Here’s something I’ve been wondering about: are social service and cultural nonprofits really the same species? Sure, we're united by our 501(c)3 tax-exempt status, but beyond that, what's our family resemblance, and is it enough to unite us behind shared values for our sector?
We do come together over certain issues. For example, the Overhead Myth Campaign launched by GuideStar, Charity Navigator and BBB Wise Giving Alliance. That PR and advocacy project is trying to undermine the conventional wisdom operating budget spent on “overhead” (e.g., administration, fundraising) is somehow wasteful, and the lower that spending is, the better. Ironically, this benchmark originated in the same watchdog community now fighting it, but over time wise leaders like Jacob Harold recognized that demonizing overhead crippled the ability of an organization to build the capacity it needs to thrive. Minimizing overhead can be the economic equivalent of anorexia—too few calories devoted to basic maintenance and an organization can starve itself to death. (Or, at least, into perpetual exhaustion.)
The immense respect I have for the Overhead Myth Campaign made me perk up and take notice when Jacob Harold, CEO of Guidestar, tweeted a link to a post by Vu Le titled Why the Sustainability Myth is Just as Destructive as the Overhead Mython his blog Nonprofit With Balls (NWB). But reading Le’s post just revived my doubts about whether social and cultural nonprofits are fundamentally different in their basic economic underpinnings
Le, (who slyly insists the “balls” referred to in his blog title are the ones we juggle as we try to keep a nonprofit afloat) first popped up on my radar as a humor columnist for Blue Avocado, an online magazine for community nonprofits. (Like this post in which he imagines rewriting popular children’s books to be about nonprofit work.) This irreverent approach shapes the post Harold tweeted about, in which Le uses stories about a customer at a fictional “Happy Chicken” fast food restaurant to illustrate how ridiculous it is for donors to care about the sustainability of the organizations they support. He mockingly imagines a customer declaring “I only eat at restaurants where I know they have a strong plan to diversify their customer base so they can keep cooking after I have paid for my meal and am gone.” Isn't this standard just as ridiculous for nonprofits as it is for for-profits?
“Many funders and donors seem to define “sustainability” as “self-sufficiency,” writes Le, “and have this romantic notion of a world where nonprofits don’t depend on them at all.” After some thought, I disagree, at least for museums. For me, the current focus on sustainability is about making sure that a program into which an organization has invested a lot of time, money, creativity, and communications bandwidth isn’t going to disappear just because a particular funder shifts focus or a new program officer comes on board. And it is entirely reasonable for me as a donor, or funder, to want a fair amount of assurance that a museum has a long term plan for supporting their core functions of “collect, preserve, interpret” beyond “people will keep dumping money on us.”
I can’t tell you how many times I’ve tracked down a great program or service referenced in an article or session description, only to hear “oh we discontinued that after [x] years, because the funding ran out.” So yes, in the short term maybe the funders got what they wanted, but in the long term...there is no long term. Often there isn't even any permanent, accessible record of how the program was built and what we learned from it. There are legitimate reasons to end a program—its charm depended on novelty; the problem the program addressed was solved (best case, by the program itself); the needs of the community changed. “It was great but we ran out of money” shouldn’t be one of those reasons.
But fact is, many funders aren’t interested in becoming step-parents. They are unlikely to adopt the wonderful projects started with some other funder’s money. They want to put their imprimatur on something new and shiny, something they can claim as their own.
That’s why I think museums should see grants and foundation funding as investments—start-up cash to launch, test and refine programs that are, yes, sustainable—that have a plan for continuing their great work after the original influx of cash dries up. Le concludes that “Sustainability is about making sure nonprofits are not going to be dependent on funders forever,” which he sees as a chimerical goal. I see sustainability as buffering programs, and organizations, from the vagaries of trends in philanthropy, and ensuring that “found money” in the form of gifts and grants, are invested in improvements that can be sustained over the long term.
Here’s a museum example: Digitization of collections is all the rage right now. Lots of grants being are being awarded to museums to digitize their collections and get them up on the web. But once digitization becomes routine, will foundations hand out grants to support this humdrum basic function with the same abandon? Probably not any more often than they support the purchase of basic archival storage materials, or pay the salaries of people cataloging the collection. Which is to say, rarely or not at all. And (this thought really worries me) who will fund migrating all those millions of digital files to new platforms and formats over time? An inevitable need, totally necessary and (I’m afraid) completely un-sexy. That’s why I believe museums need to create sustainable income streams, including earned income, into their business plan when they tackle digitization. That doesn’t necessarily mean charging for access to digitizing collections. (As I discussed in TrendsWatch 2015, museums would be well advised to jump onto the Open Data train.) But it does mean having a plan that uses open digitized data to build audiences, connect with new partners and (in the long run) generate revenue to support their own existence.
I have no personal experienced with social service nonprofits. Maybe Vu Le’s criticism is apt for organizations that deliver essential services we ought to provide as part of the basic social contract: food, shelter, medical care. Though as a citizen, I happen to believe these essential services should be supported via my taxes, rather than through depending on the largesse of a subset of the population that both cares and has disposable income. Given that this is not the case, what do I, as a donor, expect from the nonprofits that step in where the government does not? Maybe I don’t care whether the soup kitchen will be around next week—because I know people have to get fed TONIGHT. But given the time, effort and money needed to build a successful infrastructure for food (or housing, health care or legal services) I might care after all. Why not invest my charitable dollars in a nonprofit with a sustainability plan that makes it resilient to the ups and downs of donor funding?
So my thought is, either the Sustainability Myth is real, but distinguishes two branches of the nonprofit tree—cultural and social nonprofits, or museums are actually ahead of their social brethren in adapting to the new economic realities of their shared nonprofit world.