Although many foundations prefer to support direct programmatic activities, many do give grants to help nonprofits cover administrative costs, also known as general operating expenses or overhead costs.
Our database, Foundation Directory Online, allows you to search for funders based on several criteria including Type of Support, of which "general operating support" is a searchable term. You can use the Directory for free at our libraries and Cooperating Collections, or purchase a subscription to use from your own computer. Using this term in the database will help you narrow down your list of potential funders to those that will support general operating expenses that are unrelated to a specific program within your nonprofit organization.
Overhead Amount as a Percentage of Overall Operating Budget
There is no single accepted standard percentage of overhead that can be applied to every nonprofit organization. Nonprofits spend varying amounts of their budget on administrative costs depending on the scope and structure of their operations. However, certain evaluating groups, such as the Better Business Bureau and Charity Navigator, promote recommended benchmarks. These benchmarks may be used by others - including potential donors - to evaluate a nonprofit's levels of efficiency.
Acceptable Overhead Rates Within a Project Proposal to a Foundation
Same as in the previous section, there is no single accepted overhead rate that applies to every nonprofit organization, and this pertains to indirect costs associated with specific project proposals well. But many funders have policies regarding the percentage of overhead that they will allow within a project budget. Some do not allow any overhead at all to be included, while others allow overhead to be a specific percentage of total costs or personnel costs. To learn more about proposal budgeting, take our free course, Proposal Budgeting Basics, available online or as an in-person class.
Selected resources below may also be helpful.
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