The Nonprofit Culture of Poverty Part 2: Power Structures

This is the second in a series of posts examining the Nonprofit Culture of Poverty. The first can be found here. Even though today’s post might be infinitely more interesting, depending on your taste, it’s probably a good idea to read that one first. Then come back. Then tell all your friends.

To extend my comparison of the culture of poverty to the attitudes and patterns in which nonprofits tend to operate, we have to take a look at how nonprofits associate with power. People who exist within a culture of poverty have a...nuanced...relationship with institutional power. People living in poverty tend to be unbanked, as they are suspicious of financial institutions (and vice versa). They tend to maintain low-wage jobs with little room for advancement, where they are expected to keep their heads down and do their work without protest or opinion. They live outside the mainstream systems we have set up to conduct business, accrue assets, and enhance financial stability and mobility.

Nonprofits, too, have a complicated relationship with power - especially when it comes to money. I’ll caution you now: I don’t work for any single nonprofit anymore, and as such, I feel very free to say whatever I think about funders and foundations and corporate giving. I shall. You might not like it, or you might be like, “THANK YOU! SERSLY!” The latter would make more sense to me. If you are a funder, you’re welcome for speaking the truth and telling it like it is. You need to know, because I know you’re actually trying to help. Let me help you help.

As for power, money, and funders, here’s a little story for your reading enjoyment. Years ago, when I was a fresh-faced young nonprofit executive, I attended one of those fun “meet the funders” roundtables hosted by a local nonprofit networking group. As I rounded the tables and met the funders, I heard a few things over and over again. They were things that I had read in guidelines many times, but had a hard time actually believing until they were repeated to me in real life. Things like:

  • We don’t fund any overhead: “Not even 10%?” “Nope. Not even 10%. We want to see our money going to actually help people.” This is a load of tripe, and everyone who runs a foundation absolutely, deep in their hearts must know that. I can’t imagine foundation leaders suggesting to themselves, “let’s run on just 10% overhead. Welp, guess that means our gold-plated penthouse office in the center of a very expensive city has got to go. Let’s see if someone can just donate some space to us. Oooh, and I guess we’ll have to cut back on our program officers...Ooooh, and I think our CEO gets paid too much, so let’s make sure he [interjection: I said “he” because as a high-dollar budget organization, the CEO is far more likely to be a man] draws a modest salary” This is a double standard in the most egregious form. You want someone to “actually help people???” Pay them. PAY THEM TO DO IT. And pay them to do it right. Funders perpetuate a culture of poverty when they insist, with all the earnest paternalism in the world - that we need only a certain amount of money to do what we need to do. And that they can choose to only pay for certain line-items because that’s where they want to make an impact.

  • We don’t fund [fill in the blank]: Not only at this roundtable I attended, but within countless rejection letters, funders reiterated their commitment to purity by noting what they would and would not pay for. I once received a rejection letter from a foundation that said, and I am completely not making this up, “We don’t fund staff, capital, overhead, program or project expenses.” I was left baffled as to what they actually did fund, but I was too bemused by the letter to bother asking. I did keep that letter and show it to everyone, because it was a hilarious. Hilarious in a laugh until you cry, but then you might be honestly crying, kind of way.

  • We only fund emergency services: This was interesting to me. What about work that helps decrease reliance on emergency services? This would allow for emergency services to focus their efforts on helping those who need the help most, and…”Nope! We just fund emergency services.” At the moment this discussion happened, an epiphany hit me like a choir of violent angels. “OH. A lot of funders only pay for emergency services - and also not overhead - which keeps the nonprofits doing that work barely surviving, just like their clients - and because the same clients come back year after year after year, they look like they’re serving a lot of people...and the people who work in those organizations also don’t make enough money, so often qualify for the services of said nonprofit as well, contributing to their numbers and the need, and...oh my god. It’s a trap. It’s a scarcity trap. Holy crap.”

