Why Capacity Is Not Overhead

Few words in philanthropy have become more misleading than 'overhead.'

The term suggests administrative activities exist outside the real work of conservation and implies minimizing administrative costs so more resources can be directed toward projects in the field. Donors often express this preference with the best of intentions. They want their contribution to protect more land, restore more forest and river or conserve more species. Understandably, they want as much of their investment as possible to reach the landscape or waterscape itself.

The instinct is reasonable.

However, conservation does not happen independently from the day-to-day work organizations carry forward. Every acre or hectare restored, every watershed protected, every scientific survey completed and every agreement negotiated with a community depends upon people working within institutions capable of sustained effort over many years. The workload spread may function like this: one person recruits and manages staff while someone else maintains financial records, negotiates with government agencies and resolves disputes within communities. Or it might resemble something similar to this: someone ensures that salaries are paid, vehicles remain operational and legal obligations are met while another safeguards scientific data and renews permits while someone else deepens partnerships so they continue from one year to the next.

These functions are often described as administrative.

In reality, they are the operating system of conservation.

Without these functions, projects continue only for as long as external funding remains available. Once the grant concludes, the organization returns to rebuilding the same capacities without strengthening capacities from the outset.

This creates an inefficient cycle.

Organizations devote considerable time preparing proposals rather than nourishing their institutions. Staff move from one restricted grant to another, assembling budgets to satisfy donor categories rather than organizational priorities. Essential positions remain underfunded because they cannot easily be assigned to a single project. Financial reserves remain inadequate because unrestricted support is unavailable. Leadership spends increasing amounts of time fundraising simply to maintain existing operations.

None of this reflects poor management.

It reflects the incentives created by the funding environment.

Ironically, many donors would find these same practices unacceptable in the organizations they lead. Successful for-profit businesses continuously invest in themselves through finance, human resources, legal counsel, communications, information systems, professional development, succession planning and organizational strategy. These investments are rarely viewed as distractions from the mission. In fact, they are recognized as essential to executing it.

Indeed, organizations working in remote landscapes and seascapes often require greater institutional capacity than their urban counterparts. They operate across difficult terrain, navigate changing political environments, maintain relationships with multiple communities, respond to environmental uncertainty and manage increasingly sophisticated scientific, financial and legal responsibilities. Asking these organizations to accomplish all of this while treating institutional investment as an undesirable expense misunderstands the nature of their work.

When donors support institutional capacity at exceptional organizations, they are not funding overhead instead of conservation. They are funding the conditions allowing conservation to continue long after they are gone. From our perspective, this is the highest return on investment. It is also the highest ambition conservation philanthropy can achieve.