“Well,” he said, “as a white guy who has done this for a while, my advice for you is to be more like a white guy.” I nearly choked on the bar of raspberries dark chocolate I was eating for lunch. “What do you mean?” I asked. Continue reading
A few weeks ago I called up a program officer of a foundation to discuss my organization’s amazing idea to bring more immigrant and refugee leaders into the nonprofit field. “That’s a great idea,” said the program officer, “but what’s your sustainability plan? We don’t tend to support projects unless we know they will be financially independent in the future.”
“Well,” I said, “I have a great plan for that. Have you heard of teeth tattoo? No? You will! Dental adornment is going to be the latest thing, believe you me. Think about it: the Seahawks logo on your incisors! We will open a teeth tattoo parlor, and it will generate literally billions of dollars, enough to fund the project forever. But we need seed money. So how about 50K from you guys?”
All right, I didn’t say that. I waffled something that sounded intelligent—“We are building up our base of individual donors, establishing relationships with local businesses, and using the Synergistic Paradigm Action Matrix in order to find the nexus between our strategies and adaptive advantage”—like a good grantseeker is trained to do. We talked some more. Then I hung up and unwrapped a bar of dark chocolate and ate it, both me and the chocolate 72% bitter.
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.
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Last week I wrote about the Sustainability Question and how it is symptomatic of an ineffective funding system where funders and nonprofits are not equal partners but more like frenemies. This apparently resonated with many readers, at least 138, since that’s how many people shared it on Facebook, and only 26 of those were from me mandating staff to do it. “Yeah, Vu, high-five!” said a colleague at a meeting, and we high-fived, which was tricky, since I was holding my 5-month-old baby Viet. We are doing a nanny-share with another Executive Director, but even with the split costs, we could only afford it four days a week, so on Fridays, we two EDs tote our babies around.
The post sparked some great conversations, especially around the challenges of communication between funders and nonprofits. “I call it the Wall of Philanthrophy,” said one of my ED friends. She painted the image of a physical wall between funders and nonprofits. “There is a tiny window in the wall, and every once a while it opens just a little bit, and maybe there is an exchange of ideas, but then it quickly closes, and it’s solid wall again.”
This reminds me of the Wall in the Game of Thrones. It is 700 feet tall, 300-mile-long wall made of solid ice to keep out the Wildlings, people who are regarded as primitive, cruel savages who have poor hygiene. The Wildlings live North of the Wall, a barren, desolate, cutthroat, and eternally wintery landscape that has very few good restaurants. Every once a while they try to cross the Wall and get South into the warm Seven Kingdoms, which are more civilized and you can go to the bathroom for more than two minutes without fear of frostbites and gangrene. While a Wildling or two sneak past the Wall here and there, in a thousand years not a single assault on the guarded Wall has succeeded.
I don’t think I’m the only one who feels like nonprofit organizations and staff are like the Wildlings trying constantly to make it past the Wall. “Sound the alarms! There is a group of Wildlings at the base of the Wall, and they are chanting ‘General Operating Funds! General Operating Funds!’ Quick, prepare the hot oil!”
This Philanthropic Wall manifests itself in many ways:
- After the site visit, we hardly see funders at programs and special events
- Nonprofits are rarely invited to conferences and other important gatherings of funders
- It takes anywhere from a week to nine years to get a hold of some funders, often when we are trying to get support for time-critical projects
- Funders almost always refuse to join committees for projects initiated by nonprofits
- Not a single funder accepted my invitation to 80’s-themed trivioke night, a combination of trivia and karaoke.
I don’t think I will be able to scale this wall in my lifetime, which is why I’ve been training my son Viet when I have him on Fridays, hoping that one day he will follow his father’s footsteps into nonprofit and continue the work. Instead of children’s stories, I’ve been reading strategic plans and annual reports to him. “One day, son, all funding will be general operating. I probably won’t be around to see that. Learn and grow strong and help to make that happen.”
Every once a while, though, there is a glimmer of hope. An Executive Director friend of mine said she was invited to a conference of funders to present her organization’s work. “Really?!” I said, nearly choking on a pluot, “you’re attending a conference of funders? No way!”
“Yeah,” she said, “but they made it amply clear that I am not to approach any of them to solicit funds. Actually, it was hinted that I shouldn’t talk much at all. In fact, I have to wear this scarlet N on my nametag to mark me as a Nonprofit.”
We nonprofits can understand why people feel that the distance between funders and nonprofits is necessary. After all, there are so many nonprofits, and funders should be fair and should not be playing favorites. However, the quest for objectivity and impartiality has led to an unhealthy adversarial system that has been harmful to the field. How can conferences to talk about funding structure and collective impact and other important stuff be effective when the people doing the direct service work and thus have first-hand knowledge of client and community needs are only marginally part of the conversation?
