As cannabis is legalized in more states, the industry continues to bring in billions of dollars, and support for nationwide legalization grows, nonprofits increasingly find themselves asking: is it ethical to accept donations from cannabis companies?  Click here to read the full article.

As we approach the season of giving, we are delighted to share heartening news from the UCCS College of Public Service. Assistant Professors Jessica Berrett (Public Administration) and Stephanie Gangemi (Social Work) have dedicated their time and creativity to support Pikes Peak Habitat for Humanity’s admirable cause this holiday season. Click here to read full article.

A University of Colorado, Colorado Springs professor is defending the Colorado Healing Fund’s overhead costs after criticism about spending 10% of donations on expenses. Jessica Berrett is an assistant professor who explained that the backlash toward the fund is the result of a concept called the ‘overhead myth.’ Professor Berrett said the overhead myth is ‘the false notion that overhead spending is negatively related to nonprofit effectiveness, and when I’m talking about nonprofit effectiveness, I’m talking about the outcomes and the impact that a nonprofit is creating in a community.” Click here to read the full article.

Billions of dollars in donations by MacKenzie Scott and her husband, Dan Jewett, to 500 nonprofits during the past 12 months have been lauded not only for their transformative size but the unrestricted nature of the contributions. Now new research suggests that donor-restricted gifts have a negative impact on charities. Click here to read the full article.

Americans are obsessed with doing more with less. So it may not surprise you to hear that when donors, foundations and watchdog organizations choose causes to support, they often focus on overhead ratios - or how much charities spend on expenses such as information technology and office space. Click here to read full article.

The less a nonprofit spends on overhead, the better, right? After all, that leaves more money available to fund the charity’s programs. It’s simplistic logic. The problem is, it’s too simple. Many potential donors rely on the ratio of overhead expenses to total spending to judge a nonprofit’s efficiency in achieving its goals. And for many, a charity’s efficiency is an important factor—sometimes the determine factor—in deciding whether to make a contribution. Click here to read full article.

A recent study from North Carolina State University finds that the tool most often used to assess the efficiency of nonprofit organizations isn’t just inaccurate – it can actually be negatively correlated with efficiency. At issue is something called the overhead ratio, which is the amount of money a nonprofit organization spends on overhead – such as infrastructure, executive compensation and day-to-day management – relative to overall spending. Overhead spending does not include funding spent on implementing programs, such as program staff salaries. Click here to read the full article.

In a recent study coming out of NC State, researchers Jason Coupet and Jessica Berrett challenge the status quo of using financial ratios for measuring the efficiency of nonprofits. The researchers argue that relying on measures like the overhead ratio is an inappropriate evaluation of efficiency because it does not consider outputs. Instead, they suggest alternative models, pushing for a more instrumental approach that can take into account the actual services that nonprofits provide. Click here to read the full article.

Nonprofit overhead seems to be the most popular way to evaluate nonprofits, although even watchdogs that made program and expense ratios a focus are trying to come up with other ways to measure an organization’s effectiveness. Jason Coupet, assistant professor in the department of public administration at North Carolina State University, and Jessica Haynie, a third-year doctoral candidate, poke holes in the idea of nonprofit overhead as a way to rate a charity but also come up with alternatives. Their paper titled “Toward a valid approach to nonprofit efficiency measurement” first was published in the journal, Nonprofit Management & Leadership. The duo used financial and operational data to rank the efficiency of hundreds of Habitat for Humanity affiliates using the overhead ratio but also employed two economic models that measure efficiency: Data Envelopment Analysis (DEA) and Stochastic Frontier Analysis (SFA). Click here to listen to the interview.

Researchers Jason Coupet and Jessica Berrett discuss their recent paper “Does the Overhead Ratio Measure Efficiency?” and the complex dynamics between academic research and nonprofit practice. Click here to listen to the interview.

Nonprofit leaders often blast the “overhead myth”—the idea that charities that spend a lot on administration and fundraising are not effective or efficient. North Carolina State University researchers Jason Coupet and Jessica Haynie took a closer look at the relationship between overhead and results by examining the work of a national nonprofit that provides housing for the poor. Click here to read the full article.