I'm flabergasted, too

I’m so with The Agitator on this one.

Today the site references a post on Don’t Tell the Donor that disagreed with an article originally published in a local business journal about nonprofit accountability.

The original article stresses that nonprofits need to measure outcomes and show transparency.

Today, nonprofits need to operate like a business. Budgeting funds is a must, along with executing careful and appropriate fund raising with outcome measures in place to asses its use of funds and success. Measuring outcomes is more than just good management. Having accessible outcomes data also improves the organizations’ capacity to fund raise and advocate on behalf of its mission and clients. Nonprofits need to market what they do to their community and have open books for their funders.

Don’t Tell the Donor calls that “Rubbish. Total rubbish.”

The Agitator disagrees:

If you “Don’t tell the donor” how you are achieving outcomes and carefully stewarding her or his contributions you might as well kiss that donor good-bye. Whatever the role other institutions, like big business, have played in undermining public trust in general, like it or not, that diminished trust in all institutions is the reality every fundraiser and every nonprofit must confront head-on today.

Right on, Agitator.

Maybe there was a time that you went out and got that shiny 501(c)3 tax-exempt status from the IRS and then watched the money roll in, but not anymore.

Folks are skeptical, and they should be. They’ve seen too many businesses, forprofit and nonprofit alike, promise the moon and deliver nothing. People don’t give money just for the tax break. They want to know where the money is going and how it’s being spent, and they want to know that the money is helping the organization accomplish the mission the donor believes in. 

I’d even argue that a nonprofit has to be even more business-like than a forprofit business in how it keeps its books and reports what it’s doing. You walk into Target, you buy your widget, you walk out. Do you stand there and ask the company how they’re doing towards their long-term goals in making more widgets available? Do you say, “you know, the guy back there in the widget department did a great job and I think you should sell more widgets. So I’d like every cent of this purchase to only go towards paying people to build more widgets.”

Bottom line: A nonprofit is a business. The difference between a nonprofit business and a forprofit business is how much tax you pay, and the currency you use to measure your success. Period. If you want to save the world, but you have no interest in bookkeeping, paperwork, balance sheets, memos, and reporting outcomes then you have two choices. You can either hire people to run your business while you concentrate on only doing the mission, or you don’t start the path towards this world at all. It’s those who don’t see their responsibility to donors for what it is that make it so much harder for the rest of us.

If you play it loose and crack everything up to “but we’re only a small nonprofit, we’re not a business” then you may get that sympathetic donor once. Once. But will they come back?


2 responses to “I'm flabergasted, too”

  1. I don’t that “Don’t Tell the Donor” was arguing with the need for nonprofit accountability. I believe their problem with the original article (and I agreed) was the tone taken, and the assumption that nonprofits don’t take their budgeting or accountability seriously.

    There are certainly organizations that need help in these areas (just as there are for-profits who keep consultants busy), but on the whole, the sector does quite well.

    We don’t “need to operate like a business.” As you pointed out, nonprofits ARE businesses, and have earned the right to be acknowledged as such.

  2. Fair enough, Ken. But I do think the noprofit sector is bearing the brunt of a general atmosphere of distrust that didn’t exist 10 years ago. The Internet doesn’t help. One bad story travels fast (as this discussion attests) and poisons the whole pond.