Why I’m tired of the non-profit scene

I wasn’t going to post this.  Just thinking about it makes me tired.

It used to get me all riled up and put me in an argumentative mood.  But these days, I just sigh.

Senator Mark Montigny wants to reign in excessive salaries in the not for profit sector.  If you read the article here http://tinyurl.com/7fnj47f, you would agree that some salaries are perhaps a bit excessive.

However, the glib comment about salaries that are into the six figures needs a response.

Are we talking about a small, 3-person operation that serves soup to homeless people?  Or are we talking about a major university renowned for its research?

The problem with making a blanket statement for all non-profits is it doesn’t take into consideration the qualifications necessary for executing the work of some non-profits.  But there are those who believe that non-profits, across the board, should have artificially low salaries, even though they’re usually doing more noble work (and with far fewer resources) than their counterparts in the for-profit sector.

How about the person overseeing Harvard’s endowment of $27,557,404,000?  Do I really want someone who could be had for, oh . . say, my salary to shoulder this responsibility?  Or do I want the best possible candidate I can find?  What if the going rate for the person with the best qualifications can earn $300,000 in the for-profit sector, but will settle for $200,000 because he or she is a Harvard grad and believes in the instution?

If we’re going to determine the price of people’s labour in the non-profit sector, maybe we should also mandate other prices too.  Xerox charges $1,000 for the machine it just sold to Big Company.  Shouldn’t it be forced to sell that same machine for $500 to a non-profit?  (In truth, many corporations do offer huge discounts and gifts-in-kind to non-profits.  But should they be forced to?)

I suppose there are a million things wrong with that analogy.  I’m typing this while I’m tired.  I’m tired because the non-profit sector is severely misunderstood by those who have little experience with it.

There are even people who insist that non-profits shouldn’t pay anyone.  Non-profits should work solely with volunteers.  Sure!  And I should get a unicorn for my birthday.

That would be fantastic if all the right volunteers with all the right qualifications lined up to give their time to the causes of their choice.  But they don’t.

If we did it the way these people from some other reality insist we should, non-profits would be mismanaged, donations would shrink, services would shrink, and either the taxpayer would have to pick up the slack, or whatever ill consequences that could occur due to a shortage of programs would have to occur.  Losing a symphony or a dance troupe would be a bummer.  Losing children to hunger would worse.

And while I’m at it, why are we even considering holding the non-profit sector up to disproportionately high levels of scrutiny while Wall Street business people have been allowed to rape the population with impunity?  Just asking.

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The State of the Sector survey results and my commentary

Nonprofits in the USA are being stretched, perhaps beyond their limits.  The Nonprofit Finance Fund released its State of the Sector survey results.  An overview of the findings (from http://nonprofitfinancefund.org/state-of-the-sector-surveys):

  • 85% of nonprofits experienced an increase in the demand for services in 2011.
  • This is on top of years of increased demand: previous NFF surveys found that 77% of      nonprofits experienced an increase in demand in 2010; 71% experienced an increase in 2009; and 73% experienced an increase in 2008.
  • 88% expect an increase in demand for services in 2012.
  • 57% have 3 months or less cash-on-hand.
  • 87% said their financial outlook won’t get any better in 2012.

I propose that this is not a matter confined to the realm of nonprofits.  This is a matter of concern to all of us, even those who haven’t donated a single penny anywhere and have no interest in volunteering.

This is a message to any of you who happen to fit into that above category, although it’s doubtful that you’d be reading this blog if you did.  Nevertheless, this needs to be said.

You’re going to have to pay for it somewhere.

If we don’t support the nonprofit organizations who are trying to smooth out those nasty rough edges like hunger, poverty, disease, etc. we’ll either have to fund bandaid solutions through our taxes, or tolerate living in a society of crime, hatred, and needless premature death.

Wow.  I’ve gone all dark.

But surely I’m not the only one who puzzles over the multitudes who simply don’t get it.  Where is the logic in thinking that a “blame the victim” mentality makes the problems go away?  Why do some of us think that as long as the problem belongs to “them,” “we” don’t have a problem?  Why do we see nonprofits as “nice to haves” rather than essential for the greater good?  Few people seem to like the alternatives – higher taxes or an even messier world.

And why do we hold the nonprofit sector, whose mission is to make the world a better place, more accountable than we’ve been holding the banking industry, whose mission is to make shareholders richer?  I’m not suggesting that the nonprofit sector not be held accountable.  But if we’re going to hold it up to intense scrutiny with demands of transparency and accountability, perhaps we should be prepared to fund the sector as lavishly as we’ve been funding the banking industry.

Granted, one might argue that there are simply too many nonprofits out there.  The National Center for Charitable Statistics estimates that there are over 1.5 million not-for-profit organizations in the U.S.  The law of supply and demand might indicate that duplication of services exist, the public doesn’t perceive a need for some non-profits, and that they are “voting” simply by not supporting them.  One might argue that the “lesser needed” non-profits should probably close up shop.  Fewer non-profits means each non-profit gets a greater share of the philanthropic pie.

While these might be valid arguments, the pervasiveness of the across-the-board struggle among the sector indicates something more systemic.  Not only does a broad swath of public misunderstand the non-profit sector and underestimate its necessity, but because of the economic downturn, people are focused on their own survival and lack any resources of time or money to spare.

The Fast Company has offered some advice for the nonprofit sector and its funders:

1. Funders must invest in organizational vitality and effectiveness.

2. Boards must take their roles seriously in advancing nonprofits.

The recommendations are offered in detail at http://www.fastcompany.com/1826938/nonprofit-finance-fund-state-of-the-sector-2012-a-system-under-pressure.  The article is well worth a read.