Buddy, can you spare…?

In reviewing documents at the behest of a reporter recently, I saw something I’d never seen before:  a letter from a nonprofit to the Attorney General of Pennsylvania requesting an exemption from doing an audit because the cost of such audit was more than what the organization could afford and could it instead do a compilation or review.  This organization, with contributions exceeding the state requirement for an audit, could well afford the cost.   But it chose to cry poor.  The then Attorney General approved the exemption, requesting only a compilation, and saying it was a one-time exemption.

I had three reactions.  First, upon reading the request letter I was appalled, astounded and disgusted, in that order.  Second, in reading the request granted letter, I was appalled, astounded and disgusted, again in that order.  And, third, I was amazed that this was the first time I was seeing such a request.  Why wasn’t every nonprofit seeking out this one time exemption?  (Perhaps this blog will cause such a run on offices of Attorneys General around the country?)

Why was I appalled, astounded and disgusted?  Because I am tired beyond belief of nonprofits choosing the easy—and too often false—route of crying poor instead of stepping up and bearing their responsibilities.  How do you expect to command any respect when all you do is cry poor?  How will you gain the respect of staff, board members, volunteers—and, yes, donors—when all you do is take every opportunity to say, “Woe is us!  We are a poor nonprofit!  Please give us breaks!”

The thing that really fueled my reaction to this one nonprofit’s request was it was bringing in almost $500,000 in revenue—just from bingo!  At least that is what their 990s have indicated for at least the past 10 years.   When a for-profit business or individual says to the government, “I know that paying taxes is a requirement of all of us lucky enough to earn an income, but I am quite poor this year and am requesting a one-time exemption from paying my taxes.  And I don’t want to pay penalties, either,” what happens?  The exemption isn’t granted.  Why?  Because when those businesses started and when those individuals joined the workforce and/or invested money, they all understood that there were certain obligations, actually, that came along with selling goods and services to others and earning and making money for oneself.  And these obligations were not optional, to be fulfilled when felt like; they were—and are—mandatory, year after year after year.

Nonprofits are no exception.  We, too, have obligations.  Obligations to our mission.  Obligations to our clients.  Obligations to our donors.  Obligations to abide by government laws and regulations.  Obligations to make sure we have sufficient funds to fulfill the mission and run the business.  And these obligations hold, year after year after year.  Thus, for example, just because a nonprofit got lucky this year and had the plowing of the parking lot donated this year doesn’t mean it shouldn’t be budgeting for the plowing next year.  It will snow; plowing the parking lot is a non-negotiable cost of doing business and that bill will need to be paid.  It is part of the true cost of running that nonprofit business.

Others, however, are not obligated to us.  The plowing company is not obligated to continuously donate its services, despite our obligation to have the lot plowed when it snows.  Others are not obligated to listen to those who deprecate themselves and the sector by trying to weasel out of these obligations with the “Woe is us” spiel.   No one is obligated to give you things for free, or less than the going rate, simply because you are a nonprofit.  Merely asking for such special treatment disparages all those nonprofits that do the good work they do all the while fulfilling their obligations in a mature, responsible manner.

There are certain costs of doing business and nonprofits that wish to be viewed as serious, credible organizations doing good work must be willing to pay those costs.  Cost one:  follow the rules and regulations and don’t look for loopholes and circumventions.  There is actually quite a deal of irony in my opening example of shirking responsibility.

Successful nonprofits recognize that transparency is crucially important in general; financial transparency, in particular, is especially important.  And, yet, here is an organization that would rather cry poor and settle for less information and less “rigorous” financial information than pay for what the Commonwealth requires while also simultaneously providing more and more rigorous financial data.  Really builds one’s faith and confidence in the goodness of this organization, the quality of the leadership, etc.

Cost two:  pay employees livable, competitive wages.  I’ve beat this drum so many times before, it is hard to figure out what more to say.  Very few people anymore can afford to work at a nonprofit simply for the love of the mission; no one deserves to do the work that is required of nonprofit employees simply out of love of the mission.  Nonprofits simply must pay appropriately or not hire.  It is how business is done.

Cost three:  paying to do the job right and well.  No you can’t do quality strategic planning in four or five hours for under $1000.  (A true expectation brought to us by a wanna-be client).  Good strategic planning is a process—and from many vantage points the more valuable of the two, process and actual plan; short changing that process short changes the plan which, in turn, short changes the mission, big time, clients, employees, donors, etc.  And, no, you can’t teach a board its roles and responsibilities in 45 minutes even though that is all you want to pay and all the board is willing to invest.  Good, strong businesses invest in themselves and their futures, and pay to do so.  Again, just a simple cost of business for which all good businesses budget.

It should be obvious:  crying poor doesn’t make a nonprofit look investment-worthy or sustainable; rather, it makes it look like a business to avoid.  Grow up nonprofits: recognize your business side and take responsibility.