November 10, 2009
Debate About How to 'Fix' the Nonprofit World
Should a recent opinion article about how to “fix” the nonprofit world be applauded or trashed?
The Wall Street Journal article by Pablo Eisenberg, a senior fellow at Georgetown University’s Center for Public and Nonprofit Leadership (and a frequent Chronicle contributor), has stirred up a range of reactions.
It has generated more than 50 comments on the newspaper’s Web site. The most contentious of Mr. Eisenberg’s suggestions is that foundations should be required by the government to give more money to charity each year (6 percent of their assets versus the current requirement of 5 percent) and that they should provide more support for “organizations serving the poor, people of color, women and children at risk, gays/lesbians, disabled and troubled youth.”
Some argued that these proposals would hurt donors and that the government should be involved in philanthropy as little as possible.
“Donors give to what they want to support. It is their right. If this doesn’t include your pet causes, you have no right to complain,” writes “Jonathan Katz” in a comment.
Others hail the ideas. “This article hits it on the head! Bravo for telling it like it is. There are too many private foundations that do not contribute to the real needs of contemporary American society,” writes “Michael Quirk” in a comment.
One view not reflected in the comments comes from Brian Reich. On his Fast Company blog he says he agrees with many of Mr. Eisenberg’s views but that the opinion writer’s “suggestions for how to fix the system didn’t go far enough.”
Mr. Reich, a technology and media expert, says the nonprofit world needs a “total reset” because the Internet has and will continue to alter how people interact.
“The game is different, the rules need to be re-written, and until the nonprofit and charitable community, and those who support and benefit from it, understands that everything has changed as a result of the impact of technology and the Internet, everything else is window dressing,” he writes.
What do you think of Mr. Eisenberg’s article and the reactions to it? Click on the comment button below to share your view.
Comments
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Response to WSJ
Pablo Eisenberg
November 10, 2009 OP ed
If you have any responsibility for non-profit fundraising, there is an already existing program that addresses four of his nine points, the Combined Federal Campaign, or CFC.
Point 1 – Increase the Distribution Percentage
In terms of actual giving, if the CFC were a foundation, it would be the 10th largest foundation in the US. ($257 million annually). In terms of payout ratios, it’s 92% compared to the foundation world’s required 5%.
Point 2 – Increase General Operating Support
Funds donated through the CFC are unrestricted, can be used for both programs and general operating support.
Point 3 – Increase Multiyear Funding
If a non-profit develops a CFC revenue stream, it is really developing multi-year (ten-twenty year) donors.
Point 7 – Simplify Application and Reporting Procedures
The CFC has an open application process (94% acceptance rate) and once in the CFC, the non-profits have less red tape than almost any foundation grant – not bad for a government program!
Regards,
Bill Huddleston
www.cfcfundraising.com
P.S. The CFC has generated more than $1 billion of unrestricted funds over the past five years, helping thousands of local, national and international non-profits.
— Bill Huddleston Nov 10, 04:45 PM #
I do believe the foundation world needs revamping, but don’t believe they should be forced. In my opinion foundations and donors are limited by what they know. Too often they sit behind their desks reading proposals, and have little direct touch with charities in at-risk communities. They also judge charities by one set of standards built for larger, more established and well-supported organizations.
Unfortunately, these donors have little knowledge of how to support smaller/less mature organizations, therefore have negative funding experiences and jump off too soon or don’t fund at all. It is rare that the trustees of these foundations represent diverse cultures, that include class and education. If you don’t have a large position or degree your experience is not respected by these organizations, no matter your race, sex, or ethnicity. Many times they exclude the people who can help take their funding to a level that really works (not just on paper). Why is it that each year donations increase but things just get worse?
It will take a few of us who have our feet firmly planted in both worlds to knock on doors, open them and educate foundations and wealthy donors on what the true needs are, especially in communities they hardly touch. They believe because they have hired a person from the corresponding race, sexually preference, ethnicity that these people will have the answer. Well they know no more than them and they are all clueless on how to find the talent to help them.
Education happens at all levels and degrees are just half of it. Education is for the things we don’t know, not just the things we want to know. We understand the cultural norms of a capitalistic society—we all aspire to be the “haves’. Most of us who dominate and succeed spend little time with and know little about the “have nots”, yet we make decisions about their destiny everyday.
But we are not intentionally arrogant, just uneducated and poor education promises few results, as we know.
Some things take more time and effort. Reconstructing a value system for the elite is tough. They/we decide what they need to know and it is hard to get around that. Some things take time, persistence and a good case; it is that simple.
— Chandra Anderson Nov 11, 07:19 AM #
It has been my opinion, for over 33 years in the nonprofit sector, that the flat rate of 5% was very low. On this, we seem to agree. The actual grant writing process needs revamping. I for one am tired of writing and following guidelines for a $10,000.00 grant as I do for a 1 million dollar grant. Foundations need to maintain a wider focus cause-wise and geographically. I am a writer in Florida and a foundation head/trustees should not spend 6 months here sucking up our services and then limit their foundation’s giving to say Michigan. I see a great deal of this going on here.
— Robin Kaercher Nov 11, 12:23 PM #