All Costs Considered

Earlier this week, NPR’s All Things Considered did an interesting story on criminals being charged for court costs and for a public defender.  Surprising  – yes and no.

Jurisdiction after jurisdiction has been looking every previously untapped income source in order to help pay the bills.  If they have already passed legislation allowing the taxation of nonprofit profits, why not start charging criminals for the system the state set up to determine their guilt or innocence?

The Fifth, Sixth and Fourteenth Amendments  convey our nation’s presumption of innocence and that it is a state’s responsibility to prove guilt, rather than the accused to prove her/his innocence.  If the state is charged with proving guilt, why should an accused have to pay for the process?  The Sixth Amendment also guarantees the right to an attorney at every stage of an accused’s journey through the criminal justice system and, overtime, those unable to afford to pay for an attorney were also given the right to a state-paid attorney.

Hence the creation of state supported Legal Aid/Community Legal Services departments.  Like prosecutors, the lawyers that represent for free those accused of a crime, too, are state employees.  Well, apparently they used to be free; now, 43 states and the District of Columbia are charging for them, too.  (Granted, the fee is much lower than would be for a private attorney, but there is a fee nonetheless.)  And, if the state wins, and an accused is found guilty in one of 41 states, s/he could be charged room and board while in jail, or in 44 states possibly be charged for having a probation or parole officer, or pay for fulfilling the punishment of being part of a cleanup crew.

As a former criminologist, this story immediately caught my attention.  But to my great amusement, as I was listening to the story, all I was thinking about were nonprofits who expect everything to be given to them for free.  Our criminal justice system does entitle those accused of a crime to certain promises that, until recently, were free to access.  Nonprofits, on the other hand, have never been promised anything for free, yet many feel entitled to receive just about anything for free.  It is a common assumption that the services of The Nonprofit Center are free, and our fees, although quite a bargain, are often met with indignance.

Certainly we aren’t the only organization — not even the only nonprofit – that charges nonprofits for its services.  And we aren’t the only ones who get the surprised response at learning that a nonprofit would actually have to pay for something—advice, office space, equipment, consultants, etc.  But I can only speak for us and why we dare to ask nonprofits to pay.

1. Like every other nonprofit, we are a business.  Businesses – for-profit, nonprofit and government – that wish to stay in business understand that it costs money to do business.  That money generally comes from charging for the service or product, investors/donors, taxes, etc.  Depending upon the product/service of the business, more or fewer of these options are available; not having at least one of those isn’t a scenario for survival.  You must understand your market to know which sources of income are available and work with what you have.  There are, for sure, occasions when businesses give something away for free – but as a marketing tactic:  get this for free, like it so much that going forward you will buy it.  We’ve been known to do things for free for the exact same reason.  But doing things for free as an on-going business model will lead to our demise.
2. While our product—capacity building—is valued by our sector, sadly, funders aren’t storming our doors to offer us funds to help other nonprofits become stronger and use their raised dollars to maximum value.   Just as funders want nonprofits to provide data showing the impact of the work they fund but aren’t willing to pay for it, so too they want nonprofit to access capacity building consultants but they, the funders, don’t want to pay for it.  Thus, to continue to be able to provide our sought after services, we charge.
3. We believe in practicing what we preach:  sustainable business models for every program/service provided if you want to continue to be able to provide.  Because of our current environment, charging is our primary option.
4. After more than three decades in this business, we understand the sad veracity of the need to have some skin in the game.  We, as a society, value things more the more they cost.  In other words, free isn’t valued over the long haul.
5. We charge everyone—from 13% of our costs to 100% of our costs based on an organization’s ability to pay—so that we can provide everyone with quality services and products.  We believe that nonprofits deserve experts to help them build their capacity, people who not only are authorities in their field but who also understand the idiosyncrasies of the nonprofit sector, those who have made their careers in the sector.  Like our clients, we don’t want to provide fly-by-night help, but only pure quality.  For that we charge.

Perhaps alleged criminals have a right to feel entitled to a free trial with free representation and free punishment if found guilty.  But nonprofits never should have developed such a sense of entitlement.  Nowhere in the quid pro quo equation of work on behalf of the public good and get concessions is there “others should do and give you things for free.”  It is time to lose the “we are nonprofit, we are poor, we should not be expected to pay our way” mentality and start owning our business.  That is the path to sustainability.