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Financing Not Fundraising: 5 Lies to Stop Telling Donors

By Nell Edgington



In part 11 of our ongoing blog series, Financing Not Fundraising, I’m talking about being brutally honest with your donors. If nonprofits are going to truly break free from the vicious fundraising cycle, they must find the courage to tell funders how it really is. And since board members are a nonprofit’s closest supporters and (I hope) donors, you need to stop telling them these lies as well.

If you are new to the Financing Not Fundraising blog series, the series is about how nonprofits must break out of the narrow view that traditional FUNDRAISING (individual donor appeals, events, foundation grants) will completely fund all of their activities.  Instead, they must create a broader, more strategic approach to securing the overall FINANCING necessary to create social change. You can read the entire series here.

If you want to learn more about how to apply the concepts of Financing Not Fundraising to your nonprofit, check out the Financing Not Fundraising On Demand Webinar Series

If you want to break free of the exhausting cycle of fundraising, a key step is to start being brutally honest with funders. Here are the top 5 lies you have to stop telling donors:

  1. X% of your donation goes to the program
    The distinction between “program expenses” and “overhead” is, at best, meaningless and, at worst, destructive. You cannot have a program without staff, technology, space, systems, evaluation, research and development. It is magical thinking to say that you can separate money spent on programs from money spent on the support of programs. Donors need to understand, and you need to explain to them, that “overhead” is not a dirty word. A nonprofit exists to deliver programs. And everything the organization does helps to make those programs better, stronger, bigger, more effective.

  2. We can do the same program with less money
    No you can’t. You know you can’t. You are already scraping by. Don’t accept a check from a donor who wants all the bells and whistles you explained in your pitch, but at a lower cost. Explain the true costs, including administrative costs, of getting results. Politely, but firmly, explain to them that an inferior investment will yield an inferior result. If they simply can’t afford the price tag, then encourage them to find fellow funders to co-invest with.

  3. We can start a new program that doesn’t fit with our mission or strategy
    Yes that big, fat check a donor is holding in front of you looks very appealing. But if it takes your organization in a different direction than your strategy or your core competencies require, accepting it is a huge mistake. Nonprofits must constantly ensure that money and mission are aligned. Otherwise the organization will be scattered in countless directions with an exhausted staff and confused donor base. Don’t let a donor take you down that road.

  4. We can grow without additional staff or other resources
    Nonprofit staff truly excel at working endless hours with very few resources. They have perfected the concept of doing more and more with less and less. But someday that road must end. Nonprofit leaders have to be honest with donors when their staff and resources are at capacity. Because eventually program results will suffer and the donor will receive little in return for their investment.

  5. 100% of our board is committed to our organization
    If that’s true, then you are a true minority in the nonprofit sector. Every nonprofit board I know has some dead  wood. Members who ignore fundraising duties, don’t contribute to meetings, miss meetings, take the organization on tangents are always present. It’s a fact that funders want to see every board member contributing. But instead of perpetuating the myth that 100% is an achievable reality, be honest with funders. Tell them that you continually analyze each individual board member’s contributions (financial, intellectual, time) and have a clear plan for addressing deficiency, including: coaching, peer pressure, training, asking for resignations. Getting to 100% is probably never realistic, it is far better to demonstrate that you are tirelessly working toward 90%.

Stop the madness. We need to stop telling funders what they want to hear and then cursing them behind their backs when they set  unrealistic expectations. Funders must be made to understand the harsh realities of the nonprofit sector if they are ever to be expected to help bring change.

If you want to learn more about applying the concepts of Financing Not Fundraising to your nonprofit, check out the Financing Not Fundraising On Demand Webinar Series, or download the Financing Not Fundraising E-books.

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About the Author: Nell Edgington is President of Social Velocity (www.socialvelocity.net), a management consulting firm leading nonprofits to greater social impact and financial sustainability. Social Velocity helps nonprofits grow their programs, bring more money in the door, and use resources more effectively. For more information, check out Social Velocity consulting services and clients.


