In search of justification

Reading Ken Burnett’s post on reciprocity left me, as most discussion on the subject do, with an awkward feeling about how this very familiar issue keeps popping up. I can’t say I answered requests for my services as eloquently as Ken did, but his examples bring back names and faces who, from their point of view, were honestly convinced that they deserved a free lunch.

Where Ken’s piece left me feeling sympathetic to the situation of the service provider facing a charity, Amanda’s comment (bless you, Amanda) pointed out the deeper reasoning which leads charities to presume their particular lunch ticket is well deserved. I think there are ways to counter the arguments, not just for the sake of the issue at hand, but as an opportunity to educate nonprofit managers on how to manage, budget and justify costs.

I hope you will find some of my pre-canned rebuttals useful. Oh by the way, these also do wonders for fundraisers  who have to convince their management that sometimes, money does need to be spent.

#1. Charity : it’s a motivation, not an occupation

I really wish organisations would stop calling themselves charities. The true caritas is the reason why we give, the organisation is the instrument which enables us donors to change the world and address the cause we feel to be important. I once visited a French nonprofit whose secretary-general showed me round the dilapidated apartment they used for an office, proudly stating that ‘this was evidence they were poor’ (and hence honest and worthy of my attention). Unfortunately for her, I spent the morning at another nonprofit whose aim is to eradicate poverty, which they regard as a fundamental injustice, so I asked her if poverty was a virtue or an injustice. I’m still waiting for her answer …

Nonprofits should not assimilate with the beneficiary to justify the donation, but act as the most sensible instrument or channel enabling a donor to help the beneficiary. Being as poor, as ignorant, as helpless or as unjustly treated do not strike me as qualities a donor would look for in a partner, do they?

#2. If you think you need this service, you just defined the budget

‘We have no budget for that’ aka. ‘we have no money‘ aka. ‘all of our donations go to the cause, nothing is wasted on overhead’. I was brought up to understand that if you had no money to buy things, you simply did not buy them. I can understand the pressure on keeping costs minimal, which is after all an ethical and economical principle that ALL organisations should honour. But seriously ? ‘We have no money‘ ? Throw in ‘we are all volunteers here’, and ‘our donors would not understand if we paid for those services’ … it’s a guilt trip disguised as a sound managerial decision, while it’s just poor management.

If a service, say a subscription to an online emailing platform, is crucial in spreading your message to new and existing donors, the cost can be justified. Perhaps the problem is in that last word – justification. If you as a nonprofit manager cannot justify spending that expense to yourself, I can understand you would not want to face a donor. I also don’t understand why you choose to manage a professional nonprofit.

#3. Your donors are not stupid

Ah, the many times I heard that ‘donors would never accept it if we spent money on …’. However, I have yet to see the first piece of evidence of that universally accepted truth. Organisations generally report percentage of overhead cost to income in their annual reports. They routinely accept co-financing clauses in government or institutional grants. Yet the individual donor is depicted as requiring a certificate that the bank note he or she sends to you is fully, correctly and instantly delivered to the beneficiary. Would it be because this assumption is genetically determined in the human species, or because nonprofits set that expectation, if it really exists at all?

I think this goes back to justification. I have met people who were genuinely embarrassed and ashamed to admit not spending 100% of the money they received from donors on the actual beneficiaries. No wonder they have a hard time justifying salaries, rent, power bills, marketing costs and advisors. They are projecting their inability to justify costs onto their donors, and guess what — it attracts the donors who agree that these costs are excessive (read: non-zero).

Don’t pretend costs do not exist. Budget them wisely, and if by chance you get a substantial break on some cost, keep including the equivalent cost in your budget and mark the exemption as goodwill. The day will come when your volunteer is gone, your sponsor has a bad year, and you’ll be scrambling for the money. Not planning for that doesn’t sound like a good management decision, does it ?

#4. Our donors give out of pure charity

This is a hard one to counter. Not because it is irrefutably true, but because it is based on belief, which is not the soundest management foundation. I usually refer to the reciprocity Ken mentions. I argue that every individual donor or volunteer contributes because they feel there is value in it for them. Not financial value, but the feeling to belong to a group, to matter in this world, to change something, to fight for a cause, to make larger things better by adding a modest effort to an efficient organisation. There is always a quid pro quo. And that is not a bad, dishonorable or unethical thin : it’s the way things are.  Marketing is based on the assumption you can motivate an individual to do something by highlighting the benefit for them, and it is the foundation of nonprofit communications and fundraising.

Show me a nonprofit which really maintains that they deserve to be helped for the simple fact that they are honest, hard-working and dedicated to a just cause, and I will show you a badly structured, short-term-focused and long-term-inefficient partner for a donor who wants to address that cause.

All this being said, it never stops me from asking each and every service provider and supplier if they don’t want to support us with a donation, a discount, a freebie or some other form of support. But since I assume the answer will be no, and I ask it with a jest, I’m never disappointed. Try it!