Bravo Matthew! Couldn’t agree more. Surely you are familiar with the “nonprofit starvation cycle” that was the subject of an article a few years ago in this publication and stresses how nonprofits are literally starved of operating funds because of the decades long unrealistic expectations? And there is Dan Palotta who is the standard bearer for adequate operating funds as well as paying nonprofit staff what they are truly worth, the same as in the for profit world. I’m very glad you’ve added your voice and this important perspective to this critical issue. (I recently read a comment in a different article about nonprofits that no executive director should earn more than $50k! I could barely see straight!). We are fighting a pervasive attitude throughout society that nonprofits should do all you say and those of us who work at them should be paid poverty wages. But it’s a fight worth fighting so we can continue to change lives, save our environment or accomplish many worthy missions.
NGO’s should be aware of their limitations and know when to pass the torch. There are many organizations that have been serving in Haiti for decades, and would have certainly be able to utilize the money in a more responsible way. Haiti Endowment Fund has been there for 30 years, not a single American taking a salary. It is possible, but the humbleness to admit something is beyond your ability is required.
We must continue to push on this issue to educate the public that solving problems requires innovation and top talent, and that great people won’t work for free, no matter what the cause is.
Thanks for all the great thoughts everyone. I think you all echo many of the points I tried to make here and address some of the key issues.
Here are some questions that have emerged in this debate that are interesting to me:
Should the Red Cross seek to provide longer-term relief rather than just giving immediate aid?
If so, how much failure is reasonable to tolerate as they learn new skills and adapt them to new situations?
If not, what should the organization do when it sees a larger need than its core competency? Is it ok to pass funds off to other organizations - such as HEF in this example? Will donors be ok essentially funding a different organization if donations are simply handed off? Should we fault the Red Cross for spending on management fees when subcontracting?
While the Red Cross story is interesting, the larger issues this situation surfaces are far more interesting for their relevance to the social sector in general.
In the discussions I have had following the publication of this article, it’s clear that there are a range of opinions on the above questions. It seems that as advocates for social sector success, we need clarity on the results we want, and consistency in advocating approaches that will lead to those results.
To solve problems organizations will have to invest in themselves. For those organizations that are great fundraisers but which are not equipped to meeting the challenges of a specific situation, we will need to be ok with the organization either investing, transferring funds, or subcontracting - and we cannot fault it for the perceived inefficiencies of these activities.
I am optimistic that more communication, collaboration, and systems thinking can allow organizations with different competencies to address the challenges posed in the ProPublica article.
Akshaya is correct. Transparency would help. Unfortunately, with every blow up, the Red Cross reacts by retreating. This began anew with 9/11 when, in my opinion, it received unjustified, ill-informed criticism of its work. Also, as a behemoth, it doesn’t always play well with others.
I know from experience that it is trying. To your points, another way to think about it is this: Why would we expect an organization that relies upon volunteers to respond like a disaster services SWAT team? Why would we expect an organization that has to raise money for disasters after the fact to be well-prepared? Why do we require the Red Cross to spend money raised during a disaster only on that disaster regardless of need? What is the proper mission of the Red Cross? Is there even such a thing as a well-planned, organized response to major disaster that isn’t conducted by the military? etc. etc.
I’ve just read this in the context of the 2018 Oxfam scandals (and others) and it is excellent. Having been a CEO of a medium sized charity for more years than I care to remember I can relate to the numerous dilemmas involved. For years we’ve had local authorities arguing that they will only commission us if we keep our overheads at 10% of turnover. We constantly hear other sectors bleating on about low pay rises whilst we went through a period of none for seven years to cope with reduced funding. And whilst commissioner’s were reducing our funding they were demanding more in terms of outcomes and monitoring us more heavily at the same time. More bureaucracy but still no funding for infrastructure. We have been at the forefront for years with paternity leave, carers leave, equal pay for women all around for decades but still we face some sections of the public complaining that we shouldn’t earn a decent living wage because we’re a charity. At the same time they expect us to be the most efficient sector possible, have squeaky clean policies for everything from safeguarding to data protection…..and they have to be 100% effective with the organisation never making a mistake. Meanwhile, our paymasters now expect us to reduce our overheads even further because they “NEED” us to do so in order to keep delivering services they need but are not willing to pay for.
Everybody wants us to be professional but nobody wants us to spend money to do so.
Oxfam have some 27,000 people working for them worldwide and a handful misbehave and are dealt with as they should be. In the meantime that sort of behaviour goes on throughout society and is, wrongly, not even challenged. Yet we’re the bad guys. Quite frankly it’s a joke.
COMMENTS
BY Cathy J Sharp
ON June 8, 2015 05:15 PM
Bravo Matthew! Couldn’t agree more. Surely you are familiar with the “nonprofit starvation cycle” that was the subject of an article a few years ago in this publication and stresses how nonprofits are literally starved of operating funds because of the decades long unrealistic expectations? And there is Dan Palotta who is the standard bearer for adequate operating funds as well as paying nonprofit staff what they are truly worth, the same as in the for profit world. I’m very glad you’ve added your voice and this important perspective to this critical issue. (I recently read a comment in a different article about nonprofits that no executive director should earn more than $50k! I could barely see straight!). We are fighting a pervasive attitude throughout society that nonprofits should do all you say and those of us who work at them should be paid poverty wages. But it’s a fight worth fighting so we can continue to change lives, save our environment or accomplish many worthy missions.
BY Don Frazier
ON June 8, 2015 09:12 PM
“.....flexible funding that adapts to changes in the world, and embrace innovation and failure.”
