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While the DEA and SFA rankings are statistically correlated, overhead ratio rankings are negatively correlated with both SFA and DEA rankings. To investigate this, we use financial and operational data to rank the efficiency of Habitat for Humanity affiliates with the overhead and administrative ratio, as well as data envelopment analysis (DEA) and stochastic frontier analysis (SFA), two of the most popular efficiency measures. Beyond this point, further spending on overhead can yield negative returns.Īlthough the overhead ratio might measure top-heaviness, we argue that it does not measure nonprofit efficiency. Increased spending on overhead can improve program outcomes up to the optimal point. Just keep in mind that efficiency shouldn't be taken as a be all end all when it comes to which charities you should donate to, the most important part is the amount of impact it has.Ĭontrary to the conventional wisdom that lower overhead is better, the results of different model specifications consistently show an optimal level of overhead captured by an inverted U-shaped relationship between the overhead cost ratio and program outcomes. If that of concern to you, consider donating directly to the charities. DR claims 100% efficiency (no fundraising or other resource allocation)Īlso for those that might take this into consideration: Be aware that while the funds from your purchase are being donated to these charities, you are technically purchasing from Humble, and therefore your 'donation' is not tax-deductible.Razom provides ? (I had a harder time finding this information, if anyone else knows, please add).If you feel strongly for or against, you can modify your donation percentage amounts among the available charities.Ĭharity efficiency (based on financial reports and reported stats): The four charities included in the bundle are Razom for Ukraine, International Rescue Committee (IRC), International Medical Core, and Direct Relief, all of which are legitimate and recognized charities which provide transparency on how the funds are distributed/used. The payments are being made via the PayPal giving fund, which provides 100% of the donation to the charities selected. Humble is providing 100% of the donations to the individual charities involved in the bundle.

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