Overhead Policy

Dear Valued Supporter,

Penny Appeal USA was launched with a simple mission, to serve people here in the US and around the world who struggle with poverty every day of their lives. This mission 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 to continue implementing more programs and help more people consistently every year. 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, which means that all (100%) of the individual donations went directly to those in need.

While this was a blessing for us, we have in the last couple of years been using a percentage of individual donations to support the overhead costs as institutional funding is not always guaranteed. Since 2019, the overhead costs have averaged 27% of donations. These investments allow PAUSA to build a well-skilled organization to deliver impactful and sustainable programs and ensure all resources are prioritized, while safeguarding strong reporting ethics and transparency. If you would like to support strategic overhead costs to enable more individual donations to directly support the impactful programs then please reach out to us here.

Contrary to common opinion, the amount of money a charity spends on overhead is not a true measure of its performance. As a reference, kindly read the letter below from America’s leading sources of information on charities to discover their thoughts on overhead costs. It is enlightening to read their conclusion that many charities should spend more, not less, on overhead.

The needy are depending on your support.

For more on this topic, you can read this article written by Oussama Mezoui – a non-profit industry expert: Ramadan is here: What you need to know about nonprofit overhead costs!