Changing the Conversation Around Nonprofit “Overhead”

At Tracy Community Connections Center (TCCC), we often hear donors ask an important question: “How much of my donation goes directly to helping people?” It’s a fair question, but it’s also part of a larger conversation happening across the nonprofit world about something called the “overhead myth.”

The overhead myth is the belief that a nonprofit is more effective simply because it spends less on things like staffing, technology, transportation, utilities, or administrative support. While it may sound logical at first, the reality is that these expenses are not wasteful but essential to making programs work. Organizations across the country, including major nonprofit evaluators and charity watchdogs, have pushed back against the idea that low overhead automatically equals high impact.

At TCCC, the services people see every day like our shower and laundry programs, street outreach, housing navigation, case management, and recuperative care support, all depend on much more than supplies alone. Our outreach team needs vehicles, fuel, training, phones, and safety equipment to connect with unhoused individuals throughout the community. Our shower and laundry programs require trailers, maintenance, utilities, storage, and staff to operate consistently each week. Our case managers need computers, secure systems, and office space to help clients apply for benefits, connect with housing resources, and coordinate care.

In other words, the work behind the scenes is what makes the direct services possible.

Investing in staff is especially important. Homelessness and housing instability are complex issues, and meaningful support requires experienced, compassionate people who can build trust and navigate difficult situations alongside clients. When nonprofits are expected to operate with minimal staffing or outdated systems just to appear “efficient,” it can lead to burnout, turnover, and reduced quality of care. Strong infrastructure allows organizations to respond consistently, safely, and effectively.

What truly matters is impact. At TCCC, success is measured by the people we serve and the lives being changed, not by how low we can keep a percentage on a spreadsheet. It’s the individual who avoided eviction because of rental assistance. The client who moved from a tent into housing. The person who found stability through case management, hygiene services, and ongoing support. These outcomes happen because a dedicated team and strong community support system are in place to make them possible.

We believe transparency matters, and we’re grateful for every donor, volunteer, and community partner who invests not only in our programs, but in the people and infrastructure that allow those programs to grow and succeed. Supporting a nonprofit means supporting the full picture of what it takes to create lasting change.