Tuesday, May 12, 2009

A (slight) Return: "Is the nonprofit sector wasting your money?

Self Sabotage
Blogging as Self Sabotage?

Thanks to those who emailed me and also who commented in response to my recent blog, "Is the nonprofit sector wasting your money?"

For those who missed, here are the comments.

Jeane Goforth said...
We are guilty of being one of those small non-profits. However, we are very open to collaboration and consolidation. We keep communication open across the local sector precisely to prevent duplication of effort.
However--and not suprisingly--it comes down to ego and money. So many have the perception that non-profits are automatically wallowing in easy money. I think that's because of some local scandals involving government officials funneling money to friends and relatives through non-profits.
We recently tried to bring a parallel organization without non-profit status into ours. They were perfectly willing to use our status to solicit funds, but unwilling to submit to the governance of our board. Thus, the merger was not possible and they will now file for their own 501(c)3 status.
Denise L. said...
Hi Jeremy,

This certainly is an interesting topic!

After reading your analysis of the Texas nonprofit sector, I just had one lingering question about the second bullet point: are these small nonprofits guilty of maintaining a 16% overhead?

It could be that these nonprofits rely heavily on volunteers and donated office space to achieve their mission, while the larger nonprofits incur higher administrative expenses.
Chris Casquilho said...
Point taken. However many community-based nonprofit endeavors don't scale. There's no magic bullet.
Elizabeth Clawson said...
Excellent devil's advocacy! Along with previous commenters, I do agree that there's no magic bullet, and that not all community-based nonprofits scale. And if I were in one of these small nonprofits, the last thing I'd want to go through is a merger. But I also duplication--of mission, office functions etc.--is a danger. Maybe a group of nonprofits in the same community could take it upon themselves to compare their own office functions, client populations, and other aspects of their work to see where they could share resources? Technology, materials, consulting services--many things could be held in common by several organizations to reduce their overhead expenses.

Grantmakers for Effective Organizations, a fantastic nonprofit here in DC, leads the charge for funding nonprofit overhead costs and operating support--I wonder how they would respond to your post.

What do you think?

I'd love to hear from you. Especially if you are from Grantmakers for Effective Organizations. :)

[where: 75223]