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68 Comments to Financing Not Fundraising: 5 Lies to Stop Telling Donors

Sharon
October 13, 2011

Finally! A truly courageous blog. I have been honest with my donors for years, but I know I am in the minority, because some of my donors appear shocked when I explain the truth. I hope many more non profits accept this truth, because it’s only when the majority of us pull together that we will see real change.

Suzanne Drake Carle
October 13, 2011

Loved this article – thanx for breaking the myths held by soooo many nonprofits. Keep up the good work – please!

Glenn McGowan
October 13, 2011

Yes! Thank you for this. There are myriad nonprofits in our area that are conventionally funded, meaning that they are perpetually distracted by budgetary matters. And it’s hard to find much of a real impact they’ve had beyond the numbers they declare as outcomes.
We are committed to a developing a new funding schema that will reduce the stress on the organization and allow us to focus exclusively on our mission.

Nell Edgington
October 13, 2011

Sharon, Suzanne and Glenn,

Thanks for your comments. I’m glad this post resonated with you. And I’m very glad to hear that you all are doing your part to expose these myths as well. Keep it up!

David Edwards
October 13, 2011

Wonderful blog Neil. Even appreciated from here in Australia.

Our programs for cancer patients and carers are almost exclusively delivered by volunteers, so we have nowhere to hide on the request for financing. It does go to support the infrastructure (including personnel) required to build and develop a sustainable operation. It can be a very tough sell.

Linda L Moxam
October 14, 2011

Thank you so very much. This is a conversation that we often have in our world. Amen to transparency and truth. Well done!

Tracy Fredericks
October 14, 2011

Great message. I just sat in a workshop at the Social Venture Partnership Conference in Minneapolis, MN facilitated by Dan Pallotta the author of Uncharitable: How Restraints on nonprofits undermine their potential. Great concept!

Nell Edgington
October 14, 2011

David, Linda and Tracy,

I’m glad to hear you like the sentiment in the post. I absolutely agree: Amen to transparency and truth. It is a tough sell, but the more nonprofits that are open and honest about the realities they face, the more likely those realities are to change. So keep fighting the good fight!

Jennifer Potter
October 14, 2011

Thanks for the great article! I am new to the non profit sector and it is great to read such interesting and useful information!!

Nell Edgington
October 14, 2011

Jennifer, you are very welcome.

Kayla
October 14, 2011

This is very helpful to our new non profit. I will share it with the Board. Thanks

Nell Edgington
October 14, 2011

Great Kayla! I’m glad to hear it!

Belayneh Alehegn
October 14, 2011

Very valuable feeds!! Thanks well done!!

Nicole
October 14, 2011

Good posting, but as a nonprofit executive who has for years tried to educate donors, I would have prefered if the title was, “Five False Expectations Donors Have of Nonprofits”. The entire sector needs to do a better job getting blogs like this out to donors. It’s not just about what nonprofit staff tell donors, it’s also about the questions donors ask.

Nell Edgington
October 14, 2011

Nicole, I completely agree, the road goes both ways. And I wrote about what donors need to do differently a couple of weeks ago: http://www.socialvelocity.net/2011/10/we-should-expect-more-from-nonprofit-donors/

But let’s face it, nonprofit leaders have more at stake than donors do, so I think it’s up to nonprofits to start the conversation.

Nancy Dilworth
October 15, 2011

Great article. More people in the For-profit sector should read these. (But who has time these days.) There is the misconception in the genereal populace that non-profit’s don’t make money. It’s an unfortunate misnomer. Having come from the for-profit corporate world, and now working with NPOs, I find that so many are missing the fundamentals of sound business practices. Articles such as yours help to enlighten staff and board members.
Nancy Dilworth
Senior Consultant

Willy Gorumba
October 15, 2011

learn a lot. shall treasure and share this to co-worker. continue the good work.

