This is a question near and dear to my heart, since I work in the not-for-profit sector (
www.freeformsolutions.ca) and provide IT consulting and support to a wide variety of charitable and not-for-profit organizations.
Some of the comments here are a little misguided. The biggest misconception people outside the not-for-profit sector have about the organizations in the sector, is the idea that paying people and incurring admin costs is somehow a bad thing. As if these organizations can carry out their work entirely through volunteer effort and good wishes!
This attitude is the most destructive force in the way of charities and not-for-profits fulfilling their missions. Much has been written about it. My favourite piece is here:
http://www.ssireview.org/articles/entry/the_nonprofit_starvation_cycle/
Not-for-profits are businesses that operate for a motive other than making money. That is all. They have exactly the same operational requirements for HR, IT, Finance and Admin, that similarly sized organizations have. What for-profit organization would fire their entire HR and IT department and then tell their shareholders they were being "efficient"?! The not-for-profit sector is the only part of the economy that seems to be under pressure to be extremely inefficient, and that is somehow seen as a virtue.
Real-life story...a former colleague used to be an IT manager in an African hot spot working for an international aid organization that shall remain nameless. This organization prided itself on spending a tiny fraction of its donations on "overhead" and directing the overwhelming majority to "services". Well, they didn't take my colleague's advice to buy the expensive satellite phones they needed to coordinate supplies between their home base in Europe and the places on the ground where they were operating.
The result...a shipment of food ended up queued up for the wrong time and they had to charter a plane to get it to Africa asap. It cost $40,000 to charter the plane. It would have cost $12,000 for the satellite phones they had been told they needed. They didn't want to spend the $12,000 on the phones because that wasn't going to feed anyone. And you can bet the $40,000 for the plane just got recorded as "delivering services". Afterall, it was literally delivering food to Africa.
Next time you see an organization that says they spend all their money feeding the hungry or helping do X, Y or Z...ask yourself what it is that they're NOT doing. Chances are, they're not operating sustainably or efficiently.
--Julian