This approach ignores the fact that nonprofits’ markets usually consist of clients who are not profitable to serve—because if they were profitable to serve, the for-profit sector would be serving them. The better a nonprofit is at finding and serving its market, the poorer it will be, because though for-profit clients are a profit center, nonprofit clients are a cost center.
Fine, say the hybrid-benefit-earn-your-own-revenue people: so start a profitable business and funnel its profits into the charity. But this notion of a two-headed agency is, like most similar creatures, a monster. If nonprofits expend their limited energy on creating market-based revenue streams, they’ll be diverted from their mission-based activities. Either the marketing strategy succeeds, in which case the profit-generating people gain the power within the organization and mission falls to a sad second; or the marketing strategy fails, in which case it has consumed significant resources that should have gone to serving clients.
There are, of course, institutions for which running a business can be part and parcel of mission, for instance, job-training centers. But for mental health agencies, arts organizations, group homes, rape crisis hotlines and most of the other charities which do the important work in our society, running a business is a dangerous distraction.
What if, instead of spending time telling nonprofits how they should operate differently, business people re-examined their own operating principles? What if every business set aside 25% of its profits for investing not in the business itself but in the wider community?
In other words, instead of asking why a charity can’t be more like a business, let’s start asking why businesses don’t operate more like charities. Businesses receive all sorts of public services and protections, from the enforcement of contracts in the law courts to well-maintained roads along which to distribute their products. Why shouldn’t they be expected to contribute to the public good in return?
Most business people would say, “But our primary duty is to our shareholders, not to the public good” (and those over-influenced by Ayn Rand and the University of Chicago economics department would say “Our SOLE duty is to our shareholders, the public be damned”). Right: and the primary (or SOLE) duty of charities is to their/our clients. Anything that takes nonprofits away from that activity is perforce improper.
What’s the point of this thought experiment, in which charities chide businesses instead of the other way around? Simply to demonstrate how much business advice to charities is sheer nonsense. To presume that the voluntary sector doesn’t make a profit because it hasn’t thought about how to do so is to fundamentally misconceive its role in the wider economy.
Besides, what nonprofits need isn’t more advice: it’s more money. When business people are ready to provide that—when they’re ready to serve on Boards not as agents of disruption but as securers of resources; when they’re ready to advocate for a tax system which will underwrite the necessary work done by the voluntary sector—well, THAT will be the time for a press release.
Tags:501c3, Advocacy, Board of Directors, Boards of Directors, charity, governance, Marketing, Mission, nonprofit, Nonprofit management, nonprofits, not for profit, philanthrocapitalism, philanthropy, Poverty, Private Philanthropy, social entrepreneurship, volunteer
Posted in Advocacy, Boards of Directors, Coverage of nonprofits, Current Affairs, Earned income, Finances, Marketing, Mission, Nonprofit management, Nonprofits--General, Philanthropy and Taxation, Poverty, Private Philanthropy, Social enterprise, Technology, Volunteers/Volunteerism | 9 Comments »
March 29, 2011
In fundraising there’s an old saw that if you want someone’s money, you ask for his advice. Leave it to the ever-innovative Rahm Emanuel to turn this observation into an ultimatum, telling people equipped with useful advice that it won’t be heard unless it comes wrapped in money.
That, in effect, is the meaning of Mayor-elect Emanuel’s request to a group of Chicago foundations that they pay the costs of his transition, costs traditionally covered by leftover campaign funds, of which Emanuel has plenty. In a city whose political culture has long consisted of being punished for disagreeing with or disobeying the mayor, the foundations faced an unattractive choice: call the mayor-elect on his inappropriate pick-pocketing and look forward to 40 years in the desert, or pay the man the $2 (or $2 million, as the case may be) in order to be heard.