Curtis K
October 16, 2011

Aloha !
the
Nice article ! A friend sent me a link to this and now I have to go back and read from teh beginning all of “ Financing Not Fundraising”

Fortunately after reading this it reaffirms to me that we are doing something right ! Our non profit, http://www.HawaiianHope.org is now 5 years old and has no government grants of any kind, and very little efforts are spent on fundraising. We are actually self funded from several revenue streams. (1) We design software, (2) We own a web hosting service, (3) We operate internet cafe’s. Our business plan as won awards.

Although we had a little hiccup about a year ago (you can fully blame city council) we are trying to get our footing re-established again and could use a chunk of money to make it happen, or the right person to help us into a new location.

I do like the line : “an inferior investment will yield an inferior result.”
We recently had someone offer us $1,400 and they had this huge laundry list of expectations. At our new location $1,400 barely covers the electric bill for a single month.

Looking forward to reading the rest of the series !

Fred Burkhardt
October 16, 2011

Well written, accurate and timely. Telling donors what they want to hear, just for the money, is a slippery slope.

Angela Perry
October 16, 2011

Thank you for this article it really helped me in my capacity as a Board member of several Not for Profits/Charities. Fund raising and sustainability is such a uge part of the day to day discussions and work.

Kelly Evans
October 17, 2011

Thank you for this article! I am so onboard with being real with funders and board members about what it takes to run our program! I had to inform my board that my staff can not be paid with inkind donations!

Nell Edgington
October 17, 2011

Good for you, Kelly. Keep telling the truth!

Marjorie Love, MSW
October 17, 2011

Thanks for this important message, well-said. My favorite is #2, we can do the same program with less money. In an era of shrinking federal & state funding for human services, it’s tempting to feel relieved at “flat funding”. Trying to make that work just leads to substandard services delivered (in the case of nursing homes, day care, etc) by front-line staff without a living wage or health insurance. Rather than enable the illusion that the nonprofit sector can miraculously make it work, there are times we need to say that WE CAN’T DO IT without appropriate funding … and let public funders and policy-makers deal with the consequences of their budget decisions.

Nell Edgington
October 17, 2011

Amen Marjorie! I love it!

Keith
October 17, 2011

GREAT article, we immediately put out a link to our board to energize a new movement in financing not fundraising.The start stop results you get with traditional fundraising is not sutainable and is unhealthy as it would be for any business.Let’s face it “non-profits” are as much a business as a “for profit” the only differance is the rewards (profits)are of of the social kind.

Nell Edgington
October 17, 2011

That’s great Keith! Let me know what your board thinks and if it spurs them to action!

[...] = {"data_track_clickback":true};There was an overwhelming reaction to my post last week, 5 Lies to Stop Telling Donors. I received more comments on that post than any other blog post in the 3 year history of the Social [...]

Victoria
October 18, 2011

Thank you very much for that wonderful message.
I have to share it with members of Jolly Children’s Centre

Cathy Sharp
October 18, 2011

I’ll add my kudos & gratitude for the 5 Lies, transparency and honesty, etc. This and the blog about financing not fundraising should also be shared with the “watchdog” entities (BBB, Guidestar, Charity Navigator–and dare I utter it: the “new” IRS 990?), who perpetuate the low-admin & overhead standard as a measure of a NPO’s effectiveness. They have made minor advancements recently toward changing their benchmarks for how much NPO’s spend on administration & overhead but it will take years and all of us in the NPO sector consistently and aggressively keeping the message of this post out front, to overcome the long-standing “myths” the watchdogs have ingrained in the public. Let’s keep it up!

Nell Edgington
October 18, 2011

Cathy, you make an excellent point. It isn’t just the donors we have to educate, but rating systems and other pieces of the nonprofit ecosystem. Thanks for bringing this up!

kadir ismail
October 18, 2011

The article is the realistic assessment of NGO problems.It is also fascinating to see the need for expungment of the distinction between program cost and overhead.The distinction has in fact generated cultural cleavage and the behavior characteristic of ambivalence among the members of change agent.

