3 comments from this ex-CEO on indirect costs in NFPs

The report

  1. Ongoing indirect costs vs transformational indirect costs
  2. The impact on staff engagement and wellbeing

Some indirect costs are neither ongoing nor project support

From p14 of the report
  • office rent
  • audit, board costs
  • administrative staff

Impact on staff

  • Talent won’t join because underpaid
  • Talent leaves because training and career development don’t happen
  • Talent leaves because of hand-to-mouth precarity
  • Talent slowly becomes untalented — because no training, no new systems (who would employ a membership person without CRM experience?).
  • are resistant to change (‘it’s always been like this’)
  • see their personal career management (eg training) as something they have to do for themselves
  • tolerate of poor practices from managers, board, stakeholders, partners — either through ignorance that it can be better, or through fatalism that nothing ever changes
  • are so motivated by the passion of the Cause that they are sacrifice their wellbeing (and many would say that managers, CEOs and Boards tacitly encourage this)
  • Get into a mindset of embattled groupthink and resist alternative ways to deliver the mission (surplus-generating activities with different revenue models, for instance)

Power corrupts; those with power must fix the problems


  • NFP Boards need to have better conversations about these issues, and consciously support their team in clearer asks for indirect costs. This means being prepared to be unsuccessful, and creating the space for the team to ‘fail’ safely.
  • The sector needs to be clearer on outcome definition and evaluation — so this becomes easier and the focus of reporting, rather than financial reporting
  • Funders need to collaborate in changing the culture (noting many already are), which is starting with this report and needs to go further.

Purpose first, then developing people, culture and systems to better deliver. Formerly @reneworgau, @acmi @museumsvictoria @railwaymuseum @NHM_London. he/him

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Paul Bowers

Paul Bowers

Purpose first, then developing people, culture and systems to better deliver. Formerly @reneworgau, @acmi @museumsvictoria @railwaymuseum @NHM_London. he/him

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