Another challenge with overhead ratios is that they are proxies for trust. People trust XX% of the dollar goes to the mission because it seems honest (even though a scam can fake this number along with all of the others).
People want to believe in something bigger than themselves. This credulity means that we fall for cons. But it also means that the real thing is that much more inspiring.
There are five sources that I would hold up as ways to prove yourself to someone you just met — that new constituent that you are on a first date with:
- Charity Navigator’s Accountability and Transparency measures. I know. I gave Charity Navigator a very hard time on Wednesday. But that’s only because they deserve it.
And if you do well there, you can point there when donors complain about your low scores on the financial side of things, where you should be aiming for about two stars, maybe three.
- The Better Business Bureau Wise Giving standards here. BBB is a known name and their seal can help as a trust reinforcer online and off. I wouldn’t put it on your outer envelope since plainer envelopes get opened more, but on reply devices can help. There’s good stuff here on cause-related marketing standard as well that other ratings don’t go into as much.
They also made this great chart:
- GuideStar. If you haven’t been there in a while, they have a beautiful new redesign that helps nonprofits lay out their logic models and the way they are making an impact. Moreover, they don’t have a bunch of pseudo-experts spending five minutes trying to understand and judge the work of actual experts’ lifetime of experience on a topic like some organizations who will remain nameless (*cough*cough*CharityNavigator3.0*cough*cough). Instead, they let you lay out your arguments and let educated donors decide.
- Independent Sector. While I don’t know of a rating system or a seal that comes from this, the 33 principles are really good and worthy for board governance.
- Great Nonprofits. A different model where your constituents let you, and everyone else, know what they think of you. At first, it can be a little heavily weighted toward the loud disgruntled (as can any rating system: read Yelp lately?), but once you make it a part of your marketing, testimonials will come in, building trust and social proof.
These are all good ways of building trust without resorting to the overhead rate that cheapens us all.