A friend recently announced that he had given a relatively large amount of money for a crisis relief cause and that he was so pleased that “100% was going directly to help those in need”. My friend was taken back when I said that I was surprised that he didn’t mind that the money might be poorly used, misused, or even stolen. “What in the world to you mean” he shot back. I explained my belief that many are under the misconception that non profit organizations don’t need any overhead and in fact can effectively run on a very tight shoe-string. I responded “So you’d be satisfied if your generosity is entrusted to someone with minimal or no skills, oversight, or resources for deployment and accounting”. That stopped him pretty cold.
Paul Light, in his book Pathways to Nonprofit Excellence, describes three forces pressing increased accountability on the sector. First is the cry to be “more businesslike” in our day-to-day operations. If nonprofits would just adopt business practices, the theory goes, all would be well. Kicking it up a notch, others call for the adoption of Standards as an indicator that nonprofit organizations meet some level of common practice and a proxy for accountability. Regulation and new legislation is the final solution when “someone” deems that nonprofits cannot regulate themselves.
I’m certainly a fan of accountability and, in fact, it is one of the strongest values of the Community Foundation. Donor’s have a right to demand accountability for their contribution of time, talent and treasures. But let’s face facts, most nonprofit organizations are doing a pretty good job with minimal resources. One cannot deny that a small number of nonprofit organizations and foundations have done some not so ethical things, but they are a very small minority. Along with accountability I’m also a fan of “reasonable and rational”. Accountability must be commensurate with the size and scope of the organization. And those contributing to nonprofit organizations must realize that there is a cost for accountability – a cost of time and money. I can also argue the shortcomings of Standards, Regulations and certainly the call to be more businesslike as panaceas for accountability, but perhaps in a future article.
I also understand that donors want their contributions to “make a difference” but I think what we sometimes miss is what it takes to insure quality of service. I’ve seen organizations that I believe to have inflated budgets, but I also believe that over time we’ve all been lulled into much lower standards for nonprofit agencies. Its true that most people working in non-profit organizations are less motivated by money than by mission, and usually settle for salaries far less than they would make in the for profit world. I think that has led to a false belief that non-profit work is less demanding or has less value than work in the private sector. I consider the name itself to be demeaning - non profit - how many other sectors are defined by what they are “not”.
The bottom line is that I think we are in dilemma that we have created. For so many years we have pushed to keep nonprofit overhead at a minimum, pushed to use volunteers instead of paid staff, settled for antiquated computers and technology, and settled for “less than businesslike” practices as Board members. I believe the time has come to demand more, but also pay for more. It is also going to require significant change for nonprofit Boards and staff, because there isn’t enough funding or contributions to build every nonprofit organization to the required capacity. Formal collaboration, shared back-offices and consolidation will be a mandate if we are to maximize quality services and accountability. That level of change will require a paradigm shift for everyone.
