Let’s get real about sustaining good programs, and even good organizations. One of my consulting clients has had me on the road over the past few months helping a group of nonprofit organizations create sustainability plans. The nonprofits have a common funder, which has asked them to continue, in full, a complex project each was heavily funded to create and implement over several years. It didn’t take me long to realize that I was going to be the bearer of bad news to each of these groups: sustainability is not possible…if it is defined as simply replacing dollars.
The math just does not support the reality of replacing their awards dollar-for-dollar. For that to happen, each organization would have to raise at least 15% of their original award in new money, compounded each year over the five years of funding they received, to be ready to continue on their own when the money spigot is turned off. This kind of growth in contributions is Herculean even in the best of times.
These are not the best of times for nonprofits as illustrated recently in an article from The Chronicle of Philanthropy. In brief, of the 400 charities in the United States that raise the most money, donations grew only 4 percent in 2012, and the projection for 2013 is only 3 percent. Even the United Way Worldwide, a powerhouse in fundraising on behalf of nonprofits in communities around the world, is struggling. It had only a 1 percent gain from 2011 to 2012 and, since 2007 when the recession began, it has seen at least a 16 percent drop in private donations. Yes, the United Way is a big organization as are all of those 400 charities. However, some of them, like the United Way, are also funders of smaller, community-based organizations like those I’ve been visiting over the past few months. I think you get the idea. It’s pretty scary stuff, even for Halloween week, so I’ll let you read it for yourself.
My experience in the nonprofit world is that we’ve too often thought of sustainability as simply replacing the money we need to operate our programs and organizations at the status quo. When the economy is thriving, it tends to work, though it is still a shortsighted strategy. In lean times, like those we have been facing, it is not realistic. Today we assume, only to our own destruction, that we actually can simply replace the money. Since 2007 I’ve seen too many good organizations and good programs cling to this concept of sustainability even as they were closing down and turning out the lights.
What is a realistic approach to sustainability today? This is the question that has haunted me for some time, especially as I’ve been working with a lot of organizations to help them create sustainability plans for their massive, possibly over-funded, projects. I don’t have any clear answers but I do have some ideas bubbling up.
Idea #1: None of us need as much money as we think we do, to do good. I actually winced when I wrote that because I don’t really want to admit it. However, I do believe it. If we are working in the social sector (a term for the nonprofit sector that I’m becoming increasingly fond of), then we need enough funding to pay our staff their worth, to deliver high quality services or programs, and maintain an effective infrastructure. This can still amount to a lot of money, but what is it about the concept of “nonprofit” that we don’t seem to understand? Yes, nonprofit work is a business, but it is business that has social good as a bottom line, not profitability.
Idea #2: Financial stability is realistic and attainable, financial sustainability is neither in the current economy. I have come to differentiate between financial stability and financial sustainability. Financial stability means pretty much what I described above: enough funding to pay staff their worth, to deliver high quality work, and maintain an effective infrastructure. Financial sustainability, however, is about maintaining the status quo by replacing funds dollar-for-dollar. Many nonprofit leaders are rightly concerned for raising sufficient funds to merely achieve stability. I recently completed some research that found a consensus among small nonprofit organization leaders that fundraising was their single most stressful task. The burden they carry is a great one. Sometimes, however, it just isn’t possible to sustain every aspect of an organization’s work at its current level. In fact, some things should not be sustained. Some services and programs are better provided by other organizations. Sometimes they are better off being maintained and sustained by volunteers in the community. Some programs and services are no longer needed. And, honestly, some services and programs are lousy and should be discontinued altogether. These are tough calls to make. Sometimes the political pressure and grief a leader gets from within her/his organization make it impossible to do anything except jump on the fundraising treadmill. What kind of organizational culture would emerge if leaders were to make those tough calls? Would they experience less or more stress? Would there be a renewed focus on doing good for the sake of good? Just wondering.
Idea #3: Community ownership = sustainability. This idea has been growing very large for me over the past few months and last couple of years. The more I learn about social change and sustaining it, the more I become convinced of the power of the community, and society as a whole, to create and sustain the change that is most meaningful to it. Those of us who are veterans of the American nonprofit system are really experts at coming up with good things to do TO other folks whom we believe need them (as a result of our endless needs assessments). What I’ve observed on the ground, however, is that our needs assessments rarely engage the people with lived experience of the issue we are trying to address. Instead, we convene meetings, advisory groups, and, even focus groups, of the usual suspects and ask them what the community needs. Ironically, and unbelievably, I’ve seen many of these kinds of needs assessments conducted with people who don’t even live in the community, they only work there. The justification for including these folks? They are experts. However, who is really more expert on their community than the people who actually live in it and deal with the issue on a daily basis? This top down approach has to be propped up through endless fundraising efforts (financial sustainability) and appears to be successful as long as the cash is flowing into it. However, when the funders lose interest and the money dries up, the nonprofits often go away (many must go away to survive) to greener fields. This is an oft told, and shameful, story of social change in the United States. On the other hand, when the community (those people with lived experience of the issue) own the change, it doesn’t go away regardless of the funding.
These are ideas that have been bubbling up within me. Even more, I’ve allowed the paradigm shift they imply to take root. The ideas are still bubbling so you can expect to read more about them here in the future.