Non-Profits 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:

  1. My allergies do not appreciate the dusty heat of Cambodia
  2. Cambodian food is good, but the beer is just as weak as in Thailand
  3. Non-profits 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 non-profit 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 non-profit of some flavor.

I took advantage of the situation by trying to ascertain what I should be looking for in non-profits 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 and organizational lolligagging.

Now, I didn’t say it exactly like that (I felt I was very diplomatic with my words, but I’m also biased), 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” with the last part 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 non-profits as people not 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 non-profits 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 explain 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.

Non-profits could not operate without funding by definition, so being critical of those who make money (and the mindsets that 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 of otherwise.

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 resources to make positive things happen going to the right places.

When someone from a non-profit background sees a problem, they’ll likely organize a group and go get their hands dirty together, building the bridge or the library or delivering the healthcare supplies or whatever it is that needs to be done. A businessperson, on the other hand, 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 otherwise create torque that way.

This is a good thing! This means that we have people with different strengths focusing on what they do best. Further, their skillsets are complimentary, so while one is good at funding, the other is good at doing. Win-win-win!

What both sides really need to work on, however, is that communications 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 and eat our contribution checks while playing at being rugged. We want to know that the resources we bring to bear are making a difference in some way, and that they are being applied in the most effective and efficient way possible. A non-profit that is able to figure out how to translate their efforts into visible or more-measurable results will find themselves with a lot more funding and support.

Non-profits will also be non-profits, and they want to know that they 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 are doing is such core infrastructure that the results will not be seen for another generation or two. The biggest issue that most non-profits 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 non-profits 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 longer-term.

I hope it’s clear that I’m not trying to offend anyone (I wanted to emphasize this, since it seems like any time I bring up this issue with people from either side, they immediately go on the defensive instead of participating in the discussion in order to find a solution), and I think the there are a whole lot of good people on both sides of the fence that have similar goals and good intentions.

Just remember that we NEED one another, and everyone benefits when we work well together.

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

53 comments

  1. I think the perfect mix of being nonprofit and being businesslike and looking for results is found in social enterprises like TOMS Shoes.

  2. Well said. Too many humanitarian trips aimed at young adults are, as you say, playing at being rugged.

    In regards to efficiency and keeping organisations accountable: websites like charitynavigator.org seem to help.

  3. Having worked for a nonprofit for twelve years and then started my own business for the last five, I feel I’ve seen both sides of the story.

    What I see is most of the big, established nonprofits are the ones wasting money on payroll etc. They’re top heavy with the leaders doing 9-5 work. Recently created nonprofits are generally led by someone putting in entrepreneur-type hours and inspiring others to do the same. An executive getting paid 10% of revenue at a nonprofit is a travesty to me, but it appears to be the norm in the old school. There’s no way that person can inspire the low-paid foot soldiers.

    • Interesting. 10%! Holy hot damn, I’m in the wrong business!

      But seriously, that’s a good point, and there does seem to be a bootstrapping attitude about younger non-profit outfits that I like, even if they approach problems differently than I would (again, this is a good thing, in my mind).

      Maybe it’s a matter of figuring out how more of these new non-profits can get the prestige it takes to get ‘old money’ invested, so that their methods and ideas can hit the mainstream?

    • Partly agree Matt, but the Director and President of the museum I work at is paid a CEO salary and nonetheless she is a daily inspiration to me.

      Sadly most nonprofits have to pay out executive salary at that level in order to get top-grade leadership. Scroll up a few comments to see what people think of nonprofits “who don’t understand business.” That’s bad leadership.

      If you want an Executive Director with a thorough understanding of business, finance, development, marketing, management, and the issues and programs at stake – you need to pay out at CEO levels, period.

  4. Seth Godin has some good ideas in the communication field and one non-profit doing it well is Charity Water.

    Why?

    Because they show you what they accomplish. Start a newsletter, bring a flip cam when you go help a village, what ever it takes let people tell a story.

    The biz people will love it.

    On the Biz side, teach volunteers how to use money.

    Show them in concret examples of what their action is worth – Example: http://37signals.com/svn/posts/2770-bring-tim-time-is-money-is-a-clock-that

    3 hours in a meeting could be saved to feed 1000 people.

    And let’s save the world together!