The replacement of fund raising with financing is quite welcome and also suggestion can be made that the funding agency should be the part of Programm implementation committee.

However a caution has to be sounded in financing; it will not make any difference with government program where the emphasis on quantity of achievement rather than quality of impact the intervention has made on the target group. A cultural variation in framing the strategy has to be accommodated in the scheme of things proposed.

Raymond OGIRIKI
October 19, 2011

Thanks so so much. Straight talk you got there. One issue i want to point out is that some donors don’t take you seriously when you say the truth. Now how can a new charity organization find her feet when some people don’t believe them? I developed a world class concept that will generate funds for the execution of charity projects without depending on donors. It will play a great role in the solution to the economic recession the world is passing through. It will change the world for good. I have requested for a few items (not money) that are required for take-off. As a matter of fact, we decided not to accept money from any interested person. Yet people don’t believe you. When you request for an opportunity to do detailed Presentation, all they nurse in their mind is how to takeover or hijack your idea.
How can one truly get donors to donate a few office equipments for us to start? Please help. @raymondogiriki

Sue Wildish
October 19, 2011

Great piece Nell. What resonated, especially, is the involvement (or not) of the board members. And what a huge difference that can make to an NGO. I also enjoyed your pointing out the ‘tangent’ person who is always in the room. I have noticed this happen with us a fair amount – and have wondered how to deal with it.

Another thing we deal with in S.A. – is inexperienced people running Corporate Social Investment departments in Corporates. Very often they have no experience in either the Charity/NGO sector or in running a business or fund. Holding them to promises, or an ongoing investment becomes tricky -as there tends to be a response to trend, rather than sustainability. So it feels like a first date every time.

Joanna Jones
October 19, 2011

I would like to put in my thanks also for your article, Nell. I fundraise for a plant conservation charity and have harped on for many years that funders need to be more aware of the REAL costs involved with running a charity.

Robin Strachan
October 19, 2011

Nell, this was incredibly well-timed. For years, gift officers and grant writers have struggled with percentages, couching things in as positive a light as possible to avoid having this type of discussion. In my experience, when we are honest, we gain credibility with the donor, and the relationship grows exponentially. Donors are becoming suspicious of many non-profits–and for good reason. Getting at the truth helps them know that we, as professionals, want them to have the truth, the whole truth, and nothing but the truth. Cheers.

Vicki McNamara
October 19, 2011

X% of your donation goes to the program-this is not a lie for the Warren County United Way, Inc. We have an endowment that pays all of the administrative costs. We are positive we can say that 100% of your donation goes towards our agencies and their programs.

Barbara Saunders
October 19, 2011

Vicki, it’s great that your organization has an endowment. At the same time, it concerns me that sector members in that position perpetuate the essential untruth at the root of that standard: the notion that programs can exist without somebody paying for infrastructure. It’s like scolding a renter for “not budgeting well enough to buy a home” when your home was inherited from your grandparents.

Tim Wade
October 19, 2011

1000% correct but there is a “race to the bottom” issue – your advice really only kicks in if a critical mass of NGOs start “training” their donors correctly.

How do we move this message into the mainstream of philanthropy in the US?

Nell Edgington
October 19, 2011

Tim, I think, like with any change, it starts with a few people who convince more and more people that there is a better way. If a few nonprofit leaders start a honest conversation with donors, maybe those few donors will start asking better questions of their other grantees and of their fellow donors. At some point it has to reach a tipping point. I say we continue the conversation and continue pushing for more honesty.

Lithaca
October 19, 2011

I think the important part of the equation is foundations appreciating this honesty. Because when nonprofits try to be honest they might not raise enough money. Case in point, nonprofit I work for filled out an assessment form with a grant-writing agency. What did they tell us? “Pictures need to depict the “need” we are trying to address (sad and heart-wrenching) rather than exclusively happy ones. ” Seems that if you want to get money from funders these days you have to sacrifice your principles! After all, no one really cares what aid recipients think about how they are portrayed in the West, right?

