Advocating for unrestricted funding

By way of background, I have worked with many non-profits as an employee, a consultant, and a volunteer. I’ve attended multiple webinars and conferences and read countless books and articles related to the industry. I say this because it has turned me into a staunch advocate for the wonderful world of non-profit management. Folks…it ain’t easy. While I know every industry has its challenges, I find that the non-profit world is filled with passionate, hard-working, underpaid, unfathomably dedicated people. It’s also an industry under absurd levels of scrutiny.  Dear Reader, I beg you to give these folks a break and give them the financial support and emotional encouragement they so desperately need to help them further their mission.

I’ve often said that I would love to walk up to a clothing store counter with my pair of jeans and declare that I only want to pay for the portion of those jeans that matters to me. I can claim that I wasn’t inspired to purchase by any tv ads, so please take that part of the expense out of it. None of the salespeople in the store helped me with my purchase, so please remove that portion of payroll from these jeans. I didn’t buy a shirt or a dress, so kindly take out whatever expense that entails. It’s my money, so I just want to pay for the fabric and embellishments and the cost of the few folks involved with the production of my jeans. And while we’re at it, please provide the salaries of each of those employees along with all of the costs related to the facility where my jeans were produced. I’ll decide if those costs are appropriate even though I have never worked in the clothing industry.

Is that example over the top? Not particularly. If you don’t believe me – write a grant request.

We apply unreasonable levels of scrutiny to non-profits and many of those who make high level decisions about funding have little to no experience managing a non-profit organization. That’s ok, because the industry needs the funding and we can’t expect everyone to have that in-depth knowledge. However, I think it’s reasonable to expect that everyone making funding decisions take an educated approach to those decisions and come to grips with the fact that these organizations desperately need just one thing – unrestricted funding.

It’s common and certainly understandable that donors want their contributions used wisely. Add to that our shared desire to know that our donations really make a difference; that the money makes a notable impact on an issue or helps a struggling population. This is all natural and frankly, admirable. But it also creates a problem. It forces non-profits to create and define programs that are “sexy” to donors and funders but also contain enough operating expenses and personnel costs to keep the place running. Because the rest of the expenses are decidedly “unsexy.” After all, who wants to pay for: non-programmatic salaries, insurance, audits, technology, rent, equipment, cleaning, shelving, or tires for the company van? Yet, can you imagine: a food pantry without a functioning refrigerator, a homeless shelter without snow removal, a suicide hotline without a highly functioning phone system, or an animal shelter without insurance to cover their volunteers?

Also bear in mind that these are organizations with budgets often hundreds of thousands of dollars and into the millions. I think we can all agree that a financial manager is critical, and audits are very good practice, even when they are not required for smaller organizations. Funders want to see strong fiscal management and often require or at least strongly recommend an audit in order to apply. Yet, it is unusual that they will agree to subsidize any of the cost of it. Unrestricted funding is critical.

To use another example, imagine a recent college graduate just starting out in a new job and a new city. Relatives give this grad money, presumably to just help get her started and typically, with no strings attached. That grad can use the gift for pretty much anything – security deposit, down payment on a car, furniture, work clothing, food, kitchen supplies, bath mats, or maybe even to stock up on entertaining supplies. Is it fair to place restrictions on that gift? To decide that kitchen supplies are ok but food is not? Or to suggest that this person doesn’t need a car because she can use public transportation? I’d like to suggest that we wouldn’t put restrictions on a gift to our family, so let’s not do the same to the food pantry down the street.

Providing unrestricted funding does more than give a non-profit the ability to cover the aforementioned “unsexy” expenses. It also allows that organization to react quickly to a crisis. If the water heater goes, they don’t have to create a GoFundMe to cover the cost. If a client has an emergency need for car repair to get to work and keep their job, the funds are available without begging on FaceBook. If there is an unexpected opportunity to move into a better facility, they can take advantage of that without a capital campaign. Not only can the non-profit leader move quickly, but they can cover the cost without using precious staff time to find funding for it.

I believe that the root of the problem is trust issues. Over time, there have been some egregious actions from some very high-profile non-profit organizations. That has led to many funders and individual donors questioning the industry and very often, rightly so. The good news is that these actions have given us watchdog organizations like Guidestar and Charity Navigator, among others. With these watchdog organizations comes a lot of really great information on individual non-profits and the industry as a whole. I encourage everyone to use these resources to self-educate about where to invest your charitable dollars.

If you honestly don’t care to take that kind of time, then feel free to make an emotional decision. If you like the organization, the mission, the leadership, and you feel that they are making an impact, then make an investment. I only ask that you make that investment generously and that you allow the organization to use it as they see fit.