For many years, I led a nonprofit consulting team focused on improving the financial health of nonprofits, and we often had more work than we had staff to meet. After one particularly brutal stretch of multiple sixty-hour work weeks, we were stressed and burnt out. In an attempt to lighten the mood, a colleague remarked that she was talking with a friend of hers who was completing her medical residency. And in comparing stories, her friend said, “well at least no one dies if you mess up.” Given that we worked as consultants and not on the “front lines,” she technically had a point.
But from a broader perspective, the idea that “well at least no one dies if you mess up” is fundamentally not true. It may not be as immediate as on the surgical table, but when we as a sector fail, there are consequences. Victims of domestic violence are turned away from shelters, children go hungry and environmental degradation continues unabated.
One of the reasons that nonprofits, especially health and human service organizations, turn away people is that there is a persistent myth that somehow and for some unknown reason nonprofits don’t need profits, that they don’t need to pay their people, invest in systems, or put money aside for the future.
And this archaic, unproven and inherently illogical myth is a direct consequence of the culture of scarcity that has plagued the sector for decades. Nonprofits are afraid of losing funding, program officers are afraid of looking foolish, donors are afraid of wasting their money, boards are afraid of being seen as ineffective. So, they all cling to a set of practices and myths that are supposed to demonstrate effectiveness but in reality, result in less funding, wasted money, fewer people being served, and a weakened social sector.
If the real reason why people are being denied services, if the real reason why people are dying, is because we as a sector have failed to break out of this scarcity mindset, that is morally unacceptable.
And we all play a part in perpetuating this Culture of Scarcity:
Nonprofit leaders don’t advocate for what they really need to deliver quality services and instead train donors to expect more programs for fewer dollars; foundation leaders and individual donors continue to focus only on programs and view indirect costs and profits as something unnecessary and unrelated to mission; and watchdog groups continue to promote low overhead as an indicator of a nonprofit’s success or quality as an investment.
The reality is that nonprofits can be profitable and they can be sustainable all while delivering real impact. But we will not get there with the same scarcity mindset that promotes organizations spending 95 cents out of every dollar on programs – all while starving the organization and its necessary infrastructure. We will not get there if we continue to act as victims and believe there is nothing we can do about it.
Our role as social sector leaders and board members is to ensure that people continue to have access to the programs and services that are essential to creating a more just, equitable and sustainable world. To truly lead, we need to shift from a scarcity mindset that starts from a position of weakness and insignificance, to one that starts from a position of opportunity and strength.
We must shift our thinking from a mindset that apologizes for the burden of asking for money to a mindset that offers investment opportunities to donors and funders;
From a mindset that tolerates unproductive boards to one that seizes the opportunity to grow the skills and networks they need to succeed;
From a mindset that exploits sweat equity to make ends meet to one that invests in its people, systems and infrastructure; and
From a mindset where funders and donors view each other as “them” to one where funders and nonprofits are equal partners in the social change work.
We need to change how we think. We must embrace a sustainability mindset, an impact mindset, and unleash the potential of social sector organizations to ensure that no one is ever denied access to a safe shelter or a warm meal or medical care or a hand up the ladder of economic opportunity. We must own our possibilities and our vision of a more just and equitable world.