Another interesting post on the same issue that I really liked is “Can aid agencies afford to be honest?” from AlertNews that can be found here: http://www.trust.org/alertnet/blogs/alertnet-news-blog/can-aid-agencies-afford-to-be-honest/

So, can (particularly start-up) nonprofits afford to be honest?

bountiful
October 21, 2011

Fantastic Nell,

A lot of NGO fund raisers can’t face this truth because of the fear of loosing a sponsorship opportunity. Indeed this article open my eyes and increased my courage

Kris
October 25, 2011

Nell,
Thanks for this. I had been trying to get the Founder and Board of a non-profit I used to work with to look more at showing how administrative costs etc. can move the project forward and deliver services earlier in lieu of no or low percentage administrative costs and taking longer to implement the project. I wasn’t very successful and I’m always appreciative of seeing your type of message out there. I do understand that it’s an uphill battle because donors have been so conditioned to just look at a % but it won’t change if we continue to feed into it.

Jim Norvell
October 25, 2011

The general thrust of the article is spot on, but to infer that overhead is irrelevant is naive. Donors who care about this are looking for reassurance that money is not being wasted on inappropriate salary levels and inefficiencies (fundraising or otherwise). Good business practices get rewarded.
It’s a good thing to have a board that sees things from different perspectives. A board that doesn’t question procedure, process and production is worse than useless, it’s dangerous.

Nell Edgington
October 25, 2011

Jim,
No one wants to see waste or inefficiencies in the nonprofit sector, but to think that a meaningless figure like percent of overhead can reveal whether a nonprofit is being inefficient or not is not realistic. Nonprofits should be evaluated on whether or not they create change, i.e. whether they meet their mission. If they have to spend money on good salaries to recruit top talent and other aspects of infrastructure in order to create that change then so be it.

Jim Norvell
October 25, 2011

Nell:
There is a limit. Even those of us who have been in the business for a lifetime have been taken in by organizations that spend far too much on “overhead” to get a small fraction to a cause. One could very credibly argue that these organizations are in the business of creating jobs for their employees (probably top employees) and consultants rather than philanthropy. At different times during the life cycle of an organization the “percentage of overhead” can vary widely. To make a blanket excuse for management ineptitude or even fraud, is to invite long-term donor resentment, however — not just for the offending organization, but all nonprofits. It’s lost resources for those that are working responsibly.
The real important principle is the way you define overhead. R&D and any expenses that directly support the “program” staff should certainly not be considered overhead. But, if you’ve been in business for over 10 years and are still spending in excess of 25% (I would prefer far less) on fundraising, you probably need a new strategy. If your execs are getting salaries that are near or exceed those of private sector execs with similar responsibilities, then administrative salary structures probably need a careful examination.
Out of context, blanket use of overhead % is meaningless, unless you know the underlying costs relative to the industry segment.
I like the overall thrust of your theses, I just believe you overstated your first point.

Nell Edgington
October 25, 2011

Jim,

I absolutely agree with you that there is excess, incompetence and, at times, corruption in the sector, just as there is at times in any sector. However, you cannot measure a nonprofit simply on the basis of the percent they spend on overhead. If, in your example, there is an organization that is spending only a “fraction” of their revenue on a cause, but they are really moving the needle on that cause would we say that we shouldn’t give to them? Isn’t the much more important measure their ability to create change? That is what nonprofits should be judged on, not how they spend money.

