Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/162340 
Authors: 
Year of Publication: 
2017
Citation: 
[Journal:] IZA World of Labor [ISSN:] 2054-9571 [Article No.:] 329 [Publisher:] Institute for the Study of Labor (IZA) [Place:] Bonn [Year:] 2017
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
Charity rating agencies often focus on overhead cost ratios in evaluating charities, and donors appear to be sensitive to these measures when deciding where to donate. Yet, there appears to be a tenuous connection between this widely-used metric and a charity’s effectiveness. There is evidence that a focus on overhead costs leads charities to underinvest in important functions, especially skilled workers. To evaluate policies that regulate overhead costs, it is necessary to examine whether donors care about overhead costs, whether they are good measures of charity effectiveness, and what effects a focus on overhead costs has on charities.
Subjects: 
charitable giving
administrative costs
philanthropy
nonprofits
JEL: 
D64
H41
J31
Persistent Identifier of the first edition: 
Document Type: 
Article

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