The local YMCA notified members that it would soon be shuttering it doors. People are up in arms and the community is looking for answers. Answers. Seriously?
Almost all nonprofits are in trouble. Why? Because they rely on government money, government grants. That money has dried up. And they haven’t figured out how to get around it.
I am not going to touch on politics right now, but everyone WAS warned that government funding was going to come to a grinding halt. What? Nobody believed it would really happen?
Nonprofit organizations rely on donations. I know that seems obvious but a lot of people don’t understand how that works. Even some people actually involved with nonprofits, whether it be paid executives or volunteer board members don’t REALLY get it.
Nonprofits have various revenue streams. And depending on the organization, the mission, how it operates…that will determine where the bulk of the monies come from. But most organizations, if not all, rely at least somewhat on private individuals to give money every year. That is how organizations operate.
Now organizations like churches, synagogues, recreation centers, and even YMCA/YWCA’s, they too rely on donations. But what makes it even tougher is that these organizations are “fee-based” organizations. So they derive a lot of monies from membership fees and other assessments. So when the fundraising person comes around asking for donations, a member just might ask, “I am already giving you money, I pay a membership fee, why should I give you even more money?”
That is the trouble I had years ago when I was offered a job with a local Jewish Community Center. They charged a very high membership fee and THEN wanted me to come in and raise $5 million additionally from these very same members. The job paid well but I knew that there were slim pickings and there was nothing left to take from so I moved on to a more workable situation with a lot more promise.
The reason why I bring that up is that the Executive Director was in a no-win situation. The government funding was cut off and the people in that situation were already coughing up their money and were not going to then, on top of that, donate enough money to even put a dent in it to cover operating costs.
That’s the nonprofit world today.
“When I started out raising money, it was like there was a large pizza with eight slices and six people were hungry. There were enough pieces for everyone to get one slice and enough left over to divide up and hand out like they were gum drops. Fast forward to today, and it is like there is a small pizza with six slices and 300 hundred people are hungry. There is simply not nearly enough to go around.”
That was 15 years ago. Today, it’s like you have an Ellio’s frozen slice and 500 people are hungry. Everyone is fighting over the same morsels.
For quite a while, nonprofits didn’t worry much about it. They didn’t do much fundraising because they didn’t have to. A lot of non-profits would somehow, at some point, get a government funded grant and there they had it – guaranteed monies without having to go out and ask anyone for money.
And that was great. Because it seems that a lot of nonprofits are not run by nonprofit people. They seem to be run by people who are from the social work sector with a social work background. For some reason, there seems to be a melding of nonprofit with social work. But that is not necessarily the case, and in terms of management, that is not necessarily good business sense.
That is not to say that anyone in the social work field is not a good business person. I wouldn’t say that. But I can tell you, from experience, that too many people who are in high level positions have absolutely zero knowledge on how to run a nonprofit organization. More importantly, they have absolutely no clue how to raise money and, for the most part, have no interest in raising money, so long as their paycheck is getting funded.
Nonprofits are suffering because they have for way too long relied too much on government funding rather than hire people who knew what they were doing to fundraise. And now that the government funding is being cut off, the nonprofits are in trouble. Why? Simple. Nobody wants to hire someone that will make them look like THEY don’t know what they are doing.
Let’s be clear. Even though the hierarchy usually includes a Development Director, or Manager, or some person charged with raising the money, it is still the Executive Director’s job to be the LEAD fundraiser. THEY are responsible for the budget, the bottom line, of the organization. Every Executive Director should be well-versed in HOW to raise money to meet the organization’s budget annually. But all too often, the Executive Director is not a person with a background in nonprofit policies and procedures, and certainly no experience in fundraising.
And a lot of Executive Directors have an ego and an inflated value of their worth. Because if you are the Executive Director of an organization, and you don’t know how to raise money, you are worthless. Your salary is going down the toilet.
Recently I met with an organization in Boulder, Colorado. The Executive Director met with me with the intent of joining the Board of Directors. She had no fundraising experience. She was a MSW who was tapped to head this social services organization. Over 90 percent of all monies came in from government sources. About 5 percent came in from product producing revenue, and the rest, a small portion, came from basically a single generous person. No fundraising efforts made other than to sell a client-produced product to the public.
So I asked the ED, “What’s your annual budget?” She responded, “I don’t know. My treasurer knows that.”
I asked her “How much money came in during fiscal year 2025?” She responded, “My treasurer has that information.”
I responded with, “Well, didn’t you have a recent meeting when financial reports were read into the minutes? What was the income announced at that meeting?” She responded, “Did we even have a meeting? I don’t remember. I would have to look at my calendar.”
I asked her “What is your organization’s case statement for support?” She responded, “What? Um…I should know it. I would have to look it up.”
I looked at her, looked at the Board President who was sitting next to me, and I walked out.
What I didn’t say before but I will say now is that the Board President, knowing that the organization was in serious trouble financially, had spoken to me and wanted to bring me on board as the Development Director, at least for a short period of time, to right the ship. However, the ED refused to hear anything of it and said, “The situation wouldn’t work for me.”
No…the situation would NOT work for her. Because she would be out of a job. She has absolutely no clue as to what she is doing. And she doesn’t want someone like me, who has been around the nonprofit world for so many years and has expertise in raising money, coming in and exposing her for what she is, or actually, what she is NOT, and inevitably she would be replaced with someone who actually knows what they are doing.
My father always taught me that I should never be afraid, or intimidated, to surround myself with people who were smarter than me, better than me, and more skilled than me. When my dad headed any organization, ran his business, he always brought in the best of the best.
He reasoned, and rightfully so, if you can’t get the job done, eventually it will lead to your demise. So why not surround yourself with talent and it will make you look even better than you are. And the more you show how much you appreciate those people who do that for you, the better they will make you look.
So everywhere I have gone, when I am in a position of leadership, I look for people who can bring something to the table that I can’t. I am not too ashamed, or stupid, to believe that I know everything. I don’t. Nobody does.
But the fear of losing a job, the shame of implied failure, and the shielding of one’s ego can lead to the downfall of an entire organization.
That is what I have been finding in reaching out to, and communication with, a lot of nonprofits recently. Yes, I get the obligatory “…we decided to go with a person who more fits the needs of our organization…”
And what exactly does that mean? You need someone who knows how to raise money, who knows how to turn an organization around, who knows how to bring it to a level of self-sustainability? My long resume checks all of your boxes.
Or just maybe, for your own inexplicable reasons, you don’t really want someone that actually checks all those boxes?
