Ask Why
Recently, a number of nonprofit organizations in Pierce County have closed their doors or are tabling programs due to lack of funds, and I don’t believe we’ve seen the worst of it yet. I wonder how the other nonprofits in our community will weather this financial storm. When for-profit organizations can’t make a profit, how will not-for-profits survive? Spending less, living within your means and finding creative ways to make ends meet are necessary for individuals and organizations alike; however, it is sometimes harder to translate what this looks like on the organizational level when spending less means the loss of jobs, and living within your means translates as not taking risks in innovation with your programming.
I would suggest the third option, finding creative ways to make ends meet, presents us with an enormous opportunity to discuss strategic mergers and innovative solutions to long term problems. As Buckminster Fuller, one of my favorite inspirations, said, “You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.” Fuller was a man who asked ‘why’ at every turn and created new ways to approach old ideas. He consistently found that his most controversial ideas were actually feasible and inspired. As we confront the most pressing challenges in Tacoma it occurs to me that we will get nowhere by fighting to maintain the status quo. We need to consider how to build new models that will take us to new levels of service.
Inherent in philanthropy is a desire for right design: being thoughtful and strategic, creating something that pushes boundaries and acts in concert with what is emerging. Paramount to this approach is recognizing that each challenge is connected to all the others, and therefore, the solutions often lie in the connections. Look at the systems around you and ask ‘why’. Why do some people shop at grocery stores and some people shop at food banks? Why is that the kids who need education the most are the ones getting suspended? Why does the minimum wage not cover the costs of owning a home? Be curious. These times call for the courage to question the systems we live in and create a vision for a better future.
Filed under: KCB, General
7 comments
P phil b. October 13, 2008
L’Arche at 120th & Vickery in Summit-Waller might be a good example of this ‘3rd Option’. A sustainable & intentional community built on dignity, justice, & charity, & not charity alone.
Habitat for Humanity & the Heifer Project are 2 others, which come to mind.
O onbroadway October 13, 2008
Thanks, Phil – I wasn’t aware of two out of those three. Isn’t MultiCare not-for-profit? Somehow I think they’ll find ways to make ends meet.
M Melanie October 14, 2008
Sometimes non-profit and not-for-profit are used interchangeably. Here’s an explanation of both: Non-Profit or charitable organizations raise funds to perform some charitable act or mission. A non-profit organization is a legally constituted organization whose objective is to support or engage in activities of public or private interest without any commercial or monetary profit. Examples are the American Red Cross or the United Way.
Not-for-profit or fraternal organizations are a group of people that form an organization for fellowship. Examples would be Credit Unions and the American Legion.
S Squid October 14, 2008
A key “creative way to make ends meet” that many non-profits fail to fully capitalize on is their ability to generate earned income through sales, especially if those sales are related in some intrinsic way to their mission. For example, one could argue that theater groups have a responsibility to maximize ticket sales. Schools need to max out enrollment and consider pushing student/teacher ratios. Social service organizations would do well to copy operations like Goodwill that generate significant income from retail stores.
The old paradigm of constantly going to the philanthropic community (and the same old resources there at that) simply won’t work anymore. Non-profit status does not mean you can’t run in a most business-like fashion.
I’d also argue for a significant overhaul of IRS classifications of charitable status. My proposal is basically (and simply) to create two classes of non-profit organizations. The vast majority of them would continue as is, with donors able to take a tax deduction for their contributions. A small number of non-profits providing essential human services serving the poor and most destitute would be placed in a special category and donors these would be granted a tax CREDIT for say their first $1500 in contributions. This would strongly encourage people to be sure they were giving at least a modest amount to the truly needy, without impacting gifts to symphonies, alma maters, big hospitals, etc. all of whom have untapped ability to generate earned income.
My $.02 on that issue.
J J. Cote October 17, 2008
Very well put, all. Squid, your $.02 is invaluable.
My problem with the current system lies in the fact that some “non’profits” are far from it. Both Multicare and Franciscan claim non-profit yet I’ve seen them drive patients without resources or insurance to the point of bankruptcy in an attempt to collect a bill. Compassionate Care is Non-Existent in this town when it comes to health care. Can anyone find out what their top six officers make a year and the raises that they get in relation to collections?
S Squid October 17, 2008
I don’t know about top 6, but your among your highest paid charitable CEO’s in Tacoma would be the head of the Boys and Girls Club, making over a cool quarter mil a year.
A Andy Buelow October 23, 2008
In response to Squid: I have been working in the nonprofit sector for 20 years and have yet to work for one that was not seeking to maximize its earned revenue. However, in the majority of cases, a nonprofit organization needing regular philanthropic support does not mean that it is not being run in a business-like manner, as your post implies. Although the earned-to- contributed revenue ratio varies greatly among different categories of nonprofits, very few exist that survive exclusively on earned revenue.