Monday, November 24, 2008

Boundless Optimism, No Money

As I mentioned last week, I recently attended the annual conference of the Independent Sector. Almost 1,000 representatives of the non-profit sector attended from throughout the US. Overall, the mood was ecstatic about the prospects for the sector in relation to the new Obama administration. It is anticipated that he will have a much more receptive approach to the organizations and their concerns. Speakers talked about dramatic system change, a major historic paradigm shift, a new social contract and a fundamental transformation in the American psyche. As a result, they expect a marked increase in funding and policy impact for non-profits.

A couple of the speakers at the conference cautioned against such an overly optimistic view. A pollster noted that the shift in public attitudes was actually only a few percentage points. In summary he said that we as a nation remain fundamentally quite centrist in our views and are not looking for a radical shift in social policy. The polling evidence pointed to a desire for a change that will bring us out of our financial nightmare, but not a substantial increase in social spending by government. However, some of my colleagues are convinced that, regardless of the facts, the heavens are about to open. Of course, even if the Obama administration wanted to dramatically increase funding for charities, the money just isn't there right now.

Not surprisingly, most people in the charitable sector lean to the left in their political views. After all, that perspective tends to argue for more social spending and hence, more funding for charities. However, due to the regulatory requirements on charities, our organizations are required to remain non-partisan. Yet the underlying political orientation of most individuals in those charities is unmistakable and pierces the veil at our gatherings.

At Charity Navigator, we consider it imperative to remain neutral on such matters. I had the experience recently where, on Monday a reporter called to get our comments on a corrupt charity that was affiliated with a union. On Tuesday, a reporter from the other side of the country called to get our comments on a corrupt charity that was affiliated with a massive corporation. We were equally critical of both and could be perceived as offending both the left and the right. More accurately, we remained committed to our mission and unbiased in our responses. The sector as a whole needs to do the same.

The sector would also do well to wake up and smell the coffee about the economy. We are in for less funding, not more, regardless of one's political perspective. The sector needs to honestly discuss that reality and take steps now to address it; not wait until it falls off the financial cliff.


Noah said...

It is my hope that the current state of the economy forces the sector to avoid wasteful spending, including exorbitant executive compensation, and focus on programming that benefits the common good.

Anonymous said...

Noah,I do think that it is important to remember that organizations that have leadership not worthy of a decent, executive salary typically struggle with running fiscally sound organizations -- crucial in these tight times.

Josie said...

Great post. I completely agree with your sentiments, but I want to add that there is too great of a feeling of entitlement by non-profits to money from all levels. There's also a lack of accountability regarding how nonprofits' benchmarks actually translate into providing actual benefits for people.

Ken Berger said...


I completely agree with your sentiments too! Stay tuned because we are going to begin to head down the road of getting information on nonprofit's are providing actual benefit. It is called outcome measurement. My first blog on the subject is coming out on Monday - 12-8-08.

Ken Berger said...


I meant to write - on HOW nonprofits are providing actual benefit.