We nonprofits deal with unique challenges that our for-profit colleagues never have to think about. If you ever sat in the dark for hours listening to REM and eating Otter Pops and wondering what it would like for a large for-profit like Apple to have to run like a nonprofit, wonder no more! I’ve done it for you this week! (What, like your vacation is so much more interesting). And I asked NAF’s web designer and artist, Stacy Nguyen, to draw up some comics.
At the retail store
Customer: Hi, I’d like to buy this latest iPhone. How much is it?
Apple employee: $700 dollars.
Customer: Here you go. But I want most of this money to be spent on direct costs. No more than $70 should be going to indirect costs like rent, insurance, etc. I also don’t want any of this $700 to go toward advertisement or staff salaries.
Apple employee: We’ll designate these restrictions in our systems.
Customer: At the end of the year, I’d like a report on what you spent this money on.
Apple employee: We provide quarterly financial reports, and would be glad—
Customer: No no no. I don’t want the financial reports on your entire company. I only want a report on what my $700 specifically was spent on. Only my $700.
Hi everyone, before we start on today’s post, a couple of announcements. First my org is hiring a Development Director and an Operations Associate. (Make sure you like unicorns and Oxford commas). Also, you can now buy a t-shirt, mug, or notebook that says “I am a pita wedge for the hummus of justice.” And, finally, I’m on Instagram (@nonprofitwithballs), mainly taking pictures of stuff I find pretty while doing nonprofit work. Like this event wagon, and this gala centerpiece, and this 9-year-old keyboard
In this political climate, when so many of us nonprofits are rallying to put out one fire after another, many of the things we have been used to and have been putting up with no longer make sense. Many of us in the sector have been making the argument against restricted funding and for general operating for years. Here’s a report from GEO. Here’s one from CEP. Here’s a piece from my colleague Paul Shoemaker. And I’ve made impassioned pleas here, here, and here. But despite countless arguments by dozens of leaders, we still have foundations who restrict funds, who set arbitrary numbers for “indirect expenses” and “overhead.”
I know you are extremely busy. I mean, you are technically a nonprofit, and this is December after all. My colleagues are wrapped up in licking thousands of envelopes, handwriting tons of thank-you notes, organizing a gazillion events for the community, and consuming leftover holiday party wine and chips. (Stop judging us, Santa. Like your lunch is always so balanced). Since they are occupied with year-end tasks, I asked my colleagues what they wanted from you, and I’m synthesizing their responses, to save you some time. I am writing a letter to you on behalf of all of us in the nonprofit sector.
Santa, this has been a horrible year. First-episode-of-Black-Mirror horrible. Superman-IV:-Quest-for-Peace horrible. And many of us are not exactly looking forward to next year either. It’s OK. All of us are rolling up our Ross-Dress-for-Less sleeves and are determined to fight for a just and inclusive society.
The Walking Dead is back on TV. After last season’s finale, and this season’s opener, I am not sure I will continue watching. But zombies do make me think of funding dynamics, so that’s why I am bringing it up. In The Walking Dead, the zombies are scary, but they are the least dangerous. Zombies eat brains; they don’t have brains; they don’t have hidden motives and plans; you know exactly what a zombie will do. It’s the humans who are terrifying. Pushed into survival mode, they calculate, lie, betray, and refuse to use the Oxford Comma (#OxfordCommaForever). No one trusts anyone, and it’s more often than not that groups of humans end up killing one another before a zombie actually gets to munch on anyone’s flesh.
What does this have to do with funding dynamics? Well, there seems to be a pervasive lack of starting with trust between funders and nonprofits, and it’s affecting all of us and our abilities to survive and do our work. The default starting relationship between funders and nonprofits is one of suspicion of the latter by the former, which leads to funders enacting policies and practices designed to make nonprofits more “accountable,” such as restricted funding, individualized applications, bespoke budget forms, customized reports, and other things that drive us nonprofits nuts. This in turns leads to nonprofits’ hiding of information, especially about challenges, from funders, which in turn reinforces the suspicion. All this perpetuates a depressing cycle of waste of time and energy and lots of complaining, usually at bars, and all that could have been used to deliver programs and services. Continue reading “Trust-based grantmaking: What it is, and why it’s critical to our sector”
During a drink with one of my favorite program officers, I brought up some feedback about how onerous their grant reporting process was. Even though the foundation is really flexible on how the funds can be used, they still ask for exactly how much of each line item the foundation pays for. And their line items don’t line up with ours, so we have to spend significant time translating our budget into theirs. And once the report is submitted, it affects what we report to other foundations, leading to a funding Sudoku that wastes endless hours of my and my team’s time.