Funding for Overhead Expenses

A common challenge for nonprofit organizations is obtaining funding to cover administrative costs, especially when foundations limit how much overhead they are willing to cover in their grants.

What’s the typical limit for overhead costs as part of a program grant? Results from a recent survey conducted by the Center on Philanthropy at Indiana University indicated that the median percentage permitted by foundations was 15% of direct program costs. Foundations often allow nonprofits to allocate these funds for salaries, supplies, and other costs.

Some organizations may submit proposals specifically for overhead expenses. In those instances, foundations are more likely to fund strategic planning initiatives and staff training than employee salaries.

For additional survey results, download the Paying for Overhead Study at the Center on Philanthropy's web site.