Why invest in the core?
The average nonprofit grant allows a maximum of 10% of its funds to be allocated towards indirect costs. Charity Navigator gives lower scores to any organization spending over 15% of its budget on administrative expenses. Most for-profit businesses, however, invest around 35% of their total expenses in indirect costs.
Chronic under-investment in core organizational capabilities affects a nonprofit's ability to make the most impact. Our conversations with over 60 homeless and housing service providers identified a number of common challenges resulting from under-investment in the core:
Strained case loads and inefficient processes leading to staff burnout
Insufficient technology systems to improve processes, manage data requests, and generate meaningful insights
Lack of resources for program innovation or improvements
Inconsistent training and fidelity implementation
All of these challenges contribute to greater program costs in terms of employee time, stress, and turnover and reduced service quality (or gaps in service) to end-clients who are experiencing or at risk of homelessness.
HousingFirst Lab is working to solve these challenges. We engage highly skilled private sector resources to help homelessness and housing agencies solve organizational barriers, expand their impact, and ultimately reduce the number of people experiencing homelessness.
Read more in our new infographic.