Nonprofit Myths...Part 2 (Money Issues)

Nonprofit Myth #2: Donor and/or grant funding shouldn't support salaries, or overhead for organizational operations. See also: Low overhead and/or administrative costs are a sign of a healthy nonprofit organization. See also (also): Nonprofit organizations shouldn’t spend money/resources to engage in fundraising activities.

I would really like to exist in the mythical land where we don’t have to PAY PEOPLE to DO IMPORTANT WORK. Truly, this particular myth gets under my skin so much. See my post on how change sector work is valid, professional, and highly skilled work. I do not understand how funders, donors and supporters of nonprofit organizations expect that things will get accomplished if not by dedicated, talented, resourceful, professional staff with specialized skill sets—who need and deserve to be compensated fairly for their time and expertise.

Paying living wages and offering benefit programs to nonprofit employees to, you know, actually DO the work of the organization, ensuring that the mission is carried out is one issue. Supporting the costs of doing business (i.e. overhead, administrative costs, management & fundraising costs) is a closely related issue. It feels like we’re in broken record territory within the nonprofit sector—there’s nobody I’ve encountered who doesn’t see the logic of reducing restrictions on funding to better allow organizations to meet their missions. There’s also now a chorus of voices arguing for unrestricted and general operating funding in the sector, see some great information from: Grantmakers for Effective Organizations, Propel Nonprofits, The Overhead Myth and Nonproft AF. The pursuit of low overhead costs is harmful and destructive, because it undermines an organization’s ability to provide stable, quality services to beneficiaries and feeds into the Nonprofit Starvation Cycle. Overhead isn’t a measure of nonprofit effectiveness, it’s one financial measure—of inputs. There’s no correlation between how much an organization pays for rent, utilities, fundraiser’s salaries, executive pay, etc. and the impact it has on it’s community.

So, the solution? Provide unrestricted monetary support (donations and grants) for organizations. Encourage nonprofit organizations pay living wages to personnel to carry out their missions. Find ways of measuring impact and effectiveness that are unrelated to an overhead ratio. Support spending on necessary overhead, including costs to fundraise.

Next time…Part 3 of Nonprofit Myths!

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Grant Professionals are matchmakers

Grant professionals occupy an interesting place in the nonprofit ecosystem. In an ideal world, the grant professional in any organization is responsible for the full spectrum of activities involved in a complete grant lifecycle, which range from deeply understanding the work and programs of the organization; identifying and researching prospective funding sources; developing relationships with funders; preparing, submitting and monitoring grant proposals; managing compliance for existing grants; maintaining grant records; collaborating with colleagues on organization and program development, fundraising, and other institution-wide activities; and much more.

 The grant professional in any organization should be a go-between, understanding their own organization and translating its’ needs to match those of prospective funding sources, ensuring that the mission, vision, and goals of the funder are met through investments of general and program support of their organization. The grant professional needs to thoroughly understand their organization’s mission and programs, opportunities for expansion and innovation, plus the ‘wish list’ of needs for future program and organizational development. Likewise, the grant professional needs to research, understand, and filter potential funding prospects with a similar focus. Grant professionals are constantly seeking the perfect match between their organizations and the current and prospective funders that are eager to effect change in the world through their investments.

Grant matchmaking requires several things to be most effective: the time and ability to thoroughly research prospective funders, commitment to extensively understanding your organization’s services and programs, the ability to effectively communicate internally with colleagues from various disciplines to obtain the information you need, the ability to communicate externally with current & prospective funders to tell effective stories and convey critical information, the discipline to synthesize a large volume of information, the ability to manage confidential information with discretion, a high level of sophistication in communication (in all forms), willingness and ability to build relationships with funders over time, and the skills of strategic planning, critical analysis, tactful communication, and high-volume multitasking.

Grant writing and management is a skilled, professional craft. An ability to write well is a prerequisite for becoming a grant professional, but it is only one component of the role. All of the areas of responsibility for grants professionals require a commitment of time and significant expertise to be done well. A specialized, skilled grants professional is a vitally important team member, one that many organizations mistakenly conflate with general resource development work or one of many duties assigned to an ED, top leader, or volunteer. Grants work is time- and effort-intensive, and producing high-quality, competitive grant applications and growing relationships with grant funders demands investment by organizations.

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