Intriguing. You suggest that the Red Cross does not have this understanding.
What was the right way for all of that money to result in housing?
BY Akshaya
ON June 9, 2015 03:19 AM
Transperancy should be there. This will allow people to see what’s happening inside.
BY Kathleen Delph
ON June 9, 2015 06:42 AM
Well said, Matthew! With a 25 year career in the sector I cannot point to a more pressing issue than this.
BY Jill granquist
ON June 9, 2015 08:23 AM
NGO’s should be aware of their limitations and know when to pass the torch. There are many organizations that have been serving in Haiti for decades, and would have certainly be able to utilize the money in a more responsible way. Haiti Endowment Fund has been there for 30 years, not a single American taking a salary. It is possible, but the humbleness to admit something is beyond your ability is required.
BY Don Frazier
ON June 9, 2015 08:40 AM
I take it that the Red Cross finds it difficult to turn to the HEF and organizations like it for implementation of its plans. Why is that?
BY Ken Davenport
ON June 9, 2015 10:39 AM
Mathew—
I wrote something here last week that addresses the same theme (http://www.ssireview.org/blog/entry/working_in_the_dark) and couldn’t agree more with you. Unfortunately, the “overhead” and salary focus in the mainstream media continues—see the article on the Wounded Warrior Project in the Daily Beast as evidence: http://www.thedailybeast.com/articles/2015/06/08/vet-charity-s-new-fight-to-waste-your-cash.html. Apparently it’s a “waste of cash” to pay the CEO of a $250mm organization $450k a year.
We must continue to push on this issue to educate the public that solving problems requires innovation and top talent, and that great people won’t work for free, no matter what the cause is.
BY Matthew Scharpnick
ON June 10, 2015 09:51 AM
Thanks for all the great thoughts everyone. I think you all echo many of the points I tried to make here and address some of the key issues.
Here are some questions that have emerged in this debate that are interesting to me:
Should the Red Cross seek to provide longer-term relief rather than just giving immediate aid?
If so, how much failure is reasonable to tolerate as they learn new skills and adapt them to new situations?
If not, what should the organization do when it sees a larger need than its core competency? Is it ok to pass funds off to other organizations - such as HEF in this example? Will donors be ok essentially funding a different organization if donations are simply handed off? Should we fault the Red Cross for spending on management fees when subcontracting?
While the Red Cross story is interesting, the larger issues this situation surfaces are far more interesting for their relevance to the social sector in general.
In the discussions I have had following the publication of this article, it’s clear that there are a range of opinions on the above questions. It seems that as advocates for social sector success, we need clarity on the results we want, and consistency in advocating approaches that will lead to those results.
To solve problems organizations will have to invest in themselves. For those organizations that are great fundraisers but which are not equipped to meeting the challenges of a specific situation, we will need to be ok with the organization either investing, transferring funds, or subcontracting - and we cannot fault it for the perceived inefficiencies of these activities.
I am optimistic that more communication, collaboration, and systems thinking can allow organizations with different competencies to address the challenges posed in the ProPublica article.
BY Bill
ON June 11, 2015 05:13 AM
Akshaya is correct. Transparency would help. Unfortunately, with every blow up, the Red Cross reacts by retreating. This began anew with 9/11 when, in my opinion, it received unjustified, ill-informed criticism of its work. Also, as a behemoth, it doesn’t always play well with others.
I know from experience that it is trying. To your points, another way to think about it is this: Why would we expect an organization that relies upon volunteers to respond like a disaster services SWAT team? Why would we expect an organization that has to raise money for disasters after the fact to be well-prepared? Why do we require the Red Cross to spend money raised during a disaster only on that disaster regardless of need? What is the proper mission of the Red Cross? Is there even such a thing as a well-planned, organized response to major disaster that isn’t conducted by the military? etc. etc.
BY Peter Barker
ON June 17, 2015 10:20 PM
The Red Cross tries to be a generalist organisation. It may achieve more if it passed the money to specialist groups, especially if that group is already active in the disaster area.
This is why I think specialist organisations like Médecins Sans Frontières probably do a better job, as they only provide medical treatment.
BY Mike
ON March 8, 2018 04:46 AM
I’ve just read this in the context of the 2018 Oxfam scandals (and others) and it is excellent. Having been a CEO of a medium sized charity for more years than I care to remember I can relate to the numerous dilemmas involved. For years we’ve had local authorities arguing that they will only commission us if we keep our overheads at 10% of turnover. We constantly hear other sectors bleating on about low pay rises whilst we went through a period of none for seven years to cope with reduced funding. And whilst commissioner’s were reducing our funding they were demanding more in terms of outcomes and monitoring us more heavily at the same time. More bureaucracy but still no funding for infrastructure. We have been at the forefront for years with paternity leave, carers leave, equal pay for women all around for decades but still we face some sections of the public complaining that we shouldn’t earn a decent living wage because we’re a charity. At the same time they expect us to be the most efficient sector possible, have squeaky clean policies for everything from safeguarding to data protection…..and they have to be 100% effective with the organisation never making a mistake. Meanwhile, our paymasters now expect us to reduce our overheads even further because they “NEED” us to do so in order to keep delivering services they need but are not willing to pay for.
Everybody wants us to be professional but nobody wants us to spend money to do so.
Oxfam have some 27,000 people working for them worldwide and a handful misbehave and are dealt with as they should be. In the meantime that sort of behaviour goes on throughout society and is, wrongly, not even challenged. Yet we’re the bad guys. Quite frankly it’s a joke.
Rant over.