This was the headline BoardSource used to introduce Candid’s latest compensation survey in its SmartBrief: “Report: Midrange nonprofits are making headway on gender pay gap.” Anyone who knows the sector would never think that “midrange nonprofits” referred to organizations with budgets between $25 and $50 million. That might be a mid-range organization in the for-profit sector, but not in ours. Not when the vast majority of organizations have budgets under $750,000. I’d expect BoardSource to understand its audience a little better than that headline suggests?
I’m really tired of folks always talking about the biggies, the household names of the nonprofit sector; tired of their being held up as if they were, or should be, the standard. They are not; nor are they the sector. The more we hype them, however, the more they become the sector in the minds of the public, while the heart and soul—because they are, numerically, the majority of the sector—the small, even scruffy, community based nonprofits—gets ignored.
While we have been asking for years to not judge the goodness of a nonprofit by the size of its bottom line, that conversation has also pushed to focus on impact. If a nonprofit has a very healthy bottom line, but impact data that shows its programs aren’t delivering what they promised, it is not a good nonprofit. A nonprofit with a healthy bottom line but no impact data to tell it just how well—or not—it is doing is not a good nonprofit. We cannot ignore impact in judging which are the good and great nonprofits. While focusing on this all-important question of impact, however, we have obscured an equally important question: what is the best mechanism for delivering the promised benefit?
The motivation in starting a nonprofit is never to make money; therefore, the best mechanism has nothing to do with size. Thus, to hype the larger organizations simply because they are large, belittles and ignores the purpose of nonprofits: to benefit a portion of the public good. (This doesn’t mean that the larger nonprofits don’t benefit the public good).
When nonprofits start out, they are tied to a specific community, a community that the founder has identified as needing her/his help and a community, more often than not, to which the founder has direct ties. Organizational growth and leaving those direct ties and closeness to the community too often happen together, and the larger the organization gets, the further away it gets from its “community.”
As an organization grows, it seems too easy for it to forget its roots—why it started in the first place. Too frequently, as nonprofits grow, growth in and of itself becomes the goal. Being the executive director or board member of a $30 million nonprofit becomes more important than paying attention to how well the organization is doing what it said it would (that impact), more important than paying attention to whether there is a sustainable business model, more important than remembering why the organization was formed, etc.
Rather than growth necessarily begetting excellence, we see unchecked growth begetting the demise of an organization. We’ve seen evidence of this time and time again, with the most recent example coming from California and the death of the 30 plus years old, $47 million Youth Policy Institute.
As your various mail boxes fill up during this last quarter of the year with pleas for year-end donations, I ask you to think carefully about where you want your dollars to go. Don’t give just because you recognize the name of the soliciting organization. Do some homework; take a look at the little folk; and determine who is best positioned to make the difference you seek in your community?