Early in class this week, we discussed for a little bit what
experiences of ours inform our attitude on philanthropy. For my blog post, I'd
like to share (one of) my answers to that question.
As I mentioned during our first class, my mom started a
non-profit called Big Learning, Inc when I was in seventh grade. Its goal was
to provide after-school enrichment classes that touched on a wide variety of
disciplines, from math and science to history and art. She started the company
completely on her own- she had no financial backing from anyone, no employees,
and no one to even help out besides my dad. Additionally, the recession made it
a very bad time to be starting a non-profit.
One of the biggest problems she encountered over the years
of growing her non-profit was how hard it was to get grants. Over an over, foundations
told her that they wouldn't fund Big Learning because it was too small. It
didn't have employees, and it didn't have a large circle of influence. However,
these problems were very hard to solve without funding. This left my parents
running the entire non-profit by themselves, doing everything from developing
and running classes to marketing to packing materials. Big Learning grew for
five years, at which point it merged with a larger non-profit, but it never
really solved the issue of needing funding for growth, but needing to have
already grown to get funding.
Big Learning is not the only non-profit to get caught in
this vicious cycle. Even though this is such a big problem in philanthropy, my
parents could only think of a couple potential solutions. One charity, A Wider Circle ,
collects unwanted furniture and distributes it to people who need it. They got off the ground very
quickly, at least in part to their very simple (though still worthwhile)
mission. Many charities and non-profits can't describe what they do in half a
sentence, and thus, find it more difficult to get funding. Another non-profit organization,
KIPP, started with one very rich person providing the financial backing. With
enough money to grow the organization, KIPP
soon became very widespread, and escaped the cycle enough to be able to get
grants to sustain itself. Obviously, not many non-profits start with
millionaires backing them, so this strategy can't be counted on either.
Since our class will be deciding which non-profits deserve
our funding, I think this is an important issue to consider. I'm not saying
that new, unestablished charities are better than established ones. In fact,
the opposite can be true. However, with all the talk about successful charities
that don't spend their donations efficiently, I think it is worth considering
giving to new charities that are struggling to get going, especially since new
charities may be addressing a community need that larger, established ones aren't.
What is your opinion about non-profits that need growth to
'deserve' funding, but need funding to drive their growth? Will our class be
able to do anything to combat this problem?
-Jesse Cole
This post evokes an interesting idea. Personally, I would be all for donating to a newly-established not-for-profit provided that we were able to ensure that it is respectable and completely legitimate. One possible barrier to donating to a less established charity that I can see would be simply finding the right one among all of the other more well-known charities in the area. It seems that what many new not-for-profit organizations lack is exposure, leading to them often being overlooked and contributing to the "vicious cycle" that you've mentioned.
ReplyDeleteYour idea of helping a new organization off the ground brought me to try to search online for potential organizations. I'm not sure if I was attempting the wrong searches or what but I was having a very difficult time finding smaller, less established but possibly more need-addressing organizations. If we are able to find a new charity to assist then I am all for it because I really like the idea of there being more not-for-profit groups working toward bettering the area. I am just worried about the prospect of finding a worthy one among all of the larger and broader-based not-for-profit organizations.
I agree with Kyle that legitimacy plays a huge role when people decide whether or not a nonprofit is worth investing in. This article from philanthropy.com addresses some of the concerns associated with donating to a smaller nonprofit: http://philanthropy.com/blogs/money-and-mission/how-small-nonprofits-can-improve-their-fiscal-health/28071.
ReplyDeleteOne of the reasons I found this article so interesting was that it gave advice to grant makers who are considering investing in small nonprofits. Though some of the advice, such as "support what already works," can contribute to the vicious cycle, other suggestions like investing in the infrastructure of an organization can have a huge impact on the nonprofit's success.
Many of the people who decide to start their own nonprofits are eager to help as many people as possible right away. However, they need to consider investing in their own infrastructure if they want to become a sustainable organization. In the same way that some philanthropists choose to invest their money in order to get more money to give away later, the new nonprofit heads should take the time to gather the proper resources to show that they are a legitimate organization.
As for our class’ donations, I would not have a problem investing in a small nonprofit as long as we know that the organization’s work is sustainable. Perhaps we could donate to organizations that would use the money to build up their infrastructures and gain support from other grant makers.
