The Folly of Our Funding

Imagine you’re a fat-cat moneybags…go ahead, it’s fun. Ok, got the picture…good, here’s the exercise:

You have a choice to make with your dough, and there are two businesses in which you can invest;

Business 1 is a well run, dynamic business that generates significant annual returns. They invest in their staff, and insure that everyone has access to healthcare. There is childcare available. They offer managers the opportunity to continue their educations, so they can grow with the company. They invest in R&D, so that their products don’t get stale. Their marketing moves the product and has generated significant public goodwill towards the product they sell, as well as for the company itself. They play a vital role in their community, and the executive sits on numerous Boards while senior staff and even front line employees are regularly out in the community, lending a hand and working with others to help the community grow stronger.

Business 2 is an anemic company that has never shown a profit. Their leadership is weak. There is high turnover, and little effort to bring front line folks into the management track. Their product is old, and it’s clear that consumers are looking for something better, but there is no effort to evolve. Managers are seldom seen in the community, and if they are, they are complaining, not lending a hand to make it better.

Which one would you invest in?

Well…if this was BUSINESS, I can damn well assure you that Business 1 would walk away with a new investor, and that, after a year or so, that fat-cat, upon seeing a handsome return on his/her investment would probably put more money into the business.

But….if this is the NONPROFIT world, then Business 2 would get the grant. Why, you ask…let me tell you. Because in nonprofit land, everything is done the exact opposite of the way you’d think would work. It’s like George Costanzaland?!?!?!?!??!

In the nonprofit world, small is good. Grassroots is best. Look too big, no matter how much your effort might return on an investment, and your dead.

But don’t get TOO little…if you get caught in that never-never land in between, where local funders think you’re TOOO big, and national funders think you’re TOOO small, being JUUUUSSSTTT right means going broke.

And, whatever you do…don’t look good in public. Too much media, and you’re a whore. To much public success, and everyone thinks that everyone else is giving you money, and you end up broke.

In the nonprofit world…old programs are sacred. Imagine folks in your community fighting to keep that old incinerator going—you know, the one that pumps soot and grime into the air by the ton and whose owners don’t seem to care. In the nonprofit world, we need to keep those old programs going, because it would be a crying shame to acknowledge that times have changed….even if we need a new, energy efficient, environmentally sound model. Heck…in the nonprofit world, we just split the resources and money and then BOTH the old and the new are struggling and weak. But, it sure beats having to make a tough decision!!!!

In the nonprofit world, imagine trumps impact. Don’t even try to sell a solution—hint, hint…the money’s in talking about the problem!!!

OK, OK….you’ve got my point. Why am I making it…because we’re going broke.

No…we’re not going under. No…we won’t close. But our struggles are real, and they are mirrored ALL over this country by thousands of other programs who are doing everything right, but who live in a funding climate which, to put it bluntly is ineffective and illogical.

This country is spending close to 1/10 of it’s gross national product on nonprofits. That’s close to 1 trillion dollars annually.

And until we have a serious discussion about merit, measurements and momentum…well, you better get use to both the smog from that incinerator that we won’t close, as well as dozens of direct mail funding appeals from the new energy efficient model that we won’t fully fund.