I disagree with this. I don’t think non-profits face greater scrutiny than the for-profit sector. And there are a lot of inefficient and incompetent non-profits… The sector needs to be more accountable and more competitive. Many NPs just shouldn’t exist or should have been consolidated into other organisations.
I work for a non-profit having previously worked for an investment bank. the investment bank had a far better culture - driven by transparency of incentives (money and power). The same incentives exist in the non-profit but they’re covered with a veneer of sanctimonious self-righteousness. Ie how dare you question me? I am doing good.
I feel like you’ve misunderstood and/or mischaracterized the piece.
You state, “The same incentives exist in the non-profit but they’re covered with a veneer of sanctimonious self-righteousness.” Isn’t that supporting Ms. Gauss’s point when she says, “the public not only sees self-interest as the go-to explanation for behavior, but also a directive by which people should live”?
You appear to believe that people aren’t working at NPs for moral reasons, that they are there for the “same incentives” as people at the investment bank (“money and power”). In other words, you seem to say that people at NPs are acting in their own self interest- reinforcing Ms. Gauss’s argument that most people buy into the Norm of Self Interest.
And to say that you feel the incentives in the NP world are covered with a “veneer of sanctimonious self-righteousness” seems to reinforce Ms. Gauss’s later point that, “when the general public considers someone who has devoted their career to charitable work, they assume these professionals feel morally superior.”
And unless I missed it, the author didn’t state that NPs face greater scrutiny than for-profits, only that they are often unfairly assumed the worst of.
You seemed to miss her main points and actually bolster others…
This is indeed a very apt piece. I had the privilege of working for both for-profit and non-profit organizations both at local and international level, I must confess some of the issues mentioned are quite similar if not the same in the two sectors. Take the issue of compensation as an example, the higher-ups almost always take a chunk of the budget, but when the public is complaining even the hard working not so excessively compensated middle and lower staff members are roundly condemned.
While it is easy for the for-profit organizations to justify their existence, the non-profits have to go the extra miles to justify their existence and intervention.
Thank you all for reading! I appreciate all the comments. Professor Miller’s piece, “The Norm of Self-Interest,” is a fascinating read, if you want to learn more.
The Red Cross raised: $488 million and used $145 million. They built six solid homes - I’ve seen them - having traveled to Haiti several times. So what happened to the balance of $343 million.
Food For the Poor, Inc in South Florida built 5,633 hurricane and earthquake ready homes in Haiti housing over 33,000 people. In addition to installing 90 water filtration systems to the tune of $35,00 a piece, installed countless wells, rebuilt schools, provided food, treated cholera plus a ton of other stuff Red Cross did and still it does not add up to $145 million. I’ve seen their projects too.
To me, any international agency as big as the Red Cross should know that what they are getting into. How long have they been handling disasters?
Unfortunately, NGOs are under extra scrutiny and while it may not be fair, until we can turn the ship of public perception around that most of them are doing a great job it’s a reality we have to work with because people are giving their money without receiving a product or service in return.
An interesting argument, but I question the premise—that “people are eager to believe the worst of nonprofits.” Research including Edelman’s Trust Barometer shows that nonprofits are more trusted than business or government.
I’d also argue that nonprofits and foundations deserve more thoughtful attention and scrutiny, not less. Some press coverage of the sector is sensationalistic, as the author notes, but the Pro Publica stories about the American Red Cross were well-researched.
I wholeheartedly agree with the author’s call for “fierce transparency.” That will benefit the entire sector by spotlighting the nonprofits doing good work and exposing those who are not.
If giving decisions were proactive and evidence-based instead of reactionary, I believe donors would see the ROI they desire and non-profits would be more effective at delivering on their missions.
I completely agree with the author about NPO transparency as one solution to address public suspicion, but I would also suggest that philanthropists and funders have a role to play as well.
Funders must adopt and use sound, predictive research methodologies for evaluating organizations in a way that reveals overall health and impact.
Traditional granting programs are reactionary. Staff evaluates a program or project that has been submitted for their consideration. Funders review the proposal’s program/project, but do little in the way of a thorough evaluation of the organization as a whole. In this process, NPOs who are turned down typically receive minimal if any valuable feedback from funders and they are often left to wonder what they could do to improve their position.
The research I’ve seen on HNW and philanthropy indicates that reactionary giving is typical and evidence-based is atypical. Until donors and funders apply the same due diligence to their charitable ventures as their investments, this trend will continue. As will the public’s suspicions about the non-profit sector.
