Thursday, December 8, 2011

“Nothing ruins a good organization like too much money.”

I’ve never forgotten this comment from Indiana soybean farmer Wilf Illingsworth in the 1980s. It speaks to money and associations and other nonprofit organizations. I’ve come to learn it’s a pretty accurate statement.

And, I thought of Wilf’s statement as I read Mark Rosenman’s Chronicle of Philanthropy article titled “Calling All Boomers: Don’t Start More Nonprofits.”

In the opinion piece, Rosenman espoused that we have too many nonprofits and seems to suggest that the nation would be better off if the nonprofits were “centralized” in Washington (although this may be my non-Washington bias).

Here are two quotes from his piece that bother me:
  • “While certainly the commitment and spirit of these baby boomers—and of the millions of others who contribute to improving conditions in the United States and around the globe—are to be lauded, the idea that everybody needs to start a nonprofit is incongruous with the joint action necessary today.”
  • “As the philanthropy consultant Christopher Harris observed, our society again needs activists, not entrepreneurs. We need nonprofit organizations and foundations willing to challenge the fact that right now America’s celebrated social mobility is only downward. That won’t change unless millions of baby boomers shift their social commitment from an ill-advised and self-centered ambition to start a plethora of new enterprises and instead work together, and with others, to build the social, political, and economic movement required today.”
As one who has helped organize two national non-profits, I’d suggest that “boomer entrepreneurs” (and others) start new nonprofits because (a) they are not aware of existing organizations or (b) they don’t feel the existing organizations are fulfilling their needs.

Speaking of “new nonprofits,” here are three examples of awesome organizations started – not by boomers – but by youth or children. Does Rosenman suggest we shouldn’t have such groups?
  • Racing for a Cause: Campaign was founded in 2009 by then 7-year-old Ricky Springer. Ricky was born with an Eosinophilic Gastrointestinal Disorder called Eosinophilic Colitis. Because of the lack of knowledge within the medical community about these disorders, Ricky suffered for the first 21 months of his life, seeing 18 different doctors who were unable to diagnose his illness. His funds support EGD research.
  • Laps for CF:  Emily Schreiber and her foundation, Laps for