American's trust and confidence in nonprofits is alarmingly low. Confidence in charitable organizations stands roughly 10 to 15 percent lower today than it did in the summer of 2001.I'm not quite sure what Mr. James' agenda is, but it's obviously not support of the nonprofit sector, and he obviously doesn't have much experience in the sector either.
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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.
First off, his comparison of confidence ratings is to "the summer of 2001" - before 9/11, and before the resulting Red Cross scandals. That would also precede the Enron scandal as well. How far have confidence rates in the "business" sector dropped in the same period?
As "a fundraiser" at the Don't Tell the Donor blog points out, confidence in the nonprofit sector - while a problem - is still higher than confidence in the "business" sector. "A fundraiser" goes on:
Nonprofits weren't the ones that forced the government to pass Sarbanes-Oxley reform, yet we now spend the time and money to do our national duty and restore trust after corporate businesses destroyed public trust.Beyond Mr. James' use of the tired old admonition to "be more businesslike" is his assumption that nonprofits need a lesson from him on the importance of budgeting and measuring outcomes. We know how to budget, and our budgets are often far more detailed than the budgets of similarly sized for-profit businesses, with the tight managing of restricted funds.
Our budgets are reviewed by our funders in the foundation and corporate worlds, and those funders are not shy about asking questions about those budgets, and making us justify every expenditure. Likewise, those funders have already let us know about the importance of outcomes measurement, and we have included our evaluation plans in our funding proposals.
Mr. James really should learn more about nonprofits. He might be surprised to learn how professional and efficient the nonprofit sector really is. Then he might be able to write a business column about nonprofits that is actually informative, educational, and of benefit to the community.
Yes, we know that we have to work hard to earn and maintain the public's trust in nonprofit charitable organizations. It does not help, however, when columnists perpetuate misunderstandings and false assumptions about our sector. When you see these in your local paper, be sure to write a reply, and let people know what you're doing to make the community stronger.
Tags: nonprofit, business, fundraising, outcomes measurement, budgeting
Thanks for the link Ken. The Agitator had a slightly different take on the post:
ReplyDeletehttp://www.theagitator.net/index.php?/archives/406-Were-Flabbergasted.html
But this is how I responded:
First, I have to say how thrilled I am to see the speed at which this story was debated by the nonprofit fundraising blogosphere. I wonder if Stewart James realizes his article has been the subject of Donor InSite, The Nonprofit Consulting Blog, Don't Tell the Donor, and The Agitator - all within 3 days.
Of course I agree with the need for accountability and measurable outcomes from nonprofits. I am a graduate of the NYU Wagner school, and I was so proud to see Paul Light's study reported on such an awesome site like The Agitator. However, I took issue with the original article's conclusion that what charities need is "to OPERATE more like a business."
I resent the myth that not-for-profit organizations are not as diligent as the corporate sector when it comes to budgeting. Perhaps I am bias because I have only ever worked in the fundraising department of the five nonprofits I've worked for. However, I find nonprofit fundraisers and Development Directors in today's organizations as among the most efficient and effective budget planners on the planet.
...sure there are bad ones to in the nonprofit sector... but that's why I brought up the Enron and other corporate scandals.