As an employee of a “large” non-profit, thank you for this thoughtful piece. This is an issue that I am personally struggling with as I know my motivation for entering this space, as well as the motivation of my colleagues and teammates. The unnecessary “hating” and the need to tear down all that is successful, non-profit or otherwise, is an extremely troubling societal trait, that needs to be addressed. Perhaps someone should start an organization to address this troubling trend… but I worry they would only be torn down.
I know people who who work for non profits, their STARTING base salary is 55K/yr+benefits. I’m not saying they don’t deserve it, but that pay is tied into working directly w/ cause. I’m sorry staff salary should NEVER be included w/ (x amount of your dollar goes to ...). Salaries and programs are two different things, it’s like saying advertising brings in money for programs so that’s counts as .97 to your dollar that goes back into program. And the transparency just isn’t there w/ a lot esp. the larger non-profits. FACT
This issue resonates beyond NP’s in the western world but also in other continents. As someone who works with the NP’s in Asia, I see most of what the article states all the time. One good reason why why there are NP’s that become the bad apples, is because they are sometime drawing more money that the collected foreign direct investment for the country, this makes them very powerful and even government leaders and SME’s will listen to them. Secondly, in many countries, political and religious parties also fall under the same category as other NP’s…you can now understand…:-)
Michael, your comment is confusing me. Are you saying $55,000 is way too much money, and nonprofit staff who work with clients shouldn’t be counted as part of the “program cost”? In that case, our program budget would be laughably small - imagine running a therapy group but not counting the therapists salaries in the budget!
COMMENTS
BY Cynical do-gooder
ON July 29, 2015 12:07 PM
I disagree with this. I don’t think non-profits face greater scrutiny than the for-profit sector. And there are a lot of inefficient and incompetent non-profits… The sector needs to be more accountable and more competitive. Many NPs just shouldn’t exist or should have been consolidated into other organisations.
I work for a non-profit having previously worked for an investment bank. the investment bank had a far better culture - driven by transparency of incentives (money and power). The same incentives exist in the non-profit but they’re covered with a veneer of sanctimonious self-righteousness. Ie how dare you question me? I am doing good.
BY Rebecca
ON July 29, 2015 12:36 PM
Dear Cynical do-gooder,
I feel like you’ve misunderstood and/or mischaracterized the piece.
You state, “The same incentives exist in the non-profit but they’re covered with a veneer of sanctimonious self-righteousness.” Isn’t that supporting Ms. Gauss’s point when she says, “the public not only sees self-interest as the go-to explanation for behavior, but also a directive by which people should live”?
You appear to believe that people aren’t working at NPs for moral reasons, that they are there for the “same incentives” as people at the investment bank (“money and power”). In other words, you seem to say that people at NPs are acting in their own self interest- reinforcing Ms. Gauss’s argument that most people buy into the Norm of Self Interest.
And to say that you feel the incentives in the NP world are covered with a “veneer of sanctimonious self-righteousness” seems to reinforce Ms. Gauss’s later point that, “when the general public considers someone who has devoted their career to charitable work, they assume these professionals feel morally superior.”
And unless I missed it, the author didn’t state that NPs face greater scrutiny than for-profits, only that they are often unfairly assumed the worst of.
You seemed to miss her main points and actually bolster others…
BY Tasha
ON July 30, 2015 02:00 AM
I just want to thank you for sharing this with us! It was really intersting! I enjoyed it till the last word! merry thanks! Tasha
BY Halilu
ON July 30, 2015 08:47 AM
This is indeed a very apt piece. I had the privilege of working for both for-profit and non-profit organizations both at local and international level, I must confess some of the issues mentioned are quite similar if not the same in the two sectors. Take the issue of compensation as an example, the higher-ups almost always take a chunk of the budget, but when the public is complaining even the hard working not so excessively compensated middle and lower staff members are roundly condemned.
While it is easy for the for-profit organizations to justify their existence, the non-profits have to go the extra miles to justify their existence and intervention.
This article is a wonderful piece
BY Allison Gauss, Classy.org
ON July 30, 2015 09:53 AM
Thank you all for reading! I appreciate all the comments. Professor Miller’s piece, “The Norm of Self-Interest,” is a fascinating read, if you want to learn more.
http://faculty-gsb.stanford.edu/millerd/docs/1999amerpsyc.html
BY Lisa
ON July 30, 2015 10:45 AM
The Red Cross raised: $488 million and used $145 million. They built six solid homes - I’ve seen them - having traveled to Haiti several times. So what happened to the balance of $343 million.
