Are nonprofits only “Safety Nets?” More on Passion & Purpose
I’m continuing to digest the report Passion & Purpose issued this month by The Boston Foundation – the report analyzes the financial health of nonprofits in Massachusetts and makes a series of recommendations for the sector.
As I mentioned in my first post, the report lumps all nonprofits with budgets above $250,000 and below $50 million into one category that the authors call “Safety Nets.”
I have a very hard time reducing the performing arts, historical societies, art museums, conservation, environmental education, youth development, international development, philanthropy, peace and justice, women’s rights, and civil rights, to name a few, to the descriptor “Safety Net.” To me, this characterization grossly diminishes the societal benefit that these types of organizations provide.
While the report defines “safety net” to include the “quality of life” enhancing contributions of this group, the shorthand of “safety net” for this category obliterates the enormous community building and life enhancing contributions of this sector. Not only that, but when we think about the safety net, we usually assume that the word applies to emergency services applicable only to the most vulnerable among us and thus doesn’t touch the daily lives of the rest of us…
While many of the social service organizations in this category (homeless shelters, food banks, group homes, immigrant and refugee agencies, etc) do provide a societal safety net, many do not limit their vision to simply “rescuing” the most in need as the name implies. Thank goodness that so many of these organizations see their work as helping to aid and give voice to the value and contributions that those living on the margin can and do add to our society.
It will be a sorry day if this term comes into common use to describe a sector that is so vast and so essential to the fabric of all of our lives.
This is copied from my reply to your comment on my blog at http://www.nonprofitsassistancefund.org/blog:
I’ve been remiss in not responding to this meaty comment and the further posts on the topic on Gayle’s blog. I think that you have to keep in mind that the study was designed to be a financial study – so the finding are financial in nature. While the words used for the three categories may be inelegant, I don’t think anyone can disagree that it’s important to make a distinction between the financial characteristics of different sized organizations. Lumping all nonprofit organizations together causes too many problems that we can see on any of the “rating” or standard setting sites. I will agree that the range of $250,000 to $50 million for “safety net” organizations is pretty absurd. While the MISSION is indeed the most important factor in understanding any nonprofit, I think that the author’s greatest contribution is their case for the need to create new ways for service providing nonprofits to receive adequate revenue from government contracts and contributions to actually survive for the future. Yes, nonprofits have survived despite the shakiness of their finances, but frankly that shakiness is turning to thinner and thinner ice BECAUSE of the increased demands made by sources of funding. At some point enough has got to be enough.
Kate, Thank you for your reply. I’ve cross posted on your blog.
I agree completely with you and the report authors that the reworking of government funding is essential and that a number of the authors’ recommendations are sound. And while I do think that it is helpful to understand nonprofit financial structures (e.g. I am a big fan of the work that the Nonprofit Finance Fund has done to help explain the differences in nonprofit vs for-profit financial structure), I still think that this report has implications that are much, much larger than a look at the finances of nonprofit organizations.
I really do challenge the assumption on its face that financial health and/or organizational stability are related to budget size. Any size organization can be healthy financially, or shaky financially, regardless of how big or small they are. The authors validate this themselves by pointing to the financial conditions of many hospitals.
But the major concern that I have is that the report is based on a scarcity mentality (too few resources) and asks these questions:
ìCan the sector support this proliferation in small and very small nonprofits?î
ìCan our nonprofit organizations sustain their public purpose responsibility with their current financial practices?î
They might just have well asked:
Can the sector sustain the vast overconsumption of philanthropic support by a very few mega institutions that act like for-profit businesses?
Could this sector be better served by a redistribution of philanthropy?
How much is enough?
How do we assess the return on investment in societal impact? Where do we get the largest societal impact for our investments? Should we invest more in those organizations?