The Overhead Factor In Unit Cost

How much overhead is too much overhead? And how do you define overhead anyway? "Overhead" is loosely defined as expenses that are necessary for the continued functioning of an organization but not associated directly with the services offered by the organization (e.g. labor and materials used directly in providing a service).

There are conflicting opinions about the right amount of overhead, particularly for non-profit organizations. There are numerous articles, such as The Harvard Business Review piece, Nonprofits and the $100 Billion Opportunity, that call current overhead expenses into question. Charity Navigator notes that overhead numbers should be no . . .