The Money Dilemma Part One

I had a successful day. I helped people and I learned from people. I gave and I took. At the end of this, I'm happy, I feel good. Because I have done good. The ethical part was giving my time and intelligence to helping in the effort to reach out to underserved communities here in Seattle. The smart thing I did was to listen to people who study dilemmas. The way to resolve a dilemma is to acknowledge that all sides believe they are right and that not every side can win satisfaction. Wisdom, but not an easy formula. In fact, not a formula at all but a way of life.

On a more quanitifiable issue, we discussed money. Where does it come from if you're a non-profit and do you mind if it comes from a tainted source, a source whose activities may conflict with your mission, or whose agenda is to co-opt your good reputation in the community to win absolution? No easy solution here, either. From one side you have the view that all money is good and in the current atmosphere non-profits are businesses looking for investors and investors have a right to expect something back for their giving. From another side all money is tainted, but over time through good works those who are tainted by it gain absolution. Anyway, these days we tend to have short memories. Still another side sees that a corporation giving money wants to impress the community and its stockholders that it is doing good, and the non-profit is a vehicle to that end. What's wrong with that? There may be a little bit of extortion at work here: you will support me in my agenda, or I will cut off the funds you so badly need to survive and do your good work.

I will save for another time writing about the perennial issue of working on contingency. Should professional fundraisers (and grantwriters) work on contingency, in other words for a percentage of the take? Most professional organizations say no because #1 it is unfair to the fundraiser who may never see sufficient compensation for his/her labor and #2 the contingency worker may try to lead the employer - the non-profit - into grants they are not prepared to manage. The latter means, for instance, that a grant worth $10 million, offered by the US Department of Labor, is a very attractive target for a fundraiser getting 10%. But...the grant is too large for the organization, which would have to staff up 500%, hire an accounting and HR staff, get new offices, hire a board, and so on, just to manage the grant. It could end up costing more that it's worth, and it may end up being the end for the non-profit. It's happened - more often than you might think. So I stay away from contingency jobs because they're unfair to everybody.

That's not the end of the ethics and money subject. I'll come back to it often. Because my business is the non-profit business, the 6th largest economy in the country, and it's rife with dilemmas.

Need and Budget

I just updated my FAQ and in it I remarked on the value of a budget analysis based on need. Need is a major issue in grant writing. To establish need doesn't mean showing that the project needs money. Of course it does, otherwise you would not be applying for funding. No, need refers to the value to the community of the services or deliverables. Certainly there is always a need for medical care, but is there a community need for medical research? Depends on whom you're speaking to. But generally need is a statment of practical, immediate need in the community for what the project will bring, if funded.

I could argue persuasively for cultural endeavors, because I know about them and I support them personally. They mean that the community supports the arts and the arts are about quality of life, communication, community identity, educating the youth, bringing the community into contact with outside organizations that enlarge the community. It may also mean funds coming into the community because of taxes paid by businesses that benefit from the money spent by visitors to the community who come to enjoy the cultural events.

But could I argue for scientific research into the maintenance of grasslands in Nebraska? I could, vaguely, but persuasively? No. Probably not. I'm not qualified, although I could pretend to be and maybe fool some of the people some of the time. But not the experts who would presumably be reading the proposal.

So reliably establishing need in a proposal must come from good research...the head as well as the heart, and always experience - the wisdom borne of time and effort.

Where does budget analysis come in? You have to look closely at the budget and see if it is reasonable. That is, does the benefit to the community merit spending the money on the operations, the staff, the administration, and the project? The irony is that without the funding it may not be possible to judge the value to the community. In other words, the project may or may not enrich the community $1 million worth, but we need to spend $500,000 to find out. Few grantmakers would take the wager. You might luck out and find just the right fit with your mission and the mission of a foundation, but it would be the exception.