Jim Norvell
October 25, 2011

Nell:
Perhaps it’s my business, consulting background that tells me that there is a much greater opportunity to “move the needle” if you are known for using scarce resources, such as donated money, well. I love the idealism but it is an extremely small slice of the donor population that is happy to to have a very small percentage of their money actually “move the needle” — which I interpret as making lives better. They always have opportunities to direct their money to organizations that move the same needle farther.
I believe that nonprofits are just another kind of business and, yes, they should be judged on how they spend money. I would hate to be the fundraiser who has to make the case that my organization spends $90 to get $10 of value. That kind of spending is for seed funders in start-up organizations. The truest believer would find that a hard concept to sustain. I have raised a lot of money over the past 40+ years and have yet to meet the philanthropist who would tolerate such inefficiency over time — most would not tolerate it at all.

Nell Edgington
October 25, 2011

Jim,
My point is that you cannot define inefficiency by how much money a nonprofit spends on “overhead” because “overhead” is a meaningless concept. Who is to say which expenses constitute “overhead” for any particular nonprofit? And who is to say what percent of overhead is right for any particular nonprofit? Certainly not the donor who sits on the outside of an organization. Therefore, what I am suggesting, and many are moving forward like Charity Navigator, is that nonprofits start to be judged on more meaningful metrics, like their ability to achieve results. Because at the end of the day money is just a means to an end. What nonprofit leaders and donors should really care about is whether results are being achieved.

Jim Norvell
October 25, 2011

Nell:
At some point someone defines the terms (effectiveness) and someone chooses the metrics to measure them. These things are subjective.
I concede that overhead is nebulous. I maintain that waste, fraud, incompetence and inefficiency (negative overhead)are not.
No business would exist if it did not have management and board oversight to create metrics (or maybe just judgment) to determine the extent to which each exists, if at all. Positive overhead is all of the support elements that enable the charitable purpose. If a nonprofit spends on lavish offices or pays exorbitant salaries or spends an inordinate and unproductive amount on public relations/advertising or wasteful fundraising methods, these are all positive overhead expenses that can be better managed to allow more resources to go to the core objective.
My definition of overhead is any cost that can be cut without diminishing the mission.
Every business, nonprofits included, have something that most managers call overhead. Managers in the profit-making sector care about profit. Managers in the nonprofit sector care about societal benefit. Each strives to reduce whatever they define as overhead to create more of the result they seek.
Even if only used internally, the concept of overhead (defined in some consistent and particular way)is important basis for management cost control.
I would maintain that accountants (which I am not) could give you a fair definition/measurement of overhead that would be relatively uniform over different types of organizations.
I understand your fear that donors may judge performance too harshly by relying solely on an ill-defined (or perhaps undefined) determination of overhead. But, I have seen too many nonprofits use this kind of argument to excuse poor management. I have never seen a nonprofit fail to succeed if it exercises cost-conscious management.

[...] Financing Not Fundraising: 5 Lies to Stop Telling Donors Nonprofit consulting firm helping nonprofits understand and embrace social innovation, grow their programs and achieve financial sustainability. Source: http://www.socialvelocity.net [...]

Dwayne
October 26, 2011

Great article! This information is very important for non-profits. Nothing hurts a non-profit more than lies being disclosed especially in the area of finances. A huge problem in Brazil where I work.

Nell Edgington
October 26, 2011

Jim, I think the problem in the nonprofit sector is not one of a lack of cost-consciousness. In fact I would argue that the vast majority of nonprofit leaders are overly cost conscious, spending an inordinate amount of time trying to squeeze every last resource dry, often at the expense of being able to do more social good. In order to stop that madness, we need to move away from a preoccupation with distinguishing, to use your terms, “positive” costs from “negative” ones. Rather, let’s start to evaluate nonprofits on whether or not they are achieving the social benefit they set out to achieve. If they are in fact achieving that impact, and we can compare how cost-effectively they achieve that impact vs. how cost-effectively other nonprofits achieve impact isn’t that the end goal? Percent of overhead is a meaningless concept because it is only half of the equation. What we are ultimately interested in is how cost effectively they can achieve impact. And I think you and I can both agree on that.

Jim Norvell
October 26, 2011

Nell:
Social consciousness is not good at any price. Do-gooders who are making some difference but at a tremendous price taint those who are using resources far more effectively. They make donors wary.
I think we will just have to agree on your last four points and somewhat disagree on the first.
Thank you, though, for the stimulating conversation.
Keep up the good work.