    • Charity Water has great branding, and from what I know they’re doing a fantastic job, but I am curious (the curiosity was sparked by one of the non-profit workers I was speaking to in Cambodia, actually) as to how performance balances with branding in a situation like that.

      Does their impact suffer as a result of their building awareness? That is, how much of their effort is being assigned to keeping themselves in the public awareness, when it could be applied to bringing clean water to more people?

      Or does this matter? Is it better to be well-funded and secure for years and able to produce SOMETHING, or to produce the maximum that you’re able while always being concerned over whether or not you’ll be funded the next month?

        • Exactly right. Charity:Water used business principles to succeed in nonprofit where so many fail. If the money is coming in because you communicate your message well, you can spend less time on begging for money and more on spending it.

          They also don’t take any money from fundraising for salaries. All donations go to wells – they work out how to make payroll by partnering with rich benefactors.

          • Just to play devil’s advocate here….. why do you all think Charity Water is such a great NGO? IE – what do you know about the PROGRAMS they support? Are they leaders in the work they do? Or in branding?

            • I like it for a number of reasons.

              1. It was started by a guy who had a hero’s journey experience (my specialized interest) and thus has a clear vision – people’s lives become significantly better with clean drinking water.

              2. Scott Harrison worked out how to build wells cheaper than anyone else and started doing it. So, as far as programs – yeah, they’ve got them. I just got a well built for $5,000 through them. I have heard others raising $20,000 to do the same. More waste.

              3. They haven’t fallen into the trap of looking amateurish which so many NGOs do. This is huge – if you look at a program that looks cheap, you’re going to judge them on that. If they can’t do that properly, what can they do?

              4. They’re not bloated. Charity Navigator does well at cataloging that.sort of thing. I always check them before donating.

              • I don’t know where you get your facts, but I assure you that they don’t build wells “cheaper than anyone”, for two reasons:

                1) They don’t build wells. Their local partners do. Which is good – as they are based in NY and we don’t want a NY marketing org building wells now do we? Their total cost per well is much higher – if you count in their branding/marketing efforts – than it would be for supporting their local partner directly – though I do agree with your next argument – that it takes money to make it

                but more importantly

                3) Wells do NOT have to cost $5000. Actually – you can build wells for as little as a few hundred dollars – and yes, in some places a deep well is needed, around $2000+, and in other cases where that well needs to be MUCH deeper, then it will be more. But no, most wells do NOT cost $20,000 – most cost exponentially less.

                More importantly, wells do NOT provide clean drinking water. They just plain don’t. The water must almost always still be filtered to be “clean”. There has also been studies done which show that clean drinking water at the source has little correlation with water born illnesses. Why? Because if you are putting your water in a contaminated container, drinking out of unclean cups or your hands, storing the water in dirty containers in your home, then it is the cleanliness of the water when it goes into your MOUTH that matters, not what comes out of the well.

                So, the best organizations working in water, in my opinion, are also doing educational work around home water filtration and hygiene. They are spending much less on the well and focusing on in-home filtration options like the ceramic water filters I too use in my home in Cambodia, that cost about $10. And – they are not “giving things away” – they are taking market based approaches to getting those filters out there.

                You can use a $250 shallow well with a rope pump plus the $10 water filter and then use the rest of your $5000 donation to do education around clean water. You can even set up a loan repayment system so all of your money comes back by using some overhead funding for someone to collect the money each month – and while they are collecting the funds they can teach about rope pump repair, toilets and sanitation, in-home water safety, etc. In total, it will cost less than your $5000, the impact will be greater, and the family or community will have paid for all or part of the well – and paying for things is a much better option than giving things away – which I’m assuming you will agree with. People take care of things they pay for.

                An organization I respect here in Cambodia – http://www.rdic.org does that – and THEY do wells much cheaper than most – and their efforts have resulted in much lower rates of water born illness because of that. Why? Because they are NOT trying to focus on “things” – things are easy. Investing time in people – that is usually MUCH cheaper, and much harder – and way less sexy. If an organization “makes aid sexy” at the sake of doing their job less thoroughly, it might raise a lot of funds, but it surely doesn’t make for better impacts.