The Nonprofiteer doesn’t blame the foundations for ponying up, though she wishes they hadn’t: their job is to influence public policy and make change, and the mayor’s office is an important route (sometimes the only route) to doing so. But the Emanuel administration-in-waiting should never have asked for this sort of tribute. Whether intended or not, the request makes it appear that access to city government is restricted to those who tithe. There’s nothing new about that—the title “City That Works” has always ended in a silent “For Pay”—but Chicagoans might be excused for having hoped for something new post-Daley.
Many in the nonprofit sector are dismayed at having to compete with city government for the foundations’ largesse, and that’s a legitimate concern, though a belated one: the Daley administration never hesitated to ask private and foundation donors to subsidize city expenses with money that would otherwise have gone to independent community groups. (Can you say “Millennium Park”? “Olympic bid”?) But the Nonprofiteer is more concerned about a new mayor’s implying, and establishing a precedent for the idea, that even being heard on the 5th floor requires big bucks.
Some wag once said that New York was about culture and Washington about power, but Chicago was all about money. Plus ca change . . .
Tags:Advocacy, Chicago, donors, foundations, Fundraising, governance, mayor, nonprofit, nonprofits, not for profit, philanthropy, politics, Private Philanthropy, Rahm Emanuel, Relations with funders, strategic planning
Posted in Advocacy, Campaign finance, Current Affairs, Finances, Foundation Hall of Shame/Stupid Foundation Tricks, Government grants, Nonprofits--General, Private Philanthropy, Public private partnerships, Relations with funders, Strategic Planning (and the tactical kind, too) | 7 Comments »
October 26, 2010
England’s Financial Times reports concern that cuts in government grants to charities will impair the charities’ ability to provide services, and particularly to pick up the slack produced by cuts in direct government services. The Nonprofiteer wonders what this is doing in the newspaper, as it falls into the category of Dog Bites Man.
Defenders of the cuts argue that they’ll provide incentive for government-dependent charities to raise money from the private sector and individuals. While the Nonprofiteer yields to no one in her insistence that charities become less dependent on grants of any kind and spend more time asking for money from individuals, she also knows that this defense is crap—at best irresponsible, at worst deliberately false.
No one can realistically suggest that charities which have essentially been created by the government to provide services it funds (probably for the purpose of evading unions) can somehow instantly replace 95% of their operating budgets with contributions of a pound or ten, or even a hundred. It takes time to develop individual donors, and surely no one would seriously suggest that charities have neglected this task for lack of “incentive,” because government grants keep them in the lap of luxury. There’s never enough money, as a result of which there’s also never enough time to raise money if you’re also going to serve your clients.
So which is it, Mr. Cameron? Do you want charities spending their time providing services that your government now won’t, or do you want them spending their time raising money to provide those services? “Both” is not a realistic answer.
Conservative governments should really have the courage of their convictions. If you’re going to cut public services, then say to the public, “We’re not going to provide these services.” It’s just dishonest to say, “We’re not going to provide them, but don’t worry, someone else is,” when no one else has anything like the resources necessary.
Apply as appropriate to the American situation.
Tags:Advocacy, charity, donors, Fundraising, government, government funding, government grants, grantmaking, grants, International, nonprofit, Nonprofit management, nonprofits, not for profit, philanthropy, politics, Poverty, Private Philanthropy, recession, social services
Posted in Advocacy, Campaign finance, Charity scandals, Coverage of nonprofits, Finances, Fundraising, Government grants, Nonprofit management, Nonprofits--General, Poverty, Private Philanthropy, Public private partnerships, Social Service Agencies | Leave a Comment »
August 31, 2010
Jane Mayer’s excellent piece in this past week’s New Yorker about the brothers Koch, oil billionaires who’ve donated hundreds of millions to nonprofits promoting right-wing causes, finally clarified for the Nonprofiteer her unease at Bill Gates’s campaign to persuade billionaires to donate half their estates to charity. It’s not a question of who has or hasn’t taken the pledge, though that’s an entertaining parlor game. Nor is it the fact that the generosity of extremely wealthy people may not be what the rest of us have in mind when we hear the word “charity.” (The Kochs’ “charity,” for instance, is a term of art encompassing donations to all kinds of institutions, predominantly think-tanks churning out rationales for the economic interests of wealthy people and front groups to make it appear that defending those economic interests is the political will of the non-wealthy majority.)