Plus, when there are insurmountable barriers to communication with funders, it just means that the nonprofits with the strongest relationships and connections make it through, finding support for their own projects. So many great ideas never get off the ground because many nonprofits leaders do not have the behind-the-scene connections with funders, and on the other hand, so many crappy ideas do get funded because someone knows someone who knows someone.
Funders have more power, and thus must take a larger share of the responsibility for perpetuating an ineffective system where we nonprofits spend much of our time trying to figure out how to survive instead of innovate. We have been at the base of the Wall chanting things like “general operating funds!” and “overhead is necessary” and “standardize your budget forms!” for a long time now, with little result.
But we nonprofits are not off the hook either. Like the Wildling tribes, we are constantly in competition for survival, which tends to happen when resources are scarce. We have to work together and support one another while simultaneously delivering common messages and proposed solutions. We can’t just keep grumbling at the base of the wall. We must unite.
We must ALL unite. In the Game of Thrones the Wall wasn’t originally built to keep out Wildlings. They were just unlucky enough to be caught on that side when the Wall was built thousands of years ago to defend against the White Walkers, who are kind of like scary-as-hell evil ice mummies who could turn dead people and animals into evil ice zombies and the army of mummies/zombies went and killed everyone, Wildlings and civilized people alike, until they were driven back to their cold, wintery home and the Wall was built to keep them there. Winter is coming, it lasts whole generations, and the White Walkers are stirring once again.
The point is, there are greater threats out there—poverty, racism, violence, loneliness, war, inequity, oppression, homophobia, injustice, unaffordable childcare, hunger, illness, death, etc., the White Walkers of our nonfictional world—and we should be working together to defeat those things, not focusing so much of our time building and maintaining walls around ourselves and each other. Funders and nonprofits must communicate better and work in partnership more effectively.
How about we start by carpooling to the next trivioke night?
Collective Impact: Resistance is Futile
Site Visits: Uncomfortable, Yet Terrifying
The Most Crotch-Kickingly Craptastic Grant Application Notice Ever
Nonprofit Funding: Ordering a Cake and Restricting it Too
This morning, I woke up early and realized I was face-to-face with my son, Viet, who has been sleeping in the same bed with his mom and me. Looking at our sweet little baby, who was still sleeping peacefully, one tiny hand under his soft and rosy cheek, I was filled with warm fatherly thoughts. Namely: “When is this kid going to get a job and help pay for his keep?” I was tempted to wake him up and say, “You do realize that childcare for you each month is literally more than our mortgage, right? You better enjoy this while you can, little dude, because when you turn 18, you’re on your own.”
And that makes me think about the issue of sustainability of nonprofit programs. In every grant application, there is the “Sustainability Question,” which is basically, “How will you sustain this program or project when funding from the So-and-So Foundation runs out?” This seems absolutely reasonable at first glance, but honestly, it’s one of the most annoying questions we face. Most of us nonprofit professionals absolutely hate this question, and each time we see it, we have to leave our desk, go on a walk, maybe do some yoga or watch “The Daily Show,” then come back to our desk, take a deep breath, and write something like:
“We will continue to develop our staff and board’s ability to fundraise and diversify our revenues, including building relationship with other funders, as well as cultivating support from corporate sponsors and individual donors. Our special events continue to increase in revenues, and the board is leading the effort to explore earned income through program fees and the door-to-door sales of inspiring macaroni artwork made by the children in our extended-learning program.”
All of that is basically a euphemism for “We will leave you alone and bother other people.”
“Just once,” said my ED friend, Director Maureen, “here’s what I’d like to put in response to that question:”
- Program staff and the board will triple the amount of time they spend praying for money
- Program participants will be asked to pray for money to provide for their services as well
- 10% of general operating funds will be utilized to purchase Power Ball lottery tickets
- Fund development staff will regularly consult a reputable psychic to help track which direction foundations are trending to support
Why is this question so aggravating? Why does every time I answer it, I feel like crap? I sent out an email to my ED friends in the field, asking for their thoughts, and the responses were passionate and insightful. While the issue is complex and requires a lot more time to explore, I’ll try my best to summarize my colleagues’ thoughts. Overall, the Sustainability Question is annoying and frustrating because:
Sustainability is in large part determined by funders, not nonprofits. As much as we love individual donors, many of us still rely on grants, and grants are usually small and one-year in duration. We get a bunch of one-year grants that are Frankensteined together to support programs, each one with their own set of demands and restrictions, (which I explored here in “Nonprofit Funding: Ordering a Cake and Restricting it Too.”). As one ED puts it, “Why is fidelity to the mission so highly valued and expected of nonprofit leaders and staff but funders expect to ‘sleep around?‘ One year and you’re out. [They] don’t even come back and ask.” This lumbering, unwieldy, tenuous system is the antithesis of sustainability, so to ask how we nonprofits will maintain and grow our programs within it is kind of like setting a fire and asking how we will be putting it out.
