now available. Step into the future today!

How to Reduce Your Overhead to Zero Today

If zero overhead is the aim, you can accomplish it instantly: shut down. Your organization’s overhead runs to zero. But now, zero overhead also implies zero mission impact. That’s unusually a desirable goal for a nonprofit.

So, what’s overhead?

However, a careful look at an organization’s overhead does make a lot of sense. Usually, people used the term “overhead” to point to what the Financial Accounting Standards Board (FASB), describes as “Management and General Activities: Supporting activities that are not directly identifiable with one or more program, fundraising, or membership development activities.”

Notice that 100% overhead and 0% overhead deliver the same difficulty: No work undeviatingly related to the purpose of the organization gets done. For me, that’s a clear signal that overhead alone cannot be a beneficial measure of outcomes.

Reasonable Actions

From my comprehensive working experience in various portions of the nonprofit sector; I’ve found the following five practices helpful.

  1. Track time and costs

Though I don’t like time tracking much, I’ve learned to do it, mostly by arranging my Google Calendar to precisely reflect my activities. When I managed consultants; we always recorded time in an online system, which made time tracking easier and more accurate.

And look for an accounting system that enables you to tag expenses; so that you can assess revenue and expenses in various ways.

  1. Allocate accurately

An organization’s leaders must understand what the employees do with their time. In some examples, a bit more money used in technology can effectively reduce workers’ time spent on some projects.

  1. Eliminate off-mission activities

Ensure all the events and activities the organization gets involved in is either a) mission-focused, or b) provides a clear benefit in support of the organization’s mission. Often, I’ve noticed organizations engage in “fundraising events” that fail to actually revise funds, or partake in programs that only tangentially relate to the core mission of the company. Stopping these activities often helps decrease overhead, while also freeing resources to develop mission-focused activities simultaneously.

  1. Share more data, not less

If number one becomes considerable for the people — overhead — then that is the only metric they can employ to gauge an organization’s impact. Most nonprofit organizations measure several other things: people helped/served, cost per person helped, volunteer times, visitor/member numbers, total program expenses, satisfaction ranks, and on, and on, and on.

Unfortunately, most nonprofit organizations also restrict access to this data to the team and/or board members. That’s a slip. I’d love to see nonprofits emulate the example set by the for-profit startup, Buffer. Think you can’t declare salaries, revenue or expense data? Think again. Take a look at Buffer’s transparency page. You’ll notice salary information, revenue data, pricing data, diversity info, a product roadmap, and more.

  1. Never value measurement more than your mission

Bear in mind that the purpose your organization exists may not be simple to measure in conventional business metric terms. For instance, a symphony orchestra administrator may readily count the number of people lying in seats in a performance hall. But when the music streams performances live, counting gets difficult. You can count the number of simultaneous streams, but the reach may likely be more, since there may be more than one person enjoying a stream.

And things that matter may not be easy to measure. What is the assessable value of inculcating a love for the arts? Or reading? Or helping a person in crisis? Never forget that the focus of a nonprofit organization is on resolving a very human problem. In that context, it will always be a slip to prioritize metrics over the mission.

Alma Reed is an author and researcher dedicated to enhancing productivity. He is deeply interested in areas like time management, increasing productivity, and fostering healthy routines. Through his writing, he aims to assist people in boosting their job performance and attaining an ideal balance between work and life.

Table of Contents

Related articles

Improves your team's productivity and conveniently manage all your work timelines

Sign up for free. No credit card required.