                Wells do not provide clean water. Mosquito nets do not “save people from malaria”. We need to stop buying into false marketing. Educating PEOPLE does. And it’s much cheaper too. Yes – the “things” are part of that process – but not what makes an organization great. Anyone can give a well away. If you are going to start to talk about ranking which NGOs are DOING good work – then look at what they are DOING, not what they are SELLING.

              • I’m sorry, but Charity Navigator’s ratings are fairly meaningless. Hopefully the 2.0 system they’re currently testing out will be better, but the current system is based on ratios between “program costs” and “admin costs” which are actually far more closely related to accounting practices than to organizational efficiency. See this article I wrote for Huffington Post on the topic. http://www.huffingtonpost.com/saundra-schimmelpfennig/dont-choose-a-charity-bas_1_b_823771.html

            • Branding is often equated with an organization’s effectiveness. In the case of charity:water, they do such a thorough job marketing and branding well that it’s hard to look past it all and be more critical of their work. They’re the Coca Cola of non-profits.

  5. The one thing I have learned from a long time about working with Non-Profits and business people is that they are mutually exclusive. You do not have good business people that work for non-profits, and you rarely have business people with a background in philanthropy.

    As a business, we stopped doing business and work for non-profits. Why? Because they expected everything for free. Granted, we cut our rates 50% to help a non-profit, but even then, they demanded more. It was not at a point where it didn’t make business sense for us, it got to a point where the non-profit “business people” were so unrealistically demanding and expected EVERYTHING for free (I am not exaggerating that fact) that we chose to cut ties with the non-profit.

    Like you said, there is a balance there that needs to be found, one that could possibly be done by the exchange of people. Have a few non-proft people go work at a business, and have a few business people go work at a non-profit. Just an idea.

    • I hear this complaint a lot, and though it’s likely that it’s just SOME non-profits that behave this way with their partners, the fact that it’s such a widely ‘known’ thing is a part of the problem, I would think.

      Exchange programs of a sort would be interesting to see. Anyone know if something like this is going on already? Bringing in non-profit folk to work for a bunsiness for a while, and sending out businessy folk to work for the non-profits? It would probably only work on the larger corporate level, but I would be interested to see what would happen with that kind of crossover. Perhaps the result would be more people who can speak both languages fluently?

      • I agree, but at the same point, where would a business venture like this fit? It would have to be a very specific niche or vertical that aligns itself to working well with non-profits, just is lacking the relationships to do so.

        Interesting concept though.

      • Hello Colin,
        VSO kinda does this type of exchange program. They send business people with a specific set of skills to train and support local staff in various NGOs. This is what I do. My background is business and I now advise my colleagues on how to conduct market assessment for community-based products, and how to implement market-based solutions.

        At the corporate level, Accenture also sends some of their expert to support NGO’s work.

        I don’t know any situation where NGO staff has been sent in a for-profit enterprise to learn.

        Alex (we met at the TedTalk conference)

  6. Taking the liberty of assuming that I am a meaningful percentage of the ‘80%’ of the non-profit workers who ‘crawl’ through Phnom Penh that you met last week, I have the following to respond:

    - Highly effective development work often happens at the grassroots level, via bottom up approaches that are directly and constantly responding to people’s needs, in the places where they live (versus from offices in NYC or London or Hong Kong)

    - This kind of work is often the most under-funded, under-noticed and the people involved the most under-paid

    - The area of the work most under-funded is often in ‘core costs’ – salaries, rent, electricity, internet access, etc.

    - This is because donors want to ‘see where their money is going’ – they want tidy accounting reports that show all the money went directly to those the donor aims to assist – theoretically, the most vulnerable and disadvantaged (ie to building a house they can put their name on)

    - While this assumption can be appreciated, it ignores that there must be professional, experienced, educated people at the helm and in leadership positions, to ensure the money is spent accountably and effectively

    Taking all that into consideration, what should you look for, if you are in said position to give a percentage of your earnings ‘back’? How can you be sure a non-profit is worth your hard earned cash? I suggest the following:

    - Go see the organization first-hand, up close and in the place it works. If you aren’t sure if you can trust, then go visit. Meet the people, see the projects, smell it, hear it, sense it. There’s no better indicator than your ‘gut’. So stop judging from afar, book a flight, and go learn

    - If you can’t visit, then I think some of the most reliable and predictable information you can receive come via financial reports. Independent, internationally-recognized audited accounts, plus budgets and expenditure reports that can be verified, are all good indicators of how an organization conducts itself. Good, although not perfect.

