“A vicious cycle is leaving nonprofits so hungry for decent infrastructure that they can barely function as organizations—let alone serve their beneficiaries. The cycle starts with funders’ unrealistic expectations about how much running a nonprofit costs, and results in nonprofits’ misrepresenting their costs while skimping on vital systems—acts that feed funders’ skewed beliefs”.

I found this article, titled “The Non Profit Starvation Cycle” – Sanford Social Innovation Review on the Ontario Non Profit Network Site.

What an eye opening and revealing paper. The research report is called, Nonprofit Overhead Cost Study, a five year research project conducted by the Urban Institute’s National Center for Charitable Statistics and the Center on Philanthropy at Indiana University.

The article provoked quite a reaction in me. I’ve worked as a senior manager in the non profit sector for quite a few years and felt those starvation pangs on a regular basis.

In my role as a consultant, I help organizations with their online communication and web site strategies. The impact of this starvation cycly phenomenon still affects me as I’m discovering that for many local non profits, finding budgets for creating an effective web site that engages their stakeholders is luxury they can’t afford.

In this U.S. based report,  I recognize many correlations to my experience in Canada. The article describes the elephant in the room. Another name for the elephant is funder expectations. The article contends that this elephant is the leading contributor to the non profit starvation cycle. The advice to grantees was especially useful as this portion of the report pointed the way out of this “low pay, make do, and do without” culture.

The non profit starvation cycle has being around so long, I think it’s become the norm. It seems to me that non profits have quietly accepted the way things work in the funding process. Their conditioned approach is to continue juggling the mix of different funders, squeezing a portion of overhead from each one and keep on organizing special funding drives or in kind donations to cover admin shortfalls. I’ve seen this year in, year out cycle wear out very talented managers, direct service staff and volunteers. It’s no wonder that it is getting more difficult each year to find candidates willing to step into the shoes of departing staff.

I would like to believe that there is a rising tide both in the non profit and funding sector that is turning this dysfunctional Titanic called “funder expectations” around. The rate of change is going much to slow for my liking. When non profit groups across the country are reporting record increases (often over 25%) in service usage (that’s food, beds, crisis services etc.). More than ever, the non profit sector is asked to meet these challenges. I feel that we can’t afford to continue perpetuating this dysfunctional practice.

The Ontario Nonprofit Network (ONN) is a network of networks that helps to build communication and coordination amongst nonprofit organizations working for the public benefit in Ontario. They are doing some outstanding work across Ontario. It was nice to see the Twitter tab but I couldn’t find an RSS feed anywhere.

I’m interested in hearing what my colleagues and fellow collaborators in York Region feel about this study. Did it provoke you as much as it did me.