The nonprofit sector is a funny world when you consider the following:
I’m sure there is much more you could add to this list. It seems that nonprofit organizations are often caught between a rock and a hard place, especially when it comes to money. The general consensus seems to be that nonprofits don’t make money, and that employees of nonprofits don’t make money (yes, there are actual people in my life who have said this to me). Well, news flash – I have almost exclusively worked for nonprofits for about 10 years and somewhere in there I managed a backpacking trip around Europe and a move to Colorado. It is possible for a nonprofit to make a decent profit. And in fact, if they are making a decent profit, it most likely means they are doing something right and that their mission can be reached on an even larger scale.
Now, when it comes to money, there are restrictions that should be followed, such as a certain percentage of revenue must go directly back into the mission, or a certain percentage of revenue can be put toward salaries. This, however, leads me to a HUGE restriction that often comes up with funding in the nonprofit world – when people (or organizations) give their money, they may give it with the restriction that it goes directly toward the program. Not to salaries. Not to administrative costs. Not to anything to do with overhead. I always wonder, when people make this restriction, do they realize that it takes staff (who are paid) to run the programs that you want your money to go to. It takes administrative costs (printing, marketing, phone calls, community outreach) to recruit participants to said program. Now, one could make a case for these administrative costs, but in general money labeled as restricted is meant to go toward participation fees, materials used during the program by participants, etc. The reality is, there is so much more that goes into a program at a nonprofit organization then just showing up the day of. I wonder how much more successful NPOs would be if more funding were labeled as “unrestricted.”
Some other food for thought is in the article “We Need to Stop Treating Nonprofits the Way we Treat Poor People”. This article provides a different perspective on the way people perceive nonprofits. It’s an underlying belief that I’m not quite sure how it came into existence in the first place. And if nothing else, try out this excerpt from the article:
“The punishment of success. Ironically, while we expect poor people to work and save up money so they can stop being dependent, we punish them when they succeed at that, removing their benefits if they earn close to an amount where they may actually be able to no longer need the benefits. It’s weirdly paradoxical, demotivating, and insulting. In nonprofits, many funders expect sustainability and yet punish nonprofits for having a strong reserve, which is probably the most important factor for sustainability. You need to be sustainable, but if you are too successful at that, we’re not funding you, or we take away the money we gave you. I remember frantically trying to spend some left-over money because it otherwise would have had to be returned, per the requirement of this funder, even though the reason we had leftover was because we were spending it wisely; that money we saved would have greatly helped our programs if we had been allowed to put it into reserve.”
This blog contains anything and everything nonprofit, grants, youth development, outdoor education, and more. Really, this is just an informal way to chat more about what I love! Enjoy :)