    In closing and on a personal note, you spent the last week amongst myself and some of the people I admire and care about most in the world. I cannot speak for every single person in the ‘crew’, but I can say that most people are doing work that is hybrid non-profit/for-profit. Most of the people you met, believe in the power of market-based solutions to empower the disadvantaged. Most people have filled their Board of Directors with some of the most successful people in business they know, and they are constantly seeking advice and counsel from the private sector.

    Speaking on behalf of this group, I wholeheartedly disagree with you that we think businesspeople are heartless. And I’m not sure how much we enjoy playing at ‘being rugged’, especially when it comes at personal costs to our safety and security. That being said, I do agree with its important for all parties to understand each other’s situations better, and I know the people I work with engage on a daily basis in furthering that effort.

    • Thanks for the thorough response, Allie, and for showing me around PP while I was there!

      I get the impression that perhaps it didn’t come across that I was intentionally bringing up the generalizations many people I’ve met form both camps seem to have about each other, rather than stating my opinion about people from both sides. They’re strong words, for sure, but they are sentiments that I’ve heard over and over (and when they weren’t heard specifically, they were implied).

      I wasn’t speaking about one group or person in particular, or even just the people I met in Cambodia, but a few conversations while there did spark the idea for the post, since the overwhelming sentiment was that everyone had the same goal, but there were still somehow problems despite that. No offense was intended, and I certainly don’t think you guys are playing at anything…everyone I met was very serious about what they were up to, yourself included.

      So that out of the way, it’s a good idea to go visit with the groups you may be interested in funding on the ground where they’re working (to better appreciate the costs), but do you know of any other ways people can check in on the nuts and bolts of a group if they aren’t able to make the trip?

      I ask because the financial reports seem to have the same issues as anything else, in that they show what the money is paying for, but don’t necessarily show the whole picture (changes that can be expected in the long-term, for example). Is there another standard metric to look in on, or a site that assembles relevant information?

      Or, do you think this would be impossible or at least incredibly difficult to do, since non-profits have different goals, management structures, etc?

      • “Do you know of any other ways people can check in on the nuts and bolts of a group if they aren’t able to make the trip?”

        If you can’t go, and you surely can’t go everywhere, and as we can’t always trust financials to tell us the whole story, then ask people who know. Not your friend who read a story about a guy in the New York Times – but someone who lives there and who can see/smell/touch the results and who understands them. So, if you want to support educational programs in Haiti, talk to people who live there or who work in the same sector in a different area as they might know who best to support. In a social media enabled world you can track down people working/living in a place you want to support quite easily or connect with forums and people monitoring or commenting on the topics you are interested in funding.

      • Reading the Annual Report of an organization will often give additional metrics as well as qualitative findings. In addition, they will frequently highlight strategic goals or multi-year plans so you can see where the programs are headed.

    • Wow – sounds like Justin (below) is making some overall judgements based on what sounds like was a very negative personal experience.

      As for the above – I agree with Allie. There is a HUGE movement of “social entrepreneurship” going on all around the world which disproves this idea that there are “business people” and “non-profit people”. Check out socialedge.org or any of the other sites tailoring to social entrepreneurship and you will see how big this discussion is.

      As for the above, Colin, Allie makes a good point about the group of people you met this week in Phnom Penh. You didn’t ask a ton of questions of those of us that you spent time with I don’t think or you would realize that most were not aiming for non-profit answers to the world’s problems. PEPY Tours is a for-profit company using market based solutions to fund educational programs and educate travelers about development issues (in fact, we tackle these same debates and discussions on our tours). Pari, Allie’s company, is also a for-profit company servicing non-profit and social venture work but through a business model. Mel/Justin are working on incubators to kickstart social enterprises, like Soksabike, a for-profit bike tour company bringing revenue to people and communities in a less visited part of Cambodia. Marc is a for-profit consultant. Bryse runs a for-profit engineering company taking on things like rice mill design, infrastructure building and restoration, etc. Brittany is in Cambodia to research and document social enterprises. Yes, some of the people you met work for non-profits, but most of the group (and even those who do) probably agree that market based solutions are a key part of reaching bigger development goals. This was why the group chose people like Chris Noble to speak at TEDx this past weekend to show that there are bridges between for and non-profit work.