What’s troubling about the billionaires’ pledge remains so even when the receiving causes are unexceptionable. Gates, for instance, has very generously underwritten substantial efforts by the Global Fund to Fight AIDS, Tuberculosis and Malaria. Good for him, and for the world.
But.
Even the best-intentioned best-directed private donations are a way for moneyed people to work their will on the public, while the rest of us have nothing but the vote. And when the level of contributions is discussed in fractions of $1B, it’s no longer charity within a democracy: it’s benevolent dictatorship.
Maybe our country should be giving less to treat AIDS et al and more to eradicate infant and maternal mortality through the UN Population Fund; maybe not. That’s a decision to be made by the people of the United States, through our government. It’s really not a decision for a single person.
Why not? Well, for starters, the “single person” in question is a billionaire, and thus always a man. That means almost by definition that the highest levels of charitable giving will overlook women, though we constitute more than a majority of the population. And if that’s the case—if society’s needs are met by individual whim instead of collective decisions about the greatest good for the greatest number—then what, actually, is left of self-government?
Of course, billionaires have plenty of assistance in the task of allowing economic power to trump political will. The Supreme Court’s decision in Citizens United, holding that corporations are “persons” with First Amendment rights violated by limits on their campaign spending, already put the nation quite a way down that road. But somehow it’s worse when something that sounds so benign—”half my estate to charity, because I’ve been so fortunate”—actually translates as “I set the agenda for the future of this country, because I’ve been so fortunate.”
What we really want from billionaires is for them to pay a lot more in income taxes: say, the 87% of taxable income paid in 1954, or even the 70% paid at the start of the 1980s. And then we as a group can decide where our group’s money goes. All contribute, all decide.
And what we really want from billionaires’ heirs is for them to pay the 77% estate tax rate in effect in 1941, or even the 70% estate tax rate in effect in 1976. (And let’s not hear any nonsense about “death taxes.” The dead aren’t the ones paying.) Why shouldn’t people who get money by inheritance have to pay taxes on it, just like people who get it by working?
Merely to ask that question is to answer it: no democratic society decides that people who don’t work should be privileged over those who do. Societies like that are called “aristocracies,” and all those so-called Constitutional Originalists running around hijacking elections by screaming about excessive taxation should take a moment to remember that our Constitution was designed precisely to interfere with the establishment of a government by inheritance.
The Constitution prohibits not once but twice the granting of any title of nobility; but the Framers didn’t rest there. They fought to cripple and ultimately abolish entail and primogeniture, the primary devices by which English law kept family fortunes together. Why? Because they realized that, if you’re founding a republic, it’s really not a good idea to let money keep piling up generation after generation in the same few pairs of hands.
Self-governing societies can’t operate on noblesse oblige, and societies that do aren’t truly self-governing. As Dr. Franklin said, “A republic—if you can keep it.”
Tags:501c3, Advocacy, charity, corporate giving, donors, Environmental, foundations, Fundraising, governance, International, IRS, Mission, nonprofit, Nonprofit management, nonprofits, not for profit, philanthrocapitalism, philanthropy, politics, Private Philanthropy, Relations with funders, women, Women's Issues
Posted in Advocacy, Advocacy groups, Campaign finance, corporate giving, Coverage of nonprofits, Current Affairs, Disease charities, Environmental, Finances, Fundraising, International, Mission, Nonprofit management, Nonprofits--General, Philanthropy and Taxation, Private Philanthropy, Public private partnerships, Women's Issues | 10 Comments »
May 26, 2010
Dear Nonprofiteer,
I’m the ED of a growing nonprofit doing bridge-building work on a highly divisive social issue. Our work is getting rave reviews. Our Board, however, is really struggling with its role in fundraising.
