Some time back I read a piece on the Bridgespan Group’s website that made me realize that non-profits and funders/donors may adopt similarly flawed approaches to addressing social issues. When you think about it, it only makes sense that two groups that are passionate and idealistic about bringing change to communities might make the same errors in policy and execution.
Because donor/funder is perceived as having more power in the funder-non-profit relationship, it can be easy to assume their decisions are based on criteria that differs from the non-profits seeking their support.
In fact, funders can make inefficient and inconsistent decisions for the exact same reasons non-profits do.
In the article, What Are the Five Most Common Traps I Should Avoid in My Philanthropy?, trap number one is:
Trap #1: Fuzzy headedness
As a philanthropist, your passions, values, and beliefs will fundamentally drive your giving. But unfortunately, “fuzzy headedness” occurs when donors allow their emotions and wishful thinking to completely override logic and thoughtful analysis. One common symptom: When asked “what are you trying to accomplish?” do you respond with broad, hopeful statements (like “curing cancer,” “ending poverty,” or “stopping global warming”)? If so, you’ll need to get more specific because at that level, your goals are still too undefined (and therefore unattainable)…
I realized this is almost the exact same mistake some non-profits make. They embrace vague mission statements and goals and define everyone in a geographic radius as the people they intend to serve instead of having a clearly defined focus.
I wondered if there might be a feedback loop between funders and non-profits with one saying their goal is to completely fix X and the second getting excited and inspired by the goal (or the money now available for that goal). Each party seeing the other is excited and invested in the goal decides it is worthy to pursue and goes on to mutually reinforce this too broad goal upon each other and others around them.
The second trap, Flying Solo, also has a similar overlap. Both funders and non-profits can fall into the trap of believing they know the solution to a problem either through lack of research about previous efforts or ego. The result is they spend a lot of time and effort repeating the mistakes others have made. Or they fall short having overestimated their ability to marshal the required resources alone.
The remaining traps are more funder oriented and have a little less in common with non-profits. Number three deals with under-estimating what it will take to achieve a goal and therefore underfunding the project. The fourth deals with using overhead cost as a measure of effectiveness.
Non-profits could contribute to reinforcing these traps by keeping their numbers low in order to keep their overhead ratio low, resulting in underperformance due to lack of sufficient funding. Which may, in turn, result from less funding from a donor or foundation that expected better results.
Some of the ideas in the article are new to me, some I have heard before, particularly regarding suggested changes in philosophy by funding organizations. The piece could be worth further reading if you are trying to find an effective line of reasoning to convince a funder to adjust their expectations and criteria.