Think Philanthropically

There are a variety of misconceptions and misunderstandings about non-profit organizations.  When they are repeated often they can feel like the truth. For example, one of the prevailing myths is that any individual with a strong set of convictions can start up and run a non-profit.  The truth is that it takes a lot more that a heart for a cause or a profound sense of duty to lead and operate a non-profit that will become effective and impactful.

Many non-profits have been started by people who felt that something ought to be done to respond to a particular need.  However, this sense of calling, on its own, is never enough.  Non-profits that are solution-focused are almost always guided by a well organized team of skilled professionals. Good intentions or caring people do not automatically produce good outcomes.  Managing a not for profit organization in today’s complex environment is challenging, and it requires seasoned leadership skills and diverse competencies.

“Every person, every citizen deserves our best
– not our second best.”

Another prevailing myth that persists, even though it has been repeatedly debunked, it the “overhead myth”.  This is the concept that only a very small percentage of a non-profit organization’s revenues should be used for marketing, fundraising and administration.  Many people, without the benefit of adequate information, believe that a low overhead means that the non-profit organization is more efficient. The reality is that many non-profit organizations need overhead and infrastructure in order to deliver services.  The non-profit sector is no different from the for-profit sector in many respects.  There is a need for capital equipment, well-trained staff and properly maintained facilities.

“Funds do not drift in magically on a cloud.
Well-calibrated fundraising, publicity
and marketing efforts are essential.” 

Furthermore, most non-profits need to spend money to raise funds to pay for some or all of their operations.  Funds do not drift in magically on a cloud.  Well-calibrated fundraising, publicity and marketing efforts are essential.  To provide a bit of balance, the overall infrastructure costs and fundraising investments of a non-profit should be reasonable. If an organization spends 75% of its revenues on fundraising and executive salaries, it should raise eyebrows.  That said, trying to compare one organization that invests 14% in overhead costs against another that invests 20% is an extremely unwise way to evaluate their comparative effectiveness.  To begin with, there are many differences in way that services are delivered, even between seemingly similar organizations.  There are plenty of examples of well run non-profits that invest significantly in overhead in order to deliver exceptional results and undeniable social impact.

The “overhead myth” is often affiliated with the “poverty myth” in the non-profit world.  Those who subscribe to this myth expect non-profit organizations to accept that they are incapable of being excellent.  While nobody would say it out loud, this myth includes the notion that a non-profit is something less valuable to society than a for-profit organization.  The “poverty myth” presumes that people should accept that non-profits ought to remain in a cycle of revenue starvation, never knowing where the next dollar is coming from and operate with antiquated equipment and in suboptimal premises.  Many non-profits in Montreal respond to unmet social or medical needs.  They act as the social safety net underneath the regular social safety net.  The citizens served are often disconnected or disadvantaged.  Every person, every citizen deserves our best – not our second best.  The truth is that well equipped, well trained, well financed and well led non-profit organizations are an increasingly critical part of the ecosystem of social services in our city.  I encourage readers to confront these myths and, as we frequently say, continue to be joyfully generous in supporting the efforts of our local non-profit community.

Sam Watts serves as the CEO of Welcome Hall Mission  He serves on several non-profit boards and is an appointed member of the National Housing Council of Canada.  He is the author of Good Work…Done Better

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