Sustainability depends on the whole organization being strong, yet funders do not like providing general operating funds. Really great programs do not magically appear out of thin air. It takes real people, people who need, like, an office to work at and healthcare for their stress and carpal tunnel and stuff. These things are critical, and yet we have to constantly fight for them. “We will cultivate relationships with individual donors and corporate sponsors, etc.” sounds great, but that requires development staff, which is fundraising, and no one likes to fund “fundraising” and “admin” expenses, because those things are so frivolous and useless.
The nonprofit model is unique in that success at carrying out our missions leads to increasing costs, not revenues. The more successful programs are, the more clients they will serve, the more staff and other expenses will increase, without a proportionate increase in support. An example is VFA’s Saturday English School (SES) program, which provides English and Math support to recent-arrival immigrant and refugee students every Saturday for three hours. Five years ago, we had 30 students show up each session. Because of how awesome the program is, we now have over 150 students each session. This is a five-fold increase in number of students served. The expenses tripled, since more students means more snacks, more teaching staff, more curriculum material, etc. But funders are not going to triple the amount they provide; if we’re lucky, they’ll renew at the same level, and we’ll have to go search for other, newer funders to provide support. This is the Program Growth Paradox, where the more a program is successful and expands, the less sustainable it is.
Other reasons cited by my ED colleagues include “we know very, very well that not every program that literally changes people’s lives for the better can become self-sustaining” (but should be funded anyway, see “Nonprofit’s Ultimate Outcome: Bringing Unicorns Back to Our World“), “I have no clue where my future funds will come from so everything I say sounds like BS” and “after five or more friggin pages of explaining just HOW MUCH you need the bucks, you are now invited to totally reverse yourself” and “I will think about this and get back to you after I have several drinks to calm down.”
The most serious challenge with the Sustainability Question, however, is that it symptomatic of a divisive and patronizing system that perpetuates the unhealthy dichotomy of nonprofits as supplicants continually begging for spare change, and funders as benefactors. “How will YOU sustain this program? How will YOU sustain it after OUR funding that WE (might) give YOU runs out?” We now feel like the underemployed college-grad living in our parents’ basement, freeloading off of their good will, until they call us in for a serious talk about our future and demand to know what our plans are to find a job and inform us that it’s for our own good that in six months they will kick us out. We feel like Oliver Twist, who has to beg for another bowl of gruel from the…uh…that one guy, who serves…gruel…
OK, I haven’t read Oliver Twist.
The Sustainability Question is aggravating because the responsibility is overtly placed on nonprofits’ shoulders to fix problems in the world that we didn’t cause in the first place. Once the question is asked, “It immediately becomes somebody else’s problem,” writes one of my ED friends. It feels like funders are at the end of their ropes trying to “help” us nonprofits and if we fail to sustain our work, it is all our fault. This is not working for our field.
Every once in a while I meet a program officer who used to be a nonprofit staff. “Ah,” they sometimes reminisce, “I miss being on that side of the table.” And I would say, “Tell me what it’s like on your side of the table?” And we would talk, and I would learn that being on the other side of the table has its challenges, and that it’s not all completely awesome, with ergonomic chairs and dental AND vision insurance and with each person getting access to the company unicorn to ride to important meetings.
But that makes me think, Why the heck are we on opposite sides of the table in the first place? Aren’t we all trying to solve the same problems? Why is the relationship between funders and nonprofits so adversarial? It is ineffective. We should be on the same team, where the quarterback supports the…uh, linebacker so that he can make a, um, rim shot at the…fourth inning…
All right, I don’t know anything about sports. Point is, nonprofits and funders must be equal partners, with different but symbiotic roles, and sustainability of the work must be shouldered by both parties. We nonprofits think all the time about sustainability, even without being prompted, and we will continue to build strong programs and diversify our funding. Funders, as equal partners, should provide multi-year funds, general operating funds, capacity building assistance, and help connect us to other funders and partners. And come visit the programs once a while! We must work together to figure out how to sustain and advance the work. We have to, because the needs of and challenges facing our communities are only going to increase.
More on funder-fundee relationships: The Wall of Philanthropy, Wildlings, and White Walkers