  • We have a 9 billion step application process that takes a year: Have you ever applied for food stamps? Or any kind of aid? Or applied to go to college? Or filled out a FAFSA? Or applied for a government job? Demoralizing and the worst, right? Look. I understand funders need to institute processes to screen organizations. As I’ve read in countless rejection letters from foundations, “There is always more need than we are able to fund…” I get that. But making the process onerous and time consuming is not helpful for nonprofits, who are already strapped for time. Further? It keeps them scrambling in the moment to reach another immediate deadline rather than doing work that is focused on the mission result.

  • We require you to implement the latest fad: Theories of Change? Collaborative Impact models? You name it, if it was published in the Stanford Social Innovation Review* once, we’ll make you do it, even if it doesn’t make sense for your organization, or you implement it poorly just to get the grant.

*with all due respect to SSIR, which I freaking love, but you know what I’m saying…

  • We need you to make this project sustainable within three years with no further funding from us...and of course we don’t fund fundraising! Duh!: I have no words for this. I am a HUGE fan of looking at grant money as seed capital - as venture capital for nonprofits. Often, it’s a great way to get self-sustaining programs and products off the ground to meet mission needs and support the nonprofit’s bottom line. However, not all projects and programs will work this way. Some of them don’t have revenue generating potential and yet serve a vast community need. What then? We have to magically leap to the inane conclusion that we’ll find other funders who will cover the program by then. The reality? We’ll probably just repackage the program and push it off on someone else as a “new” thing. Speaking of which:

  • We don’t fund ongoing programs...but we want to only fund “evidence based” programs at the same time: Ah! No problem. So, we’ll just constantly come up with something new to offer grantors...that has been clinically proven to work (somehow? By someone somewhere?) and of course we’re not chasing money! We’re just “innovating…” or “replicating?” This is not really quite intellectually honest. Everybody wants to put their name on the next big thing, and at the same time, they all want to make sure they’re paying for something that will work. Can we have it both ways? Maybe. Maybe not. Probably sometimes.

These are just a few silly examples of how funders give nonprofits the runaround. Why can they do this? Well, they are the ones in a position of power. They give the money out, right? That means they can call the shots, right? Or does it?

Throughout history, oppressed people have risen to the occasion to claim their power and create a more advantageous distribution of power. The labor movement. Every revolution, ever. Even where they are not successful, the idea is to wrest the unfair amount of power wielded by the powers that be to allow others to participate. Nonprofits have such a moment right now.

Funders are your partners. They are here to help. If they aren’t helping, they need to know that. They need to hear it from you. Instead, what they mostly get is quiet, cowering fear. We don’t want to challenge them because we don’t want them to take away our money. We don’t want to burn our bridges when we say we can’t live with 10% overhead with a well-reasoned case, so we say nothing, swallow our objections and make do. It’s not healthy. And it isn’t helping.

Here’s the thing. Nonprofits, you, like workers who might could form a union, have power. If we all work together to create a reasonable case for our businesses, we could make changes and have influence. It’s already starting. Groups like Dan Pallotta’s Charity Defense Council are rocking some change on the overhead front. The insanely perfect Nonprofit With Balls blog (no, I’m not jealous at how apt and hilarious and poignant all of his posts are. Why do you ask?) constantly points out the silliness of how we do business and how funders pay us.

When we live in a culture of poverty, we not only lack power, but we are suspicious and fearful of those who do have it. We don’t need to feel that way, though. Instead, we can join together and take courage. We can have conversations with our funders that provide them with honest feedback. We can demonstrate to them what it really costs to do the work we do, and how much we have to twist ourselves into human pretzels to do it within the competing parameters different funders require. We can ask them to help us help them get the impact they want - by funding the work appropriately and sufficiently.

And so, I urge you, dear countrymen and nonprofiteers, to speak up. What do you really need from your funders? How do you really need them to partner with you? What would your relationships with them look like in a world where they were truly working with you every day to make a difference in the world? Think about it. And then...say something. I dare you.

Here are my suggestions as to what you might ask for:

  • Sufficient overhead funding

  • Seed capital for very small pilots (minimum viable programs) that you can build, measure and learn from quickly and nimbly with little investment

  • Ongoing funding for programs that really do work

  • Simpler application processes

  • Capacity building

  • Funding for fundraising

  • Funding for evaluation (if you want it, you gotta pay, son!)

Godspeed. You got this.