Don’t be a Charity Case

Posted by Laura Otten, Ph.D., Director on January 19th, 2018 in Thoughts & Commentary

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While nonprofits may be charities (that status granted to them by the IRS), they are not charity cases.  Nor are they martyrs.  And it is high time every nonprofit came to understand that, pull up their grown up pants and deal with it.

Nonprofits that continually act as if they are the charity cases (love the Urban Dictionary’s definition:  “[a] person who never has any money and/or is constantly broke. Yet, this person never has any problem with always asking you to lend him/her some cash. The biggest problem they have is paying you back on time, if ever. These people are the object of both pity and utter disdain by many”).

Nonprofits who adopt this not only harm themselves, but the sector as a whole, sending the wrong message and insulting those who truly need society’s help and financial support.  Yesterday, we received an email from a former client—by which I mean all the promised work was done to a high standard, work delivered as promised, and the contract closed because the end goal had been achieved—informing us that it did not have the funds to pay us and it was putting the unpaid invoices on the bottom of the pile.  Unless…unless we wanted to wipe the slate clean, wipe the debt, at best, of give them a steep, after-the-fact discount.  Would the person writing the email (along with all the others who must have colluded in thinking this was an acceptable route to take), go to restaurant, order and eat a delicious meal, accomplish his/her goal of filling her/his stomach, acquiring nourishment and, maybe, even indulged him/herself a little and then tell the waiter when the bill was brought that s/he was putting the bill at the bottom of the pile of bills, unless, of course, the restaurant wanted to the meal for free, or at a very steep discount.  Not likely.

In fact, I have to believe that none of the people who regularly think it okay to ask us for our business product for free would ever even think about asking other businesses to give them their business product for free unless they were offering some of equal value in return, like free publicity with a desired audience.  Why, then, do nonprofits think it perfectly okay to ask others to give them help, assistance and their business products for free?  If nonprofits want to be treated with the respect that our sector deserves, if they want to stand side by side with those in the for-profit sector and claim their rightful place as helping people to have and live better lives and to make communities stronger and more desirable places to live then nonprofits best start acting like they can, in fact, do all of that, and not as a organizations needing all of the help they can get simply to stay afloat for the moment.  We are supposed to be providing charity to our communities, not be the recipient of charity.

Nor are we, nor should we be, martyrs.  And, yet, every time a nonprofit submits a proposal to a funder asking for money to fund a specific program or accepts a contract to provide a specific service and ends up accepting money to do either for anything less than what the true costs of providing that program/service are, that is exactly what that nonprofit is doing—being a martyr.

By colluding, we are contributing to our own martyrdom.  I do not pretend to know or understand the fear that so many in the nonprofit sector seem to have when it comes to calculating and using the true costs of a program.  I neither know nor understand people’s fears in telling funders just what those true costs are.  But I do know and understand—as does everyone else—the consequences of the failure to do so:  only a portion of the bill gets paid yet 100% of the good are received.  Again, I can imagine anyone thinking it is okay to go into a restaurant and say to a waiter, I am going to pay 75% of the bill but I expect you to deliver to my table 100% of the food I ordered and expect to receive 100% of the ordered food.  So, why should we think it is okay to submit a bill for 75% of the cost of the desired program and still deliver 100% of the product?

Neither of these described behaviors—both of which happen on too regular a basis in the nonprofit sector—are anything even remotely approaching best practices for running a successful business.  And neither behavior will ever be associated with a healthy, sustainable organization.  Each and every nonprofit has a choice:  be the martyr, charity case or start running like a business deserving of respect.


The opinions expressed in Nonprofit University Blog are those of writer and do not necessarily reflect the opinion of La Salle University or any other institution or individual.