All of the nonprofit literature I’ve read says that the Board of Directors is largely responsible for raising funds for the organization, and that they typically do this through their own individual contacts and influence. But everyone on our Board was chosen for their commitment to our cause and understanding of the sensitive nature of our work, not for their contacts or influence. They’re wonderful, passionate people, but they have no fundraising experience and no wealthy or influential contacts to speak of, and they’re all geographically separate from one another. When fundraising comes up in Board meetings, everyone agrees that it must be done, but no one is sure what exactly they can do.
Our Board does have a “give or get” clause, and our Board members meet and surpass that requirement by giving generously of their own money. There’s no question of their devotion! But I’m concerned that relying too heavily on our Board members’ personal finances rather than external fundraising is a dangerous long-term proposition, and I feel like we could be doing so much more if we had a real fundraising strategy. (We have been raising other funds, but those projects have been primarily overseen by our staff.)
What say you? Are there situations where a nonprofit Board shouldn’t focus on fundraising? Or do we need to rethink things?
Signed,
Empty Pockets
Dear Empty,
Of course the people you recruited to your Board were chosen for their passionate commitment to your cause–who else would you choose for such a task? That doesn’t mean they can’t raise funds; in fact, it means they’re the people best positioned to raise money for the group, because they understand it so profoundly and can speak about it with such depth and conviction.
And they’re going to be especially wonderful fundraisers because they’re so generous themselves. Many agencies struggle with fundraising because the Board thinks someone else should put money on the line while its own members fail to do so.
But Board members have to take on the fundraising task, and there are no exceptions–not for particular kinds of organizations, nor for particular Board members whom others may think can’t afford to be involved. There’s a misconception floating around the nonprofit world that fundraising can only be done by certain kinds of people, ones with those mysterious “contacts” and “influence;” when in fact, everyone can identify prospective donors, everyone can ask, and everyone can thank.
Here’s how you get started: bring to the next Board meeting a list of five prospects whom the staff has identified through your fundraising activities to date–the people you think are most likely to be convertible into serious major donors alongside your Board members. Then divide your Board into pairs and get each pair to contact one of these small-givers-who-are-big-givers-in-waiting. The pair should take the prospect out to lunch and ask him/her for money.
How? Please see the Nonprofiteer’s never-fail luncheon ask. And, because everyone you’re dealing with is so new to this activity, spend the rest of this Board meeting practicing the never-fail ask, doing in 10 or 20 minutes what in the real world you’ll do in 60. You practice by dividing the Board into groups of three, and then having two people ask the third; the second time, you have the prospect join the asking team.
Stay on your Board members between Board meetings to assure they actually take the prospects out and ask them for money, and then have them report back at the next Board meeting. Also tell everyone to come to that next Board meeting with the name of one–one!–person they know whom they can persuade to come to lunch to talk about your agency. Reassure them that they’re not going to be required to ask their friends for money–they’re going to ask EACH OTHER’S friends for money. You can practice that at this second Board meeting.
Then keep noodging and supporting them, but let there be no doubt that this is the main thing with which they should occupy themselves now. No matter how passionate–for that matter, no matter how rich!–no Board is able to support its agency single-handedly through its personal wealth. Fundraising is essential; it’s the job of the Board; and if the people you’ve got now refuse to do it (which the Nonprofiteer doubts), go get some people who will.
And if the guidance the Nonprofiteer has just molded into a brick and thrown at your head seems daunting, hire a Board development consultant [like, say, the Nonprofiteer; but plenty of people do this] to come in and train your Board–and read the fundraising Riot Act to its members, if need be. Often Boards will hear from a consultant what they won’t hear from their employee/Executive Director, namely, that they have a clearly-defined job; that the name of the job is “fundraising;” and that they have to do it.