I like the article Martha posted, and I agree that it has some good ideas and some bad ones. Like Martha, I also disagree that grant makers should support what already works. Although this advice doesn't discourage grant makers to avoid giving to new non-profits entirely, it does provide a conservative approach to giving. I think that grant makers should be open to new ways of doing things, although they should only give money if they support the new approach and feel that it could work.
ReplyDeleteOne point the article made that I really identified with was that Executive Directors of non-profits often end up handling finances on top of their leadership duties, as the shortage of money when starting up makes it hard to hire finance professionals. Handling the finances takes time away from the Executive Director's main job, and may hurt their performance in both areas, especially if they don't have a background in finance. This is exactly what happened to my mom; I distinctly remember one family trip in which she spent an hour on the phone in the back of the car frantically trying to hire a bookkeeper. Not having the money for a real staff lends itself to a second type of vicious cycle, as all the employees covering roles they are not totally qualified for hurts every area of the developing non-profit.
All of this makes me feel even more strongly that our class should be open to helping new non-profits get off the ground. While even an established local non-profit would love to receive several thousand dollars from us, that money could be the difference between staying in business and closing for a new non-profit. Neither Kyle nor Martha were opposed to giving to new non-profits as long as the class could be sure that they were going to do good things with our money, and I hope that other people in the class feel this way too.
-Jesse Cole
I think we all want to do as much meaningful philanthropic work as we can with the money we are given. I also agree with what has been said, I too am open to the idea of giving to a start-up non-profit. The three key problems mentioned above, sustainability, effectiveness, and legitimacy, all embody the category of performance. In other words we want to see results after we give money.
ReplyDeleteI believe this conversation offers a avenue to discuss a greater issue. What criteria will we use to determine the non-profits we will donate to? From this discussion I believe we have identified two important criteria of potential non-profits. First, the need for monetary start up funds. Second, effective non-profit performance to achieve goals.
At this point of would like to offer a crucial, but extremely subjective criteria: the goal. I believe that when we are determining what non-profits to donate to, one of our problems will be prioritizing more important causes over others. I do not have a system to do this. I think that this criteria will be extremely difficult to decide and the earlier we figure out how to determine this the better. Just some food for thought.
The greater issue of figuring out what criteria we will use to select which non-profits get the money is a crucial one for sure, and unfortunately is an immensely complicated one. This was evidenced from day one in class, when the poll questions revealed that the small class of only 25 itself had an immense variety in the fields in which we did philanthropic work as well as what kinds of organizations we worked with. There is no right way to decide what charity "deserves" the money because every philanthropic cause deserves money. The decision is purely personal.
ReplyDeleteTo touch on the idea of legitimacy mentioned throughout the comments, this is much easier to measure with larger more well established charities. When we don't have a charity that's been around for a long time and that has received tons of money, we can't use those typical factors to measure legitimacy. That's why I submit that when evaluating a start up charity, we really have to look to the people running it. They, as the starters of the charity, will guide its direction from the start and will be responsible for its success and drive. That's why the on-site visits and conversations with charity representatives will be so important. If we like what we see from the people starting the charity, we can tell, as best as possible, that our money will go to a good cause.
I agree with the post Jesse. It is a very interesting topic and offers a new perspective to the way we narrow down our non-profit list at the end of the semester. It is obvious that this idea deserves to be heavily discussed as I assume that it will be in class either tomorrow or in weeks to come.
ReplyDeleteAs already stated, the discussion will involve criteria that we have no idea how to obtain, mainly because of the fact that they are a new non-profit and it isn't clear how the organization will function. My question is: how do we know that $10,000 is enough money to get the non-profit up and running? While I agree that when starting a company or organization, every little bit counts so it is not to say that our money would be a waste, but if the money is not enough for a jumpstart, is our money better used somewhere else? KIPP was backed by a millionaire so how much money will it take and how do we determine that?
However, there is no "bad" charity to donate to (except for ones that give their money to executives and don't help much). When making our decision I think it will be important to keep in mind that $10,000 is a lot of money and no matter which organization it goes to, there will be people getting finally getting help.