Breaking the Starvation Cycle: How international funders can stop trapping their grantees in the starvation cycle and start building resilience

The Overhead Myth that suggests that low overheads in non-profits is a sign of efficiency has led to many donors underfunding the associated administration costs of their project grants and driven a vicious ‘starvation cycle’. Through the Administration Costs Research Project, we gathered evidence on the extent to which international donor funding covers the real administration costs of national NGOs. The Funders for Real Cost, Real Change (FRC), a collaborative of private foundations, commissioned this research and sought recommendations on how funders could provide adequate cost coverage and strengthen their grantees’ financial health and resilience.