factual

Overhead Metric Rests on Multiple False Theories

The overhead ratio is deeply flawed because it operates on a mistaken theory of waste (the 90 cents going to the cause may itself be wasted), tells you nothing about service quality (the soup could be rancid), depends entirely on how broadly the charity defines its cause, and offers false transparency since the underlying accounting and definitions are hidden.

factualpending

Speaker

Dan Pallotta

Evidence Quote

the percentage of your donation that goes to the cause depends entirely on how the charity defines the cause. So, the more broadly they define the cause, the higher the percentage they can tell you is going to the cause.

Source

Dan Pallotta on Charity and the Culture of the Non-Profit SectorEconTalk
Created: 6/13/2026, 12:09:33 AM

My Notes

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