The Chicken or the Egg in the Nonprofit Sector
Many issues nonprofits face seem to present a chicken or egg scenario. Groups often come to Brightspot needing to raise more money and wanting a plan to guide them. Great, but guess what? They need more staff to execute the plan. Guess what again? They need more money to hire that staff. Guess what a third time? They can’t get the money to hire staff without raising more money. Uhhh…..
On a broader level, this dynamic is a barrier to making progress on some larger issues (highlighted below) plaguing the sector.
Donors and funders need to trust that nonprofits know what they need.
Individual donors are often motivated by what their dollars do (“How many meals does my $250 provide?”) and funders often give program-based funding, wanting to see “impact” as a result of their grants.
A nonprofit needs money for programs, but also to effectively market them, pay for heating where they happen, and hire qualified staff to run them.
Organization leaders are the experts in their specific community issues and how to tackle them. Even though I’m footing the bill, if I hovered alongside the contractor renovating my home to dictate which tools, materials, or process to use, the house would collapse in a heartbeat. Why can’t philanthropy trust nonprofits to do their work and reflect this trust in how they give?
Related, we need to stop evaluating organizations on their “overhead.”
While movement has been made to shift away from this metric, an average donor often still assesses the value of their donation by “how much of it goes directly to people being served.” A low “overhead rate” is still deemed a badge of honor or symbol of a “good charity.”
Donors also want to support entities that have skilled leadership, good communications, and well-established practices so they have confidence in where and how funds are stewarded.
How can an organization acquire those things and become a well-functioning nonprofit if they don’t spend money on them?
Boards need to change.
Organizations rely heavily on boards for fundraising.
As a result, boards are often composed of individuals that have the financial capacity to donate, or networks of friends they can hit up for contributions.
How can an organization effectively deliver programs and services for a community if the power rests with people that represent just one itty bitty slice of that community? It’s time to shift away from the antiquated idea of requiring every board member to make a financial contribution by building a culture where the focus isn’t solely on wealth.
We need to focus on the systems.
Nonprofits exist to solve community problems.
Community problems exist because our historically unjust systems have created them.
Yet, it’s rare to find funding that supports advocacy, policy change, or radical work to transform those systems, which would help to get at the heart of the problem. And often nonprofits are limited by their legal structures – are they permitted to advocate or is that breaking the law? How can nonprofits make a dent in really improving our communities if we don’t at least help them tackle the problematic system itself?
For example, one of our clients is NH Hunger Solutions, an organization that helps connect more New Hampshire residents to existing food programs and resources, advocating to address the root causes of hunger. They promote legislation and build coalitions that will improve food systems, yet it’s difficult to attract support because unlike food banks (which we desperately need), they don’t give away food. While distributing more food is essential, why can’t philanthropy also be motivated by helping ensure fewer people need that food?
Moving the needle on these issues necessitates a collective effort. While arguably, donors and funders hold the most power, nonprofits can also make changes in the way they communicate to donors, how they fundraise, and what they ask of their boards to help shift this culture.
I don’t think we’ll ever answer which came first – the chicken or the egg – but in many ways it doesn’t matter. Nonprofits just need our trust.