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Nonprofits Waste Money & Businesspeople Are Heartless

I’ve just left Cambodia, where I gave a TEDx talk and met a lot of interesting people, and I walked away with a few realizations:

My allergies do not appreciate the dusty heat of Cambodia.

Cambodian food is good, but the beer is just as weak as in Thailand.

Nonprofits and entrepreneurs owe a lot to one another, but neither has much respect for the other.

This last point came up a few times during my time in Cambodia, because parts of Phnom Penh are absolutely crawling with nonprofit workers. Especially in the crew I was spending my time with, a solid 80% of the people I met were working for, working with, or running a nonprofit of some flavor.

I took advantage of the situation by trying to ascertain what I should be looking for in nonprofits to team up with when I start businesses. I like to try and give a percentage of the profits from my ventures to a good cause, but at the same time I have trouble finding groups that I feel are using the money wisely and not wasting it on bureaucracy.

I didn’t say it using those exact words, but every single time I brought up this concern, I was immediately pounced upon and argued down. “No, business people simply don’t understand that there are costs associated with doing this kind of work and it can’t be measured the way they want it to be.” The followup was unsaid but implied: “So they should just shut up and give us their money.”

And that kind of sums up the problem coming from both sides, doesn’t it? The fact that businesspeople tend to look down on nonprofits as people less capable of making money for themselves, beggars with their hands outstretched, spitting on the businesspeoples’ shoes while demanding to have their endeavors paid for.

In the same way, folks who work with nonprofits tend to look at businesspeople as individuals who only care about the bottom line and see everything as a transaction, even things that are clearly valuable but not necessarily in a way that you could measure with a spreadsheet.

What both sides need to realize is that the very things they criticize about the other camp is what makes their own lifestyle possible.

Nonprofits could not operate without funding, by definition, so being critical of those who make money (and the mindset it takes to make that money) is silly and counterproductive.

Similarly, without people in the world who are willing to work on projects that do not pay off financially (at least not in obvious ways), the quality of life businesspeople enjoy would be severely hindered by expansive poverty, disease, and other infrastructural issues that no one would take care.

The issue, as I see it at least, is one of communication.

Because businesspeople and the non-profit crowd don’t speak the same language, we have trouble communicating that we really want the same things: better lives for as many people as possible, and the requisite resources going to the right places.

When someone from a nonprofit background sees a problem, they organize and get their hands dirty, building a bridge or library, or delivering healthcare supplies. A businessperson will be much more likely to want to figure out how they can create a sustainable stream of resources to fund bridge-building in the area, pay for more books, or whatever else, over time.

This is a good thing. This means that we have people with different strengths focusing on what they do best. Further, their skill sets are complimentary. So while one is good at funding, the other is good at doing.

What both sides really need to work on, however, is that communication gap.

Businesspeople will be businesspeople, and what we want to see is some indication that we aren’t just paying for people from first world countries to hang out in third world countries. We want to know that the resources we provide are making a difference in some way, and that they are being applied in the most effective and efficient way possible. A nonprofit that is able to figure out how to translate their efforts into visible or quantifiable results will find themselves with a lot more funding and support.

Nonprofits will also be nonprofits, and they want to know that their efforts are appreciated and that the difficulties they face are understood by the people signing the checks. It’s not always possible to show numerical evidence of progress, because a lot of what they do is related to core infrastructure, so the results will not be seen for another generation or two. The biggest issue that most nonprofits seem to run into is funding, though, so if more businesspeople would be willing to commit long-term rather than hopping on whatever cause is most trendy at a given time, I would imagine more nonprofits would be able to communicate the impact their resources are having in a way that makes sense to everyone. Because they would know the resources are in place to plan for the future.

I hope it’s clear that I’m not trying to offend anyone: I want to emphasize this, as it seems like any time I bring up this issue with people from either side, they immediately go on the defensive, rather than welcoming the conversation. I think the there are a lot of good people on both sides of the fence that have similar goals and good intentions. We just have to remember that we need one another, and everyone benefits when we work well together.

What we have to do now is tear down this fence and start learning each other’s language.

Update: February 7, 2017

I remember this being perceived as a very confrontational post when it first went up, and I think a lot of that is my fault, for not being more clear and concise. There are also a lot of broad generalizations in this that are not as certain as I made them out to be.

In short, I think that people of all stripes need to learn to communicate better. This is a major challenge we face contemporarily. All of us will benefit in numerous ways the more capable we are of communicating not just data, but intentions to each other.

That includes people who volunteer and run nonprofits, and the people who fund them. These are very different types of organization, which pay attention to very different metrics of success. If they can come up with a shared dialect that allows them to share what the other side is looking to understand, I think both groups would operate more effectively and efficiently, and we’d all benefit.

The extra verbosity in this original post didn’t help communicate that, unfortunately.