Nonprofits/Community Building a better region together, one story at a time

The Best Gifts Don't Come With Lots of Strings Attached

Technology and increased scrutiny on nonprofits have encouraged people to insist their donations can’t go toward administrative needs. ‘But good nonprofits must have a strong administrative backbone to support the mission-driven activities they offer.

One of my guilty pleasures on Sundays is reading the Modern Love column in The New York Times. It’s in the same section that has the wedding announcements. A while back I read a piece called “Swearing off the modern man.” It was written by a college student who dated a man who wasn’t connected to Twitter, Instagram or Facebook. She described how, unlike her other relationships that were chronicled online in a constant stream of witty posts and photos, it was deliciously old-fashioned because it was private.

Commentary - in-story logoThat night I woke up at 2:30 a.m. thinking about how her story had a lot of parallels to modern philanthropy.

What struck me was how, in the rush to embrace technology (which always seems so seductive) or technology’s proxy (the next new thing), it’s easy to lose sight of strategies that have served us well for decades.

Older forms of formal philanthropy, and here I’m talking about philanthropy during the past century, involved donors of all types making grants or gifts to nonprofit causes because they believed in the work that was being carried out or needed to be done. In the case of larger gifts, that often meant a donor trusted the leader of an organization.

Their thinking was something like this: Joe Schmo’s been working in the trenches a long time. He’s smart and passionate about this issue and certainly knows more about it than I do. I want to support his organization because I trust him and believe they do good work.

Today, that rarely happens.

Instead, in our desire to “do good,” we go online to research what nonprofits we should contribute to and land on websites of charity rating agencies that instruct us to penalize organizations that they determine spend too much on administration. That leaves us second-guessing organizations we thought did good work and suddenly wagging fingers at them.

So what do we do? We confine our giving to the basics, restricting our gifts for specific purposes to prevent the organization from using any of our money for admin.

Imagine if your boss said, “I’ll let you use your paycheck for clothes, food, rent and gas but don’t you dare spend a penny on anything else.” That, in essence, is what many of us do when we give to nonprofits. We restrict the ability of organizations to spend our money in a way that will best serve their mission.

Many of us are riding the wave of “donor-controlled philanthropy,” where donors of all types – big and small – want to determine exactly how their money will be spent before giving it away. The thinking goes that our money should be dedicated for specific programs that help real people or make real things happen, and not for superfluous things like administrative or overhead expenses.

The problem is that many people don’t stop to think about how nonprofits operate. It’s really quite simple: Just like every other organization on the planet, good nonprofits must have a strong administrative backbone to support the mission-driven activities they offer. That means they need money for things like computer hardware and software, staff to handle human resources and accounting, for organizational and strategic planning, and so on.

According to GuideStar, a renowned institution that collects and disseminates information on every nonprofit registered with the IRS, “it is relatively rare to find an organization that over-invests in administrative expenses.”

The second thing that’s important to know about nonprofit work is this: Serving people isn’t exactly like serving burgers. Success isn’t necessarily measured by the number of people assisted but by the results achieved from the service provided (and, yes, evaluation is considered to be an administrative cost).

Evaluation is tricky. For example, if 200 kids participate in a gang prevention program, does that mean it’s a success? If a veteran’s service organization finds more homeless vets on the street this year than last, does that mean it was unsuccessful? If a theater doesn’t sell out a show, does that mean the play or performance was bad? If researchers dedicate years to finding a cure for a disease do we consider their efforts to be futile or do they hold promise?

The types of issues and problems that nonprofit organizations tackle are complex by their very nature. And although there have been some recent isolated attempts to profit from or commodify these activities (see philanthrocapitalism), for the most part, nonprofit work is difficult and unglamorous.

So during this season of gift-giving, let’s treat our contributions to nonprofits like real gifts. Let’s celebrate and appreciate the work that so many women and men do in our community and beyond to make the world a better place by believing in them and supporting them generously.

Pat Libby, a management consultant to nonprofits and philanthropies, leads Pat Libby Consulting. She was previously founding director of the Institute for Nonprofit Education and Research at the University of San Diego. This commentary has been edited for style and clarity. See anything in there we should fact check? Tell us what to check out here.

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