets:

• Inputs: what resources do we have to get our job done?  The biggest of these, of course, are time and money, but people and expertise also fall into this category.  Picture the Apollo 13 scene where they have to turn this filter… into this filter… with this box of stuff.  Inputs are the box of stuff.
• Activities: what do you do with your resources?  We love to talk about these.  We give our programs fancy trademarked names and want our donors to care about these.
• Outputs: what do you get by using your resources?  A training program creates people who are trained.  A research effort creates a white paper and a study.  Everyone loves to talk about outputs because there is a number: we filled X beds, we had a Y% graduate rate, we served Z meals.
• Outcomes/impacts: what is the effect of your outputs?  A humanitarian delivery of food doesn’t end when the food reaches the dock — the output is reduced hunger among this target population.  Some people look at outcomes and impacts as separate things, with outcomes being a short-term implication and impacts being the long-term impact.  For me, there’s short-term, medium-term, and long-term impacts of the action.

Impacts and outcomes are hard.  Did your delivery of food reduce hunger or was it an improvement in overall economic conditions?  Once you increased the graduation rate, did those people go on to live better lives as a result?

Donors provide us inputs.  Their goal is to buy an impact.  They think that with their donation, they can buy a little more good in the world.

And they care not at all about the name of your trademarked program or the number of outputs that you have.

Your job is to connect the dots between the donor providing the input and what change they will help create.

If you are trying to sell someone on buying a hammer and a nail, it’s easy to talk about the hammer allows you to put a nail in a wall.  Someone might say that the goal is really to hang a picture.

But what the person really wants to do is have a feeling of family, nostalgia, and memories.  To do that, you need to hang a picture and to do that you need a hammer and nail.

So, how do you present your programs without resorting to the destructive “88% of your donation goes right to the people we are trying to serve?”

You cut as much out of the middle part as possible.  In Stephen King’s On Writing, he talks about cutting the parts of the book that people skip over reading (even cutting a section he loved but that his wife Tabitha thought was not necessary).  You must do this too.

You need to cut the activities and outputs to the bone.  Your support keeps the boot of despair off of young people, allowing them to succeed as productive adults — and succeed they do: look at Brian’s story.  You will prevent empty chairs at Christmas dinner.  You make sure that our country doesn’t forget those who served us when they have a time of need.

There’s nary a program name or a 14% percent this or a discussion of logic models.  Start with the end in mind.  That’s what lights a fire in someone and causes them to care little for how much an overhead ratio goes up or down.