Does Your Nonprofit Think Too Small?

I’m going to guess “yes.”

I’m sure some will hate me for saying this, but after 30+ years in the nonprofit trenches and another 10+ as a coach and consultant, I’m still amazed at how small many of us think.

In 2008 during the big recession, and 2020 during the pandemic, all I heard was cut, cut, cut.  No one wanted to talk about how to grow, grow, grow so that more (not less) needs could be met.  Yes, some efficiencies were created.  But did they result in sustainable organizations?

Not so much. Too many organizations are just limping along.

What puzzles me is how much the nonprofit sector is itself to blame. 

In “Why Our Definition of Nonprofits Restricts Problem Solving,” I suggest six ways nonprofits limit their growth and, even worse, their ability to repair the world in all the ways they set out to do so when they first were founded.

Deep down we all know you must spend money to make money.

We expect it of the for-profit sector.  Yet somehow, when we cross the threshold of our social benefit organizations, all our common sense seems to leave our heads. We pat ourselves on the backs for being self-sacrificing (“overworked and underpaid” is a common refrain I’ve heard through the years, often spoken with a deal of pride yet an underlying, gnawing sense of outrage and/or lack of self-worth).

Maybe when we begin to value what we do more, then so will the rest of society.  

9 Things about Nonprofit Fundraising That Puzzle Me

1. Why do we persist in thinking money is the root of all evil? 

Why do we tell ourselves nonprofits are about mission and values and doing good deeds; whereas for-profits are about greed and sales.  In both cases, it’s about accomplishments.  That’s where the value lies.  Money is merely a symbol of what can be done with it; an enabler. As a result of this misplaced focus on money, the social benefit sector is hugely undervalued and hugely under-enabled.  Puzzling.

2. Why do we ignore the fact fundraising is a huge profit center? 

It has a remarkable ROI.  I’m not talking about a social ROI (though it has this as well) but a financial ROI.  I’ve often thought that businesses who had the return on investment that nonprofits have would be turning cartwheels.  But when folks see on Charity Navigator that your cost of fundraising or overhead is more than 20%, they go nuts. Puzzling.

3. Why are we so impatient with organizations trying to achieve monumental change? 

Why won’t we let them invest the resources needed to build an infrastructure suitable to sustain change? Why do we think “overhead” is the root of all evil?  We don’t want to pay for it; just for “services.”  Huh?  People give services.  Shouldn’t they get a salary (aka “overhead”)? Puzzling.

4. Why do we focus on overhead rather than outcomes? 

As long as we’re making a difference, responding to a demonstrated need and creating social value, does the overhead number really matter? Inferior investments lead to inferior results. Why would we rather see a charity spend $10 to bake cookies that sell for $100, allowing them to buy five new library books (10% cost of fundraising) rather than spending $300,000 to create $1 million worth of social value (30% cost, but yielding a much greater outcome)? Puzzling.

5. Why do we demand self-sacrifice from nonprofit employees? 

What’s with the hair shirt mentality?  It doesn’t say much about the value we place on nonprofit work.  We don’t demand self-sacrifice from airline pilots or neuro-surgeons because we want them to take good care of us! Don’t we want nonprofit professionals to take good care of our communities and our planet? The notion folks are supposed to be so rewarded by nonprofit work that money should not be important denies the reality these workers have expenses, families to support and as much a right as anyone else to earn a living for their good work. Puzzling.

6. Why do we not reward our “ordinary heroes”? 

We hugely reward our sports heroes and celebrities.  We don’t seem to complain when top athletes make more than $100 million salary, or when actors make a million dollars or more for a one-minute commercial.  Yet let a nonprofit worker begin to make more than $100K and suddenly we’re aghast at how “unethical” this is.  We don’t want to pay for nonprofit salaries, for goodness sakes! Puzzling.

7. Why do we condone a double-standard in exec salaries?

For-profits can give out million-dollar golden parachutes just to get failed executives out the door, yet nonprofits who have the good sense to reward a successful E.D. with a salary that retains them are roundly castigated.  Why do we keep telling nonprofits to “be more business-like;” then not prepare to offer the types of salaries that will attract and retain effective business leaders? Why are more nonprofits at least putting in place equitable systems of incentives, bonuses and deferred payments to make salaries competitive relative to the larger market? Puzzling.

8. Why is the lion’s share of social benefit investing going on outside of the sector? 

This question is at the heart of Jason Saul’s books, Social Innovation, Inc., and both leading to the conclusion there are plenty of investors out there interested in social innovation and change.  Yet they aren’t doing so through existing nonprofit channels.  They’re starting their own social businesses.  At the same time, philanthropic giving as a % of GDP has been flat at 2% for an extremely long time. Last year was even worse. Puzzling.

9. Why would we accept the idea that raising less money for beneficial purposes could be ethical?

Inherent in the framework of community-centric fundraising is the notion of equitable vs. inequitable fundraising. While making space for nonprofit leaders of color, and some white allies, some so-called “traditional” donors are excluded to the point where they take their money elsewhere. As noble as the utopian vision of a model, diverse, equitable and inclusive world — where nonprofits are no longer necessary — may sound at first blush, is it really ethical to generate fewer resources where problems are pressing? Can society really be reformed through how we do fundraising?

Closing Thoughts

It’s going to take a culture shift to move the needle and solve today’s big problems.

This means working together, rather than dividing, siloing, shaming and finger pointing.

It means reframing how we approach social benefit and social justice work, and coming from a place of love, not money. Philanthropy, not fundraising.

Are you up for the challenge?

One More Thing

Tips, tools, templates, exercises, worksheets and checklists galore!

Working strategically means taking some time to develop the necessary mindset, and supporting infrastructure, to assure you’re on the path to success.

• Do you have clarity on what you hope to accomplish?
• Are there pre-conditions to success that are not in place?
• Are key players and stakeholders on the same page?
• Do you show donor-investors what’s in it for them to affiliate with you?
• What value do you offer?
• And why is it better than what anyone else is offering?

These questions and more are addressed in The 7 Clairification Keys To Unlock Your Nonprofit’s Fundraising Potential. Through a series of clairifying worksheets and individual and group exercises, this 42-page guide will give you fresh insights so you can truly think strategically about your plan to achieve desired outcomes. Stop mindlessly editing or tweaking last year’s plan, and dig deep into why you’re doing these things. Clairify your (1) values; (2) stories; (3) brand; (4) social channels; (5) support constituencies; (6) engagement objectives, and (7) resources and systems.

All Clairification products come with a no-questions-asked 30-day 100% refund guarantee. If you’re not happy, I’m not happy.