Are you still chasing a “low overhead” badge of honor? Gregg Indictor, Director at Your Part-Time Controller, confronts one of the nonprofit sector’s most persistent misinterpretations: the overhead myth. With cohosts Julia Patrick and Meico Marquette Whitlock, the conversation unpacks what “overhead” actually represents, why it’s often misunderstood, and how nonprofits can more accurately reflect their financial stewardship.

Gregg begins by demystifying overhead as merely the administrative costs necessary to support any organization’s operations—nonprofit or for-profit, saying, “There is no correct overhead ratio for any organization,” noting that effectiveness should be measured by mission impact, not accounting percentages.

This fast episode fully explores cost allocation, the process of categorizing and reporting expenses across functions—such as program services, management, and fundraising. Gregg walks through the Schedule of Functional Expenses found in audits and IRS Form 990, and explains how misallocating indirect costs can produce distorted financial portraits. His emphasis on methodology—such as time and effort tracking for personnel, or square footage for facility expenses—underscores the importance of reasonable and consistent cost assignment.

Gregg highlights a powerful metric: for most nonprofits, 80–85% of expenses stem from personnel and facilities. Yet not all of those costs are necessarily “overhead”—they could very well contribute directly to mission delivery, depending on how they are allocated.

One of the key moments involves Gregg’s perspective on restricted vs. unrestricted funds. He cautions against well-meaning development practices that inadvertently solicit restricted gifts, reducing an organization’s flexibility to cover essential functions. A simple shift in donor language—from “choose your program” to “support our mission”—can dramatically improve financial resilience.

As the trio discuss transparency and internal communication, Gregg advocates for cross-departmental access to financial information, encouraging organizations to present timely reports not just to leadership, but also to program and fundraising teams. This transparency supports better decision-making and breaks down operational silos.

In a moment of clarity, Gregg quotes Dan Pallotta’s Uncharitable: “We don’t want our generation’s epitaph to read: ‘We kept charities’ overhead low.’ What we want it to read is: ‘We changed the world.’” This reframing of the narrative away from efficiency metrics toward effectiveness and impact becomes the episode’s rallying point. You’ll learn a lot watching this! Follow the ongoing conversation at #TheNonprofitShow