Food For the Poor, Inc in South Florida built 5,633 hurricane and earthquake ready homes in Haiti housing over 33,000 people. In addition to installing 90 water filtration systems to the tune of $35,00 a piece, installed countless wells, rebuilt schools, provided food, treated cholera plus a ton of other stuff Red Cross did and still it does not add up to $145 million. I’ve seen their projects too.
To me, any international agency as big as the Red Cross should know that what they are getting into. How long have they been handling disasters?
Unfortunately, NGOs are under extra scrutiny and while it may not be fair, until we can turn the ship of public perception around that most of them are doing a great job it’s a reality we have to work with because people are giving their money without receiving a product or service in return.
BY Marc Gunther
ON July 30, 2015 12:48 PM
An interesting argument, but I question the premise—that “people are eager to believe the worst of nonprofits.” Research including Edelman’s Trust Barometer shows that nonprofits are more trusted than business or government.
I’d also argue that nonprofits and foundations deserve more thoughtful attention and scrutiny, not less. Some press coverage of the sector is sensationalistic, as the author notes, but the Pro Publica stories about the American Red Cross were well-researched.
I wholeheartedly agree with the author’s call for “fierce transparency.” That will benefit the entire sector by spotlighting the nonprofits doing good work and exposing those who are not.
BY Lori Slaughter
ON July 31, 2015 08:48 AM
Thanks for this insightful article.
If giving decisions were proactive and evidence-based instead of reactionary, I believe donors would see the ROI they desire and non-profits would be more effective at delivering on their missions.
I completely agree with the author about NPO transparency as one solution to address public suspicion, but I would also suggest that philanthropists and funders have a role to play as well.
Funders must adopt and use sound, predictive research methodologies for evaluating organizations in a way that reveals overall health and impact.
Traditional granting programs are reactionary. Staff evaluates a program or project that has been submitted for their consideration. Funders review the proposal’s program/project, but do little in the way of a thorough evaluation of the organization as a whole. In this process, NPOs who are turned down typically receive minimal if any valuable feedback from funders and they are often left to wonder what they could do to improve their position.
The research I’ve seen on HNW and philanthropy indicates that reactionary giving is typical and evidence-based is atypical. Until donors and funders apply the same due diligence to their charitable ventures as their investments, this trend will continue. As will the public’s suspicions about the non-profit sector.
BY JC
ON August 4, 2015 06:02 AM
As an employee of a “large” non-profit, thank you for this thoughtful piece. This is an issue that I am personally struggling with as I know my motivation for entering this space, as well as the motivation of my colleagues and teammates. The unnecessary “hating” and the need to tear down all that is successful, non-profit or otherwise, is an extremely troubling societal trait, that needs to be addressed. Perhaps someone should start an organization to address this troubling trend… but I worry they would only be torn down.
BY Michael
ON August 6, 2015 04:20 AM
I know people who who work for non profits, their STARTING base salary is 55K/yr+benefits. I’m not saying they don’t deserve it, but that pay is tied into working directly w/ cause. I’m sorry staff salary should NEVER be included w/ (x amount of your dollar goes to ...). Salaries and programs are two different things, it’s like saying advertising brings in money for programs so that’s counts as .97 to your dollar that goes back into program. And the transparency just isn’t there w/ a lot esp. the larger non-profits. FACT
BY Sudeep Mohandas
ON December 1, 2015 05:43 PM
This issue resonates beyond NP’s in the western world but also in other continents. As someone who works with the NP’s in Asia, I see most of what the article states all the time. One good reason why why there are NP’s that become the bad apples, is because they are sometime drawing more money that the collected foreign direct investment for the country, this makes them very powerful and even government leaders and SME’s will listen to them. Secondly, in many countries, political and religious parties also fall under the same category as other NP’s…you can now understand…:-)
BY Ann Eck
ON December 17, 2015 11:57 AM
Michael, your comment is confusing me. Are you saying $55,000 is way too much money, and nonprofit staff who work with clients shouldn’t be counted as part of the “program cost”? In that case, our program budget would be laughably small - imagine running a therapy group but not counting the therapists salaries in the budget!