Tags:Advocacy, Benefit events, Board of Directors, Boards of Directors, charity, donors, Executive Director, Executive Directors, Fundraising, human resources, Management Advice Day tip, Mission, nonprofit, Nonprofit management, nonprofits, not for profit, philanthropy, Relations with funders, volunteer, volunteering
Posted in Advocacy, Advocacy groups, Benefit events, Boards of Directors, Finances, Fundraising, Mission, Nonprofit management, Nonprofits--General, Relations with funders, Volunteers/Volunteerism | 2 Comments »
March 6, 2010
to report that she’s just been published for the first time on Huffington Post, with a piece called “Full-Body Scans Are a Feminist Issue.” Over the years, some of you have mentioned that you wouldn’t mind hearing her opinions about things other than nonprofit management; be careful what you wish for!
She’s also excited to mention that she’s ramping up her consulting practice again, with a slightly altered focus: in addition to strategic planning and individual-gifts fundraising, she’s concentrating on helping nonprofits use the flood of high-skill volunteers now available in virtually every location and occupation. Her work will include Board recruitment and training, but won’t be confined to it–there must be 50 ways to take advantage of people’s passion, skills and abilities even if they’re not Board material. And the Nonprofiteer is determined to discover each and every one of those ways!
If you’re in Chicago (or have a travel budget) and want to meet with the Nonprofiteer in her guise as NFP Consulting, please just drop her an e-mail.
And meanwhile, let her know what you think of the HuffPo piece. Thanks!
Tags:Advocacy, Boards of Directors, charity, feminism, full-body scans, Fundraising, Huffington Post politics, Management Advice Day tip, NFP Consulting, nonprofit, Nonprofit management, Nonprofiteer, not for profit, philanthropy, Women's Issues
Posted in Advocacy, Boards of Directors, Fundraising, Nonprofit management, Nonprofits--General, Personnel Issues, Strategic Planning (and the tactical kind, too), Volunteers/Volunteerism, Women's Issues | 3 Comments »
January 11, 2010
The Nonprofiteer comes roaring out of seclusion to point out that big-bank donations to charity, and/or big banks’ making donations to charity mandatory among their employees, are NOT substitutes for big banks’ and bankers’ payment of a fair share of their earnings in taxes that support the operation of the United States government. (You’re welcome to translate “fair share” as “the 90-plus percent banker-bonus tax recently enacted in the United Kingdom.”)
While the Nonprofiteer is as enthusiastic as anyone about the work of the nonprofit sector–all of its work, whether advocacy or arts or higher education or social services–she hardly thinks that donations to the Metropolitan Opera and Harvard should be considered an appropriate alternative to making tax funds available for health care or schools or housing or child care–or even the military.
Taxation is the expenditure of our common funds on common purposes. Expenditure of private funds on private purposes–however worthy–is something else entirely, and the latter can’t be offered in trade for the former.
If the big banks want to dampen public outrage over the enormous bonuses they’re paying, they should take the simple step of not paying them. And, as they seem unlikely to do anything that sensible or decent, public criticism should be made law in the form of taxes and regulations to recapture the windfall profits the banks made with public money.
Charities are real entities with real work to do. We shouldn’t be treated as fig leaves for the worst excesses of capitalism.
And the Nonprofiteer certainly hopes we don’t hear from self-appointed sector spokespeople hastening to tug their forelocks and say “What a swell idea! Thank you, thank you, Goldman Sachs!” It’s not just the public at large: even nonprofits are better off with a government suitably supported by taxes than with a temporary infusion of tax-free guilt money.
