When I was at the Creative Placemaking Leadership Summit last week, one of the other participants asked if there was a way to communicate to funders that they can’t just fund a program and forbid using the money to pay the people who will actually run the program.
I spoke up and mentioned she wasn’t alone, this was a big topic of discussion among non-profits and cited Vu Le’s Non-Profit AF blog as a place where this is frequently addressed.
Along these same lines, I was happy to see FastCompany (h/t Artsjournal.com) is refuting the non-profits should be run like a business argument. The case they lay out isn’t anything you haven’t heard before. They too mention the prohibition on paying people to run the program. It is good to see a business oriented magazine criticizing the practice. It helps circulate the topic outside non-profit circles.
One of the main things raised in the article is that while for-profit success is measured by effectiveness at making a profit, non-profits’ successes are measured by doing everything from treating drug addiction and diminishing gang violence to education about climate change and music lessons. There is no easy metric for any of these, nor is there any relevance in comparing reduction in gang activity to an increase in musical aptitude.
…that hasn’t stopped some deep-pocketed donors from trying. In one case, a venture philanthropy denied a grant to the founding board member and chair of an organization that works with homeless kids because the “cost per life touched” ratio was too high, despite the fact that there was no analysis of how the group compared to others in its area. “Ratios seem rigorous, when in fact it was an inappropriate comparison, given the expense of reaching the different populations,” he says. The measurement didn’t take into account all the benefits that could occur in communities if these life changes stick either. To simplify the argument: “My friend said, ‘I could give everybody in the city a lollipop, and I would have touched a lot of lives.’”
That lollipop metaphor is a tangible illustration of the problem non-profits have been facing with some philanthropic entities. There is a desire for a large quantity of touch points on the cheap. Fleeting impact on thousands this year feels more satisfying than enduring solutions for hundreds over a decade.