I know we are all very busy, but it’s important to take the time to read some of the really good research and commentary that’s out there. Organizations and individuals are putting out useful information and perspectives that can help us in our daily work, in our interactions with funders and donors, and in thinking strategically about our organizations.
Last week I read an amazing article in the Standford Social Innovation Review, “The Nonprofit Starvation Cycle.” I cannot recommend this enough, and it goes right to the heart of a critical issue nonprofits are facing today. Written by Ann Gregory and Don Howard from Bridgespan, it lays out the details of the vicious cycle that’s leaving nonprofits of all sizes starved for critical operating funds. This ongoing cycle of deprivation erodes organizations’ ability to function as well as to accomplish their mission. To break it down, here are the three components of this cycle:
- Nonprofits neglect infrastructure and misrepresent data (about expenditures)
- Funders have unrealistic expectations (regarding what it costs to run a nonprofit)
- Nonprofits feel pressure to conform (to the funders’ paradigm)
It is a chronic problem, and it is resulting in poorly performing organizations, burnt out staff and frustrated donors. It is also resulting in beneficiaries’ not getting the services that they deserve and need.
The solution lies equally with both nonprofits as well as with the funders. Nonprofits need to be courageous and tell their donors and funders what it really takes to accomplish their mission effectively. Nonprofits also need to resist the urge to “hide” fundraising and other administrative expenses. Funders, for their part, need to increase their interaction with their grantees. They need to work more closely with these organizations and increase their understanding of the real-life challenges (and expenses) of running an effective nonprofit. Funders need to challenge their old assumptions. Both funders and organizations need to collaborate more closely if the cycle is ever to be broken.
Check this article out. Use it to start a lively discussion at your next board meeting or staff meeting. Ask your donors how they evaluate these issues. Learn from this conversation.
It’s time to stop starving.