The GuideStar Blog retired September 9, 2019. We invite you to visit its replacement, the Candid Blog. You’re also welcome to browse or search the GuideStar Blog archives. Onward!

GuideStar Blog

Restricted: A Sector Held Hostage to Good Intentions

 

The following is an excerpt from Grow, Spring-Summer 2011, by Anne Olin, CEO of The Olin Group. If you have a short article of relevance to the nonprofit community that you would like to post to the Trust Blog, please send an email with a summary of the article to trustblog@guidestar.org.

The relationship between funders and nonprofits is complicated, an intricate dance of due diligence and process, of practical and not-so-practical ideas, of appreciation and frustration. And while this relationship is fueled by a desire on both sides to advance a worthy mission, the conversation that leads to potential investment is often restricted by the best of intentions.

Ask a nonprofit leader what is most needed and the typical answer will be “core support to sustain daily operations.” But that’s not typically what they ask for.

Ask a community funder, looking for a way to make a difference for people in need, how it wants to provide support, and the usual answer will be “the most effective way that we can.”

And it is somewhere between these two powerful perspectives – the need for unrestricted core support and the desire to make the most effective impact – that the conversation stalls.

In response to this impasse, a funder may restrict the use of a gift to support the mission in the most direct way. Feeling trapped, the nonprofit may tailor its request to appeal to the funder’s perspective, focusing on dramatic, short-term results rather than essential infrastructure.

The result?

A grateful nonprofit with a donation it can’t use on critical priorities, and a funder who might have the sneaking suspicion that it wasn’t told the whole story.

If nonprofits want to attract the kind of core support that leads to longevity in the sector and systems change, they need to start engaging funders in this different conversation.

In a time of economic downturn and shifting politics, the danger is that the conversation between nonprofits and funders becomes too desperate or too vague. What is critical to this conversation is an open sharing of the struggles that nonprofit professionals face when trying to promote change inside of a business model that no longer matches the prevailing political economic. In this context, funders can be a resource and a partner in adapting nonprofit business models to the new economic reality, as many donors have run successful ventures themselves and are well-equipped to grapple with struggles common to any business.

The conversation also needs to include a more comprehensive discussion of the mission than typically exists. The mission is not limited to programs or direct services, but is linked all the way down to that broken server and up to that leaky roof. It’s connected to the ability of a business to attract quality staff and diversify revenue streams. It’s about processes and people, both those served and those who serve. Many funders cannot see passed programmatic expressions of a mission, and it is up to the nonprofit leader to make that case for core support.

This conversation can be painful in that it invites external scrutiny from those not always willing to support difficult change over time. And not every donor is going to be ready for this new, honest, nonprofit you. But it is this level of honesty that is the sector’s best chance at attracting investment in its collective organizational health, which is ultimately the way nonprofits will achieve their missions.

lindsay-nichols.jpgThe preceding is a guest post by Lindsay Nichols, Vice President of Marketing and Communications at America’s Charities, the leader in workplace giving and philanthropy. As a member of the organization’s senior leadership team, Lindsay guides and oversees the strategy and execution of all marketing and communications efforts with a major emphasis on strategy and tactics that support increased growth for the organization. Lindsay has been quoted in the New York Times, Wall Street Journal, Chronicle of Philanthropy, NonProfit Times, St. Louis Post-Dispatch, St. Louis Public Radio, Dallas Morning News, and more.

Topics: Charitable Giving