Chicken Hits the Fan

The world is a tough place these days for nonprofits.  Not exactly a news flash.  But I’m just returning from vacation, where I tried hard to concentrate on the waterfront, books that never used the word “nonprofit”, my tennis game, and, yes, forgetting.  Now, I’m back and playing catch up with, among other things, my reading.  And it feels so perilous out there that I’m reminded of a words from “Blood in the Water” (from Legally Blonde), describing to first year law students what makes for a successful lawyer:

Only spineless snobs
Will quarrel with the morally dubious jobs
Yes, blood in the water
Your scruples are a flaw

Scruples, you say.

Just before I headed out of town, I read that the Care and Share Food Bank for Southern Colorado had just discovered that one of its partners wasn’t all that it thought it was.  Seems its scruples and those of its collaborator weren’t aligned.  In an attempt to increase its donations over the summer months, Care and Share Food Bank holds an annual summer food drive in cooperation with local grocery stores and other businesses.  Bring in cans of food to a business and get something in return.  In the case of Chick-fil-A, bring in two cans of food for the food bank and you get a free chicken sandwich.

Sounds like a good deal for everyone.  In years past, it was: the food bank got badly needed donations and Chick-fil-A, and the other businesses, got good press and customers.  That was before Chick-fil-A’s CEO’s pronouncements that his company supports only “traditional” marriage went public.  In the aftermath, the chicken hit the fans:  critics accused the food bank of making a poor choice in its collaborator, while others seized the opportunity to support Chick-fil-A and oppose non-traditional marriages.

Choosing a partner is not a once and done deal when you are a nonprofit.  Just because a partner was a good fit last year, doesn’t mean it’s true this year.   While many nonprofits have gift acceptance policies spelling out what types of gifts they will accept (cash, stocks, bonds, real property) and from whom they will/will not accept a direct gift, not many seem to have policies that address with whom they will collaborate on things beyond mission delivery.  As more and more things become lightening rods for controversy, the need to really understand your bedfellows as they are at this moment,  is crucial.  Failure to do so makes you tomorrow’s ruckus and diverts you from your intended path.

Speaking of diverting from intended paths, I no longer know what path the various United Ways are pursuing.  Succumbing to the myth that larger is better, last week the United Way of the National Capital Area  announced that it was changing its funding strategy:  if a nonprofit raises less than $50,000 annually, it is likely to lose its United Way funding.

Apparently, United Way believes two things:  that an organization’s ability to raise money is tied to its ability to make a positive impact and that larger organizations, by virtue of their size, are better at producing a positive impact.  If ever there was faulty logic, there it is!  I get that by many people’s standards, $50,000 isn’t very much, and that if you can’t raise that much how are you surviving?  Should you really even be in existence?  I also get that just because an organization can raise $500,000 or $5,000,000 does mean that the organization is doing a good job, having a positive impact, delivering on its promises.   I also get that many of today’s larger organizations did not start out raising $50,000 annually.  And I also get that some organizations don’t want to grow beyond raising under $50,000.  While having sustainable business models for the work that we do is important, it shouldn’t be the size of the infrastructure that matters but the impact of the work.

Finally, too many municipalities are also interested in the size of your infrastructure.  What started as a here and there in the second year of the recession seems to have become a business almost as normal practice as municipalities regularly smell blood—or at least dollars—in the offices of nonprofits.  I’ve written before about PILOTS (payment in lieu of taxes) and governments stepping up the pressure on nonprofits to pay up, getting creative about taxing hospital and/or dormitory beds, and other things.  Lawrence Township (NJ) has now asked all of its nonprofits to pay 25% of what they would pay if they were paying “real” taxes.

It’s a voluntary program, not a legal mandate that could net the township $625,000 (25% of the taxes that would be paid were nonprofit-owned properties assessed as everyone else).  Scranton (PA) is approaching seven nonprofits with a personal appeal to pay their PILOTS, hoping to meet their 2015 PILOT goal of $2 million, despite only having received $200,000 last year.  While I understand and appreciate the principle here, the logic of seeking to save one sinking organization on the backs of others defies me.  If you are talking about nonprofits, it would be nigh impossible not to understand the current reality of most nonprofits:  surplus funds are not floating around begging to be spent—at least no more than in the case of governments.  Play this scenario out:  governments do better, nonprofits do worse, and services decline, and governments have to pick up the slack.  Oh, wait!  Isn’t that why we have nonprofits in the first place?

Go away for a week and you come back to a scarier world.