Tag Archives: funding restriction

Dear business community: Please remember these 10 things about nonprofits

apple-orangeMy friends from the business community:

As an Executive Director of a nonprofit, I want to say that I love you guys. Almost as much as we all love the Seahawks (Go Hawks!). You do so much to sustain our work—volunteering countless hours, donating funds to programs, and telling your friends about us so they can help too. We rely on you. The work is not possible without you. Whenever we get one of you on our board or development committee, it’s like Christmas.

However, there are a few things I’d love to remind you of, stuff like fundamental differences between nonprofits and for-profits and the challenges we face. I know, you probably have heard some of this already. But it’ll be really good for us to go over them again, so we can more effectively work together to make the world better:

  • Nonprofit funding is restricted. That is something we repeat over and over, but I’m not sure you actually understand how restricted it is. Imagine that you have a business selling software for $100 a pop. I buy a copy, and I give you $100, but then I say “You can’t spend any of this money I’m paying you on your salary, or on your rent or heating for your business. It can only be used to for you to buy copy paper and no more than 80 binder clips.” Now have all your customers say stuff like that to you each time they buy your software. That’s how it works in nonprofit, but replace “customers” with “funders.” It is not fun trying to figure out who is paying for what and how to work within this structure, but luckily it only takes up 60% of our time.
  • (Hilarious side story: Speaking of copy paper and binder clips, one of my ED friends sometimes “dumpster dives” for office supplies. On her last dive, she scored a roll of masking tape and an unopened container of poster paint (woohoo!)—and her board still complains that her organization spent over $1200 in supplies in 2013).
  • No one wants to pay for unsexy “admin” things. These are things like HR, marketing, fundraising, the ED or Development Director’s salary, etc. This is why we don’t have an HR department, or an IT person, or a marketing person, why our database (if we have one) may not be as cool as you want and why some of our marketing materials look like they were designed by bonobos. You’re frustrated that our infrastructure sucks sometimes. Well, we are too! Unfortunately, because of our funding restrictions, we can’t do much about it except to beg for free services from you and your friends.
  • (Hilarious side story: One time I was at a conference, and a business was leading a workshop on building a website. “We asked our bosses for $25,000 to develop the website,” said the presenter, “and they said, ‘Hey, we actually have extra funding.’ So they gave us $50,000!” Back then, 50K was half my organization’s operating budget and about four times my Americorps yearly wages, so I left the workshop and cried silently in a bathroom stall).
  • Our funding is unstable, and it’s not our fault. It fluctuates depending on factors such as funder priorities, the situation in Iran, the value of the Yen, and the alignment of celestial bodies. Grants are usually only for one year. So year-over-year budget comparisons are often useless, and predictions on future funding sources are educated guesses at best. Please try not to be upset when you ask us questions like “What are your budget projections for next fiscal year” and we give you seemingly wishy-washy answers like, “Well…will Mercury be in retrograde at the end of this fiscal year…?”
  • The better a job we do, the more costs we incur. That’s right; it’s weird, but it’s true. If our after-school program, for example, is awesome, more kids will attend, which means more costs. But the funding does not also increase automatically, meaning we have to serve more people with fewer resources. So then we have to spend more staff time on fundraising, which, remember, is not sexy, so people hate paying for that. If your product is awesome, your business can become stable and continue as long as demands remain stable. Not so for us nonprofits! This is why we live in a constant state of stress and fear. And why we need you on the development committee!
  • Our community members (the people we serve) are not economic units. As one of my ED friends says, “You can’t run a cost/benefit analysis on the worth of a human life, and every human being is a miracle worthy of respect and kindness and compassion.” That sounds very sappy, but we genuinely believe in crap like that, and it very frustrating when people forget this stuff and reduce human beings to numbers and statistics.
  • Success is difficult to measure. We throw around terms like “outcomes” and “metrics,” but things are so much more complex. When we’re working with people who are homeless, or mentally ill, or kids at-risk for failure, it is challenging to define success and what part we play in it. So it gets very annoying when you come in trying to impose a business framework on our programs, or get upset when we can’t give you clear answers to questions like “What’s the impact of your programs?” We’re trying to figure all this out.
  • Things can’t be “scaled” as easily as you think. Some of you are really impatient about scaling up our work. You see a great program, and you want it to be bigger, to help more people. We do too. But the clients we serve and their challenges are complex, and we work within structures that severely limit what we can do. We are constantly thinking of ways to help more people, while trying to keep our organizations from collapsing, all the while hoarding supplies for a potential zombie apocalypse (That last part–it may just be my organization that does that).
  • If you want to help, roll up your sleeves. We get plenty of advice. If you want to be helpful, roll up your sleeves and actually do something. It’s frustrating when business leaders or consultants come in and provide a report of recommendations of things we should do. These reports are often left on shelves to gather dust, since we often have no time or resources to tackle them. If you want to help, take lead on a few of these things you recommend.
  • We chose to do this work. That’s right, we chose jobs that are unstable, under-appreciated, challenging, low-paying, and high-stress. That does not mean we’re not as smart as people in other sectors. Once a while we meet young professionals in other professions, and their smugness and condescension are palpable, and we want to grab them by the collar and shake them. But we think of our clients and swallow our pride. Our society places much higher value on jobs like doctors, lawyers, movie stars, business owners, etc. However, most of us did not go into the nonprofit field because we failed at other professions. We do this work because we want to kick inequity’s butt, no matter how difficult it is.
  • (Hilarious side story: At my organization, which serves low-income immigrant and refugee youth and families, the clients are often amazed that I do this full time. One woman at an event asked when I will find a real job; her son was studying to be a pharmacist, she said.)
  • Finally, just because you’re really successful in one area, it doesn’t mean you are automatically great in another area. If you’re an amazing heart surgeon, it doesn’t mean you’re automatically a great singer. If you’re an awesome dancer, it doesn’t mean you’re now a really kickass chef. And yet we meet so many of you who are successful in the business sector who now think that you automatically know how to run a nonprofit, or lead an education reform movement, or counsel us nonprofit folks on how to do our work. One of the most irksome things we experience is when business people, after a limited time trying to understand the organization, start giving advice. We’ll try to be thankful, since you’re a potential donor and volunteer, but seriously, the you-guys-should-do-this and you-guys-should-do-that are often irritating and not helpful at all. We don’t go to your business and tell you how to…run…quarterly reports…or, uh…improve assembly line efficiency…

At a meeting a month ago, a bunch of people and I were providing input and advice to Seattle’s new mayor as he starts his administration. A community leader stood up and said, “You have to remember that poor people are not just rich people who don’t have money. And black people are not just really dark white people.” Ahaha, that’s so true, everyone thought. They laughed. (Each of those profound statements deserves to be discussed in its own post later). I want to use the same line of thinking to remind you all that nonprofits are not just chaotic businesses with really nice employees. Until we have the same flexibility and stability of essential resources that successful businesses have, comparing one with the other is like comparing an apple with a porcupine.

Thank you for reading, and for all that you do.

Go Hawks!

***

Related Posts:

Nonprofit’s ultimate outcome: Bringing unicorns back to our world.

The sustainability question: Why it is so annoying.

Make Mondays suck a little less. Get a notice each Monday morning when a new post arrives. Subscribe to NWB by scrolling to the top right of this page and enter in your email address.