Overhead Policy

Dear Valued Supporter,

When we launched Penny Appeal USA we had one simple objective; to serve people here in the US and around the world who struggle with poverty every day of their lives. That mission is what continues to drive us today.

We come to work so villagers who lack access to water no longer have to walk miles for clean drinking water. We come to work so children who aren’t afforded the chance of education are able to go to school and make a future for themselves. We come to work so refugees who have nothing but the clothes on their back are able to receive shelter, food, medication, and a chance of a brighter tomorrow.

In order to provide our beneficiaries with the best service possible, we spend not only on the direct programs we implement but in a range of other areas. We invest in training, planning, evaluation, and in our internal systems— as well as in fundraising efforts that enable us to both sustain the organization and grow it so that we can implement more programs and help more people in the years to come. These latter costs are commonly referred to as overhead costs.

The percentage we spend on overhead varies each year. It depends on a number of factors including where we are in our growth cycle, the number of programs finalized within that fiscal year, and the amount invested in infrastructure. The percentage has changed each of our first five years and will continue to change. In 2016, 2017, and 2018, 100% of our overhead costs were covered by institutional funders, meaning that all private donations went straight to programs.

While this was a blessing for us, we have in the last couple of years been using a percentage of private donations to support our overhead costs as institutional funding is not always guaranteed. These costs enable us to build a sustainable organization, which in turn enables us to implement sustainable and impactful programs.

Contrary to common opinion, the amount of money a charity spends on overhead is a poor measure of its performance. You don’t have to take our word for it. Read the letter below from America’s leading sources of information on charities to discover what they are saying about overhead costs. You may be surprised to read their conclusion that many charities should spend more, not less, on overhead.

We hope we can count on your support.

For more on this topic, you can read this article below written by our Founder Oussama Mezoui in Ramadan 2021. Ramadan is here: What you need to know about nonprofit overhead costs!