Nell Edgington
October 26, 2011

Jim, thank you as well for your thoughtful comments and interest in having a debate about this issue. It is open, honest conversations like this that are going to help create a stronger, healthier, more effective nonprofit sector.

Thomas
October 26, 2011

Nell, I am a reform advocate in the animal shelter industry. Historically, private shelters have gone to great lengths to hide their performance. Most have relied on “corporate spin” either through marketing statements or the president’s typical song and dance routine on annual reports.

The focus on transparency in the the non-profit sector has made it almost mandatory that any reputable facility post their 990 form on CharityNavigator or Guidestar (or both).

The problem I see – and that aligns with your philosophy – is that tends to give outsiders a false sense of security. For example, most typical private shelters have a fully-burdened labor cost that runs between 70-80% of revenue. Yet almost every one of the organizations report “administrative expenses” at around 6%. That means 94% of revenue goes to programming. That’s ludicrous to anyone who thinks about the meaning of those numbers.

The problem I see in this is that in this industry, at least, we are now just getting to a point where NPOs feel any obligation at all to post these tax forms in the public domain. We are a long way from showing what each org is doing in reality as these forms are only accounting forms and easily hide the real operational truth.

The shelter industry is atypical in some aspects because it comes from a time when they were all governmemnt run “pounds.” They were much maligned as the garbage can for failed employees, the last stop on the way out of town for failed careers. In response the private side of the shelter industry has spent decades puffing up itself to overcome this stigma and now has gone to the “dark side!” Stodgy, bloated organizations with overpaid management teams make it almost impossible for them to change directions. They’ve become ponderous in size and cost with dismal effectiveness. Train engines (like shelters) don’t come with steering wheels for a reason!

The challenge to implement your philosophy in this industry is daunting. I look forward to learning more and trying my hand at starting the ball rolling…

Nell Edgington
October 26, 2011

Thomas, I agree, change like the kind we are talking about is enormous. There is a tremendous amount of baggage in the nonprofit and philanthropy sectors, as there is in the government sector. But we have to start somewhere. To your point about rating agencies, Charity Navigator has made somewhat of a step forward recently by starting to include some impact and transparency measures in their ratings of nonprofits, as opposed to just financial measures. That’s a start. But we also need to start at the ground up and on an individual basis. The more we talk about what needs to change and start making a few steps in that direction, every one of us, the sooner we can get to a nonprofit sector that is stronger, more transparent and better able to achieve change.

Michelle
October 27, 2011

Thanks for the sound and ethical advice!

Kevin Gray
November 2, 2011

GREAT ARTICLE!!!!!It seems unrealistic to donors today that a real non-profit has to, in some shape form or fashion, have little to no administrative cost to run the foundation properly. I was over joyed to read the comments. As was mentioned, it so hard to keep up with all the excellent reading material thats out there today, but keep it coming. Now let’s all stick together and really make a difference. w2wbcf.org

J.
November 3, 2011

Some of us in the aid sector are writing about this, too…

http://talesfromethehood.com/2011/08/29/aid-marketing-id-love-to-see/

Nell Edgington
November 3, 2011

J, that was a really powerful post. Thanks so much for sharing. We all need to be much more open and honest about the realities we are dealing with.

[...] #1: “How much goes to the cause? How high are their expenses?” As I’ve written before, the distinction between program (or “cause”) and administrative expenses is meaningless at best, and destructive at worst. If a nonprofit organization is creating change, then everything they do [...]

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[...] Nonprofit leaders have to stop telling funders what they want to hear. Here are the 5 top lies nonprofits have to stop telling their donors.  [...]

[...] funders lack enough on-the-ground experience to recognize and address nonprofit challenges. This lack of honest, open conversation holds the sector back from producing effective funding partnerships and prevents grantors and [...]

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