# Core Mission Support > *Core Mission Support* redefines "overhead" expenses as essential for nonprofit success, highlighting that strong finance, HR, and governance are crucial for achieving mission goals. This view argues that overhead is not a distraction but a necessary foundation for impactful programs and services. SEE ALSO: [[Iron Triangle]] RELATED FUNCTIONS: [[Governance]], [[Accounting]], [[Finance]], [[Gifts & Grants]] "Overhead" expenses include general business costs that cannot be assigned to a specific product or service. Rather than being *direct* expenses that vary with the quantity of what you're making, overhead expenses are *indirect* and continuous – "incurred in the upkeep or running of a plant, premises, or business" according to the *Oxford English Dictionary* – including things like rent, administration, utilities, and such. Thoughtful allocation and understanding of direct and indirect costs are core requirements of any business practice – for-profit or nonprofit. Without tracking and analyzing their dynamic and relationship, you can't understand the "true cost" of what you're making, or the profit or subsidy required to keep making it over time. For nonprofits, indirect costs create an additional challenge. Since overhead is not directly assigned to a product or service, it's often perceived by funders and policy-makers as a distraction from mission fulfillment. Charity Watch, for example, [considers a nonprofit "efficient"](https://www.charitywatch.org/our-charity-rating-process) if it keeps overhead expenses below 25 percent of total expenses. Other research suggests that [35 percent is a more appropriate overhead rate](https://theconversation.com/nonprofits-may-need-to-spend-about-one-third-of-their-budget-on-overhead-to-thrive-contradicting-a-rule-of-thumb-for-donors-188792) to avoid a "starvation cycle." ![[core_mission_old.png|300]] In his article for Propel Nonprofits, "[A Graphic Re-visioning of Nonprofit Overhead](https://www.propelnonprofits.org/blog/a-graphic-re-visioning-of-nonprofit-overhead/)," Curtis Klotz offers a different image (and metaphor) for overhead and its relationship to nonprofit success. Rather than the "tired old view" of overhead as reducing program impact (see pie chart above), he suggests that overhead is the essential foundation of program impact (see below). ![[core_mission_new.png|300]] You can't build durable, sustainable, impactful programs or services that achieve your mission without a solid base of "core mission support" – strong, strategic finance and accounting; progressive human resources; responsive governance; talented and engaged development staff. Reframing and rethinking overhead as "core mission support" can be productive not only in luring and securing external funding, but also in understanding and adapting your enterprise. As Klotz states it: > "The growth and effectiveness of our mission work depends on having a solid core at the center of our organizations. Investing in our infrastructure is savvy, prudent, and absolutely necessary." --- ## Tags (click to view related pages) #frameworks #functions/finance #functions/accounting #functions/program_production #functions/gifts_grants #sapling