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Red Cross uses misleading overhead ratios in reports

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Scholars at the Transnational NGO Initiative have been among the many voices that have called in the last 5-10 years for ‘busting the overhead myth’ that claims that nonprofits should primarily be assessed on what their program-overhead cost ratios are. Overhead ratios tell us nothing about the effectiveness of the nonprofit or about the cost effectiveness of outcomes it produces. However, transparency about the true overhead costs of a nonprofit continues to be important of course and this articles showcases how the American Red Cross recently has received critical media coverage about its apparent attempt to significantly understate its true overhead ratios.

Read the article here

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