      I am glad you are thinking about this and sharing your ideas – but I agree with Allie that the best way to really learn is to get out there and go meet a bunch of these projects, have these types of discussions with the people running them and the communities powering them, and learn through time what works, and what doesn’t. Learning more about development issues would be a really cool addition to your world travels and might help you better answer the questions you are asking yourself: How can we best impact positive changes in the places and people we care about?

      • Hey Daniela!

        Thanks for taking the time to respond!

        It’s good to see things like socialedge.org – that’s the kind of thing I was looking for to find out more.

        And it sounds like I DID miss out on some opportunities to discuss this more while in Cambodia, though unfortunately my throat had other plans most of the time I was there (still had a few discussions, but I talk about my quadrasickness here).

        That being said, there’s still a major disconnect between the two camps, and though the fences are being brought down, I think it’s a bit soon to say that there is no longer a distinction (if only!).

        It sounds like in your social group there are a lot of people working on this problem (which again bums me out that I didn’t realize this sooner), but in the business world as a whole, most of what’s going on is the social effort equivalent of greenwashing…it’s a whole lot of branding, without a lot of substance behind it.

        So my question to you is this: how does someone who isn’t already involved with that world tell the difference?

        It sucks that I didn’t think to ask this when I had you in person, eating that crazy pancake thing you brought to the poolside, but better late than never :)

        • Colin, one of the best ways you can make sure your dollars are going to the kinds of organizations you like is to let them come to you.

          You can do that by starting a foundation.

          You’re in a position where you could set aside x dollars to give in grants each year. You would decide the guidelines – what documentation you need to see, what kinds of causes you fund, how narrow your focus is, and what kind of results you need to see to consider further giving.

          Depending on the level of involvement and control you want, you can create a foundation as its own entity (with an employee who does an initial review of proposals) or create a fund as part of a larger foundation (they will handle most of the work for you). There are numerous other possible structures as well. An accountant should be able to explain all the options in detail.

        • Colin, one of the best ways you can make sure your dollars are going to the kinds of organizations you like is to let them come to you.

          You can do that by starting a foundation.

          You’re in a position where you could set aside x dollars to give in grants each year. You would decide the guidelines – what documentation you need to see, what kinds of causes you fund, how narrow your focus is, and what kind of results you need to see to consider further giving.

          Depending on the level of involvement and control you want, you can create a foundation as its own entity (with an employee who does an initial review of proposals) or create a fund as part of a larger foundation (they will handle most of the work for you). There are numerous other possible structures as well. An accountant should be able to explain all the options in detail.

  7. I agree with Daniela & Allie that tons of people (especially in Cambodia) are using social enterprises to bridge the gap between business and non-profit.

    However, I will completely own up to the fact that I didn’t know what a social business was until I had lived in Cambodia for three months and was at the precipice of founding and running one. Push Pull Cambodia (my biz!) is also a social business.

    So, I completely understand Colin that unless you’re in the thick of it, it can be hard to recognize the organizations that are trying to bridge the gap.

    Part of that comes from branding. From social businesses not clearly outlining the ways in which they have multiple bottom lines.

    I also think there’s a stubbornness in the business + non-profit worlds, where they might not want to recognize a new, hybrid, solution. I am encouraged to see many more young people coming out of university having at least heard about social businesses.

    As we become more aware, I think we’ll be able to ask better questions to distinguish the different models and recognize those that are trying to cross boundaries. Perhaps not as immediate a solution as you would have liked, but definitely a step in the right direction.

  8. Allie makes a point. The Non-Profits which get the money to do the work are the ones who display some form of normalcy in their approach. Grants are given to NonProfits who look sustainable. Grant givers view sustainability as Normal. They don’t have a wide view of standard deviation.

    Colin, have you considered, instead, doing micro-donations to smaller, more grass roots oriented groups rather than bigger ones?

  9. Sounds like you might be interested in for-profit, self-sustaining, social business like Grameen Danone. These organization speak the language of both nonprofit and business. Instead of top down handouts, they engage in bottom up investment. They produce and sell low cost products that improve the lives of people in developing nations. They provide employment, and the raise GDP in developing nations.

    But, if you’re looking donate to a nonprofit, my advice is don’t give your money to any organization that spends less than 80% on their programs. And if you can’t find an organizations financials readily available on their website… Be suspicious.

