Why funders need to rethink the concept of nonprofit resilience

[Image description: a small green/yellow/grey lizard with a long tail, sunning on what looks like a piece of wood. Background is obscured but could be a desert. Image by Azoreskid14 on Pixabay]

Hi everyone. Quick reminder: On August 30th at 11am Pacific Time, there is a FREE webinar on legislative reforms on Donor-Advised Funds. Get more details and register here. There will be live captioning.

Also, this week I’ll be speaking virtually at the Nonprofit Marketing Summit, which is free for everyone. My lecture, called “Burn It All Down: Achieving Radical Impact in Nonprofit and Philanthropy” will be on Thursday August 24 at 11am Pacific Time. Get details and register here. There will be auto-captions. And I might have a sexy, smokey voice from weeks of chronic coughing.

After doing this work a while, I realize there are a few words and phrases in our sector that absolute raise my hackles and cause me to go immediately into fight or fight mode (yes, I said “fight” twice). These words and phrases include “overhead,” “logic model,” “sustainability,” “donor love,” “strategic philanthropy,” “nonprofits should act more like for-profits,” and “can I give you some friendly feedback about your personal appearance on that virtual keynote?”

But the one that causes me to want to dramatically flip over a silent auction table and scatter all the items on the floor is “resilient.” Especially when funders use it in talking about nonprofits.

During the Before Times, I received a phone call from a consultant. “Vu,” they said, “I was hired by the XYZ foundation to do some research and write a report with recommendations on how funders can support nonprofits to be more resilient, and your name came up as someone I should talk to.”

“Resilient?” I asked, sitting on the steps outside my office building, because our office was too small to accommodate everyone.

“Yes, how nonprofits can weather different challenges, especially the lack of funding, funders’ changing priorities, the unpredictable economy, etc.”

I’m glad it was a phone call and not a video call, because my eyes rolled so hard that I’m pretty sure I lost consciousness for several seconds. “Please tell funders the best way for them to build nonprofit resilience is to give nonprofits lots of money. Lots of unrestricted money. For a long period of time. And to stop spending resources on pointless research on topics where everyone already knows the answer.”

Ten years and an ongoing pandemic later, and I’m frustrated to see this conversation still exists in the same way in our sector. We need to talk about it. I want us all, but especially funders, to stop using this framework altogether, because while it seems noble, it’s destructive to our sector, in multiple ways:

First, the idea of resilience entrenches people in accepting inequitable systems instead of challenging them: There are lots of articles about the problematic nature of “resilience” when it is applied to people and communities who are most affected by systemic injustice. “Children are resilient,” we often say when kids go through traumatizing stuff, which allows us a measure of comfort, but this often makes us complacent about changing the systems and conditions that force kids to have to be resilient in the first place.

The same goes for nonprofits. Often when funders talk about ensuring their nonprofit partners are strong and resilient during challenging times, they’re not focused on fixing the systems that make nonprofit work necessary in the first place. Or the systems of unpredictable, subsistence funding that keeps most nonprofit at a level of basic survival that sparks these conversations around resilience.

Second, it continues to place the onus on nonprofits to fund their programs and services: “Resilience” and “sustainability” are two scoops of the same hummus. Both are grounded on this belief that nonprofits are responsible for ensuring their own survival, and funders’ financial support through grants is out of the goodness of funders’ hearts, something extraneous that nonprofits should be thankful for, but never rely on.

The “resilience” and “sustainability” framework perpetuates the idea that nonprofits are freeloaders “dependent” on funders and donors. The problem with this is, of course nonprofits are by their nature dependent on funders and donors! As long as there’s inequity and nonprofits need to exist to address it, they will be dependent. Stop thinking this is a bad thing, when it’s just how things are. Nonprofits’ jobs should be to run programs and services that are needed by the community, and funders’ jobs should be to fund these nonprofits for as long as they are effective.

Third, it stifles imagination and encourages an incremental approach to the work: When we focus on things like organizational sustainability and resilience, for both nonprofits and foundations, there is a risk that we’ve accepted that inequity and injustice are ultimately unsolvable. Foundations that are deeply attached to the idea of giving out a small amount of their endowment each year so they can exist in perpetuity have lost their imagination. They don’t think we can solve problems in the present, so they must save for the future. This is a self-reinforcing prophecy.

The same goes for nonprofits and movements. If we haven’t lost our imagination, we should not be so focused on long-term sustainability or resilience. We should be focused on effectively addressing issues…and then going out of business. That means any resilience-aligned thinking should be toward a short-term existence, ensuring nonprofits and movements are strong enough to effectively to do the work for while they’re needed, with the goal of them sunsetting immediately after.

Fourth, it absolves funders of the need to critically examine the part they play in nonprofit instability: The question the consultant asked me was hilarious, now that I think about it: “How do we funders help nonprofits weather challenges caused by us funders?” The hell?! It reminds me of the one time a funder on a panel called out nonprofits for constantly competing with one another other instead of collaborating; meanwhile that foundation had a highly competitive granting process.

Sure, there are more challenges than the ones caused by funders themselves, such as the economy, inflation, nonprofits having ineffective boards and leaders, a pandemic, etc. But many of the challenges experienced by nonprofits are caused by funders. The lack of funding comes from many funders’ refusal to grant beyond five percent of their endowments each year. The instability of funding comes from many funders’ propensity to fund only one or two years at a time, and their constant shifting of priorities, one year focusing on the environment, another year focused on early learning, etc.

Finally, it’s just super annoying. There are few entities more “resilient” than nonprofits. They have to be, considering what they have to deal with every day. Imagine any for-profit having to deal with a fraction of what nonprofits endure daily: “Here’s $12.78 for my sandwich. I need to know exactly how you will spend that money. And I don’t want more than 10%, or $1.28, to go into paying your workers who made me the sandwich. And I’m not coming back to buy another sandwich; wouldn’t want you to become dependent!”

So to be asked “how can we make nonprofits more resilient” is insulting. It’s similar to thinking poor people have terrible financial management skills, so a solution would be to have them attend financial literacy trainings. People who don’t have a lot of money and systems of support, I know a bit from experience, are experts at financial management, because their very survival depends on knowing to the penny how much they have and how to make it last. Financial literacy trainings can be helpful, but many are just insulting and divert from systemic inequity like terrible minimum wage laws and exponentially rising costs of housing and other expenses.

For these and other reasons, funders need to stop thinking of nonprofit resilience in the way they’ve been thinking about it. Nonprofits are tired of having to be resilient all the time, of having to adapt and pivot and be creative and survive and endure. We’re exhausted. At some point, we just want to have sufficient resources so we can be effective at solving entrenched societal issues.

And there is no magic formula around that. It’s not workshops or white papers or consultants or mentorship or executive coaching or whatever. These resources can be helpful, but if funders want nonprofits that are doing vital work to be “resilient,” give money. Lots of unrestricted money. Over many years.  And just as importantly, stop contributing to the conditions that force nonprofits to have to be resilient in the first place.

Please donate to support the people and communities affected by the wildfires in Maui. Here’s a great list of organizations to donate to, as well as other ways to help.