…if one can change television channels or locate a movie with hand gestures, we ought to be able to figure out how to match the communication channels that motivated a philanthropic gift with the giving channel used by the donor to make the gift. Or, if a software program can be designed to help little children write and publish their own books, we ought to be able to figure out how to send a thank you letter immediately after receiving a gift.
Phil is right. If we can do such cool and innovative work in the commercial world, certainly we should be able to get the basics (like timely thank you receipting) right in the nonprofit sector. Right?
Unfortunately, we consistently find that isn’t the case. I think the problem quite possibly comes down to one word…
Every innovation Phil listed required time, research, testing, marketing and capital (both human and financial) to bring to market. Some took years, and potentially millions of dollars to get off the ground. As a society, we praise companies that are doing innovative things to change the world for the better. Apple. Facebook. Twitter. Companies like this invest significantly and have wonderful (and widely used and lauded) products and services to show for it.
But what it took for all of these companies, and everything Phil listed in his post to become reality is capacity — something that very often, nonprofits are told they don’t have the luxury of building.
After all, this is the very thing that our society doesn’t seem to want nonprofits to focus on. They get squeezed from every direction. Congress lovest to investigate nonprofit finances. Watchdog organizations rank nonprofits by how much or how little they spend on administrative and fundraising expenses. Donors (both individual and corporate) scrutinize organizations’ 990’s before making a giving decision. And the media loves stories about nonprofit financial scandals — those sell ad time like crazy!
Nonprofits are told things like:
- Be more efficient with what you already have.
- We only fund program, not operating costs, and certainly not fundraising costs.
- You’re paying your staff too much. Don’t you know this is a nonprofit?
- It’s imperative that you reduce your fundraising costs. 25% is way too high.
- You’ve really got to spend more on programs and less on infrastructure and capacity building – donors don’t want to fund that stuff.
None of these is inherently bad. In fact, I can agree with many of them (within reason). We all want to see nonprofits doing the most good in this world. Using donated resources in the most efficient and effective manner to create real change in this world is in everyone’s best interest.
But it is incredibly naive to think that any organization (tax-exempt or not) can do real, lasting good on this planet without having the capacity to try new things, staff appropriately (and pay appropriately), take calculated risks that could lead to major breakthroughs, and have the financial reserves to withstand fluctuations in the economy.
Unfortunately, the trend these days is to tell nonprofit leaders we want them to do exactly the opposite. By our actions (what we will and won’t fund, watchdog rating mechanisms and congressional hearings) we are telling nonprofits to focus on the immediacy of their particular issue (whether that’s the environment, animal welfare, poverty, etc.), and not to focus on building long-term, sustainable solutions to our most pressing problems.
Can you imagine if the shareholders (i.e. donors) at Apple had told the board similar things about the way Steve Jobs ran the company? He made too much money. Cut his compensation. Spend less money on research and development – can’t you find volunteers to help out with that stuff? Your marketing budget is way too big — cut that in half. I’m sure we can find someone to give us those services as an in-kind contribution.
We’d be without many of the products and technologies that right now are fueling economic growth around the globe. And thousands of people might be out of work because Apple was too focused on short-term goals.
This would be a bad thing, right?
Then why is the exact same approach to capacity building the accepted norm for the nonprofit sector?
We’re tying the hands of the very people who have the vision and the ability to do great things like cure cancer, eradicate disease, provide sustainable clean water and lift millions of people out of poverty and despair.
Instead of celebrating them as they build the organizational capacity and infrastructure to create long-term systemic change in the world, we demand that they do more with less because they’re a nonprofit.
Until we fix this mindset I don’t see many nonprofits being able to accomplish their Next Big Thing.
Am I wrong? Please share your thoughts!