    Personally, I don’t give to large multi-national organizations with strong ties to government, like the Red Cross, because they are notorious for corruption and waste.

  10. Hi Colin, great discussion you’ve got going. I’ve worked in the ‘not-for-profit’ world in the UK in a funding capacity (for too many years) and now run my own social business consultancy – Profit Is Good Ltd – which is about supporting people who want to set up for-profit business models to create social impact. You asked what standards there are for measuring an organisation’s overall effectiveness wider than financial reporting. Well the UK had been leading in this in terms of the adoption of SROI methodologies – social return on investment http://www.thesroinetwork.org – but investment companies and charitable foundations in the states are now creating ‘IRIS
    Impact Reporting & Investment Standards’ which looks to go far beyond this – info here http://iris.thegiin.org

    Best wishes from UK

    Richard

  11. Pingback: The Dangers of Hero Worshiping (in the Social Sector) | Lessons I Learned

  12. Colin, this is a great post. I read your blog periodically but haven’t commented before. Thanks for the great work!

    I’m interested in seeing how this conversation unfolds and what conclusions you draw on this issue from your travels. I’m experiencing a microcosm of this right now. I’m involved in entrepreneurial activity and business, but am also working on a (pre-launch phase) non-profit with connections to business schools and university faculty.

    So far, many of the non-profits I’m working with are filled with kind, giving, selfless people, but their larger organizations can be surprisingly territorial and cut-throat (all on the same team, right?) and sometimes seem to have distrust of people from business. Conversely, it’s a struggle to get engagement and buy-in from business schools that feel like helping the underprivileged has no place in the business school and teaches no skills of business value. I believe the opposite is true: business students and practitioners can learn a tremendous amount from the nonprofit sector, and nonprofits can benefit from adapting business practices.

    It’s a communication and language issue I’m trying to resolve in my community. Right now my team and I are developing other way to quantify return on investment for non-profits so that businesses can understand their returns in the context of quantified social/alternative value. It’s a challenge and I’d love to hear how other people are approaching this and what methods they (or you) have found effective.

  13. Good post and comments with lots of excellent points on both sides. I have an interesting perspective on this topic, considering that I work for an entrepreneur and we’re starting a non-profit. We have a for-profit company in the construction biz, but my boss a former pro-baseball player, sees an opportunity to give back. We have created a foundation to bring donated sports equipment to underprivileged children across the globe. With that said, we have a trips to Cuba planned in May and December where we’re bringing skateboards and baseball equipment. We see the non-profit as both a good thing, but also as a way to promote our other business ventures. It’s a win-win situation, and I’m excited to see how the whole thing pans out.

    • But this is a classic example of people getting into the aid business that don’t understand aid principles. They do it because they “want to give back” but there’s a real possibility that by handing out all this sporting equipment, you could be hurting local businesses (or at the very least not supporting local businesses) trying to sell the exact same thing. It would be far better to work with them.

      We have got to move away from this current craze of going around the world handing things out for photo ops and tax write-offs, free publicity – and “promoting other business ventures”. This is not about what’s good for us, this has got to be about what’s good for them. And not just in the short term – they’re happy to get free stuff mode. But in the long term, does this hurt or help the local economy perspective.

        • Jeffrey, I’m sorry to say that Saundra is right. As much as I like to see the kind of efforts you’re describing, they don’t have as much of an impact as we hope. Investing in the communities, rather than giving handouts can create lasting change.

          As for “a way to promote our other business ventures”, that’s really disappointing and I hope it’s not a deciding factor in whether you contribute to charities.

          • It’s SO frustrating to hear negative responses. Everyone has their own way of doing things. You obviously don’t like ours, I may not like yours. We are not just giving handouts. That would be an oversimplification of things. We are creating community centers, skateparks, baseball fields, etc. We are not taking away from local businesses simply because the children who get equipment would not be buying it otherwise. We work with local sports stores, we are partnered with other charities. We are going about it right, regardless of what you say or think, and it’s not ONLY ‘a way to promote our other business ventures’. However, it does. This is why I described it as win-win. Remind me never to comment on these types of things.