Tags:Advocacy, bank bonuses, bankers, banks, charity, donations, Fundraising, Health care, Higher education, Mission, nonprofit, Nonprofit management, not for profit, philanthropy, Poverty, Private Philanthropy, Relations with funders, taxation, windfall profits
Posted in Advocacy, Charity scandals, corporate giving, Coverage of nonprofits, Current Affairs, Finances, Fundraising, Health care, Higher education, Mission, Nonprofit management, Nonprofits--General, Philanthropy and Taxation, Poverty, Private Philanthropy, Relations with funders, Social Service Agencies | 2 Comments »
August 20, 2009
Dear Nonprofiteer,
Help! I’m the new-ish ED of an organization that serves victims of intimate violence. Our bylaws require that a certain percentage of the board identify as female. I get this, and am completely supportive of it; I believe that the board composition reflects the values of the organization and its leadership, and the organization’s understanding of the world. Problem: the board pres doesn’t get it, and isn’t happy about it, and wants to remove it from the bylaws because she thinks gender has nothing to do with good governance.
For this and a couple of other reasons, I am finding myself looking at being the director of an organization whose board seems to have different values than I signed on for. I came to the organization completely inspired by its anti-oppression, progressive voice for survivors of violence- it was edgy, pushed the boundaries, had a very diverse board, etc. I am finding that through board turnover, and a board recruitment process that had excluded me, we have a more conservative, homogenous, and less connected-to-the-issue board.
I know I have an important role in board development, and the recruitment process does now include me, but I feel like it’s too late–not to mention that I don’t feel like I have the internal or external resources, support or mandate to change board members’ values and worldview to become more in line with what I understood to be the organization’s philosophy.
I know I am framing the issue as a no-win, but I can’t see out of this. Whew. Do I have to find a new job? What about the tragedy of this organization becoming a cookie-cutter social service agency, instead of an instrument of social change?
Signed,
Disappointed
Dear Disappointed:
Whether that’s a tragedy or not depends on whether your community is in need of a social service agency that serves victims of intimate partner violence. But I take your point: you signed on to make change and instead you’re simply providing services.
If the question were just the one about women on the Board, I would suggest that you sit down with your Board president and spell out to her as you’ve done to me the way in which having a certain percentage of Board members identified as female makes for better governance of the institution. It’s easy to say she “doesn’t get it,” but it’s also exclusionary and snobbish: if fostering social change is an important part of your work, then you have to be prepared to spend time with lots of people who don’t get it–so that when you’re done with them, they do.
But if as you suggest it’s a broader problem–that now you’re surrounded by people unsympathetic to your goals–you have two choices: you can throw up your hands, or you can help those people enlarge their perspectives. That’s an often-overlooked part of Board development: educating Board members after you’ve recruited them. Can you and your Board president agree that the subject of how social change intersects with social services is important enough to the Board’s governing competence to warrant a thorough conversation?
In other words: you only have to leave this group if you’re not willing to do the work of orienting and persuading people who’ve joined its Board in good faith and probably have no idea that there’s anything wrong with being “a cookie-cutter social service agency. ” If you can make them see that there is, and that there’s something more the group should be doing, you can stay.
Otherwise: the Board always wins. Find yourself a different job.
The Nonprofiteer was once hired to run an agency which she understood one way, the Board understood a different way, the staff understood a third way and the clients a fourth way. The bad news was, she didn’t realize that, and spent all her time wondering why nobody seemed to get–that term again!–what she was trying to do.
You DO realize that, and that realization gives you the chance to shape the conversation about what the agency is doing, what it used to be doing, what it could be doing, and how the Board can contribute with more than just dollars and cents. Take the lead in setting up that conversation (though perhaps have the conversation itself facilitated by a neutral outsider), and see what progress you’re able to make. The worst that will happen is you’ll end up very clear that you need to go.
Tags:Advocacy, Board of Directors, Boards of Directors, doesn't get it, Executive Director, Executive Directors, Management Advice Day tip, Mission, Nonprofit management, social change, social services, vision, Women's Issues
Posted in Advocacy, Advocacy groups, Boards of Directors, Mission, Nonprofit management, Nonprofits--General, Social Service Agencies, Volunteers/Volunteerism, Women's Issues | 4 Comments »