          • I’m adding a reply to both Matt and Saundra. I am extremely new to this type of thing (on either side). I want to do it right. So…with that said, I’m open to assistance, etc. How do I make it right, do it right, etc. The people doing it have the best intentions, but obviously we don’t want to hurt the local economies, etc (is there a local economy is Cuba? idk). We want to create skateparks, centers, baseball fields. Is there reading material I should pick up, or perhaps you can talk to me on-on-one, etc as I go about doing this? Thanks.

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  15. Hi Colin,

    I’ve worked in the nonprofit sector my entire adult life. I’ve never heard these sentiments expressed so harshly outside of this post.Now, I don’t know who you hung out with in Cambodia. Maybe it’s full of really angry or douchey nonprofit workers. But in general, the nonprofit sector tends to be very conscious of how reliant it is on corporate donations. (There are funding sources that don’t directly rely on businesspeople, such as government funding, individual donors, grassroots membership, and endowments, but corporate dollars are still a significant part of funding overall.)

    Likewise, I talk to CEOs and VPs every week about funding, and they do not view us as beggars. Some choose not to fund my particular cause, and some view it only as a business transaction (donate money, get good press). But they all seem to “get” the basics of why giving is important and how nonprofits work.

    In a similar vein, I’m confused about your gripes with NGO workers. They live overseas and act rugged? Like… an exile lifestyle? ;) Nonprofit workers are entitled to a living wage like anyone else. If they choose to spend it on drinking, picking up locals and taking hiking trips, cool.

    All of this left me wondering what lens you saw this interaction through. To be honest, the post reads like venting because you don’t like the way nonprofits work. Just because none of the NGO workers took your suggestions doesn’t mean there’s a communication problem – it may just mean you don’t know much about nonprofits.

    • Hey Drew-

      If you take a look around through the comments, you’ll find a bunch of people who feel the same way, and of course, that may just mean I missed the mark on writing this completely, because it certainly wasn’t my intention to attack anybody, just to relate an experience as it came across to me.

      And that was the point, that – to me, someone who comes from one sector – completely missed out on some things that may have been glaringly obvious (you’ll see some of what I mean in the comments) to someone from another sector (in this case, non-profits and NGOs), which to me means that there could be better communication.

      The fact that I don’t know much about non-profits, as someone who WANTS to know about non-profits, says something. Now, it could just mean that I’m an idiot, but I’m sure you can forgive me for wanting to assume that’s not the case and going instead with the concept that the information may be readily available, but not to a segment of society that could lead to better interactions between those who are earning money (business folk) and those who are intelligently spending it (the non-profit and NGO scene).

      • Hi Colin, thanks for the reply. And I should say too, because I didn’t
        earlier and it needs saying – it’s terrific that you have an interest in
        learning more about nonprofits and how they work. I wish more people did. That
        rocks.

        Something that occurred to me, as I gave this more thought, is that I suspect
        most of the NGO workers you met in Cambodia were program staff, i.e., the staff
        who work on the ground or in the field or run the programs that help people. I
        love all of my program staff friends, but I think they would be the first to
        admit they aren’t the best point-people for prospective funders (such as
        yourself) to talk to. They are the ones with the least training on addressing
        donors’ concerns and they are the least likely to understand the business side
        of things.

        You can kind of see this from the sorts of responses you’ve gotten – people
        saying “you can’t quantify or measure what we do.” Sure you can, and people on
        the development and executive management side routinely do. We *have to* because
        it’s the only way to convince prospective funders like yourself that we’re worth
        funding. I have to quantify and measure the happy looks on schoolchildrens’
        faces about three times a week.

        Similarly, a few people have said that the best way to see if a nonprofit is
        worth supporting is to get on the ground and see the work it does. That might be
        fine if it’s a hospital or tree-planting organization in your home city, but
        it’s not practical for most international nonprofits. Donors don’t need to buy a
        bunch of plane tickets to make an informed decision. (In fact, I’d rather they
        just take all the money they would’ve spent on plane tickets and donate that to
        a different charity, than waste it in order to choose mine.) Generally the
        annual report will contain much of what you need to know, and then follow up
        with savvy questions to the development office or director. If there is
        something super important that donors need to see in Ethiopia, they will have a
        video of it for you. You don’t need to fly there and see it yourself.

        So, long story short, I think the type of answers you’ve gotten may be skewed
        by the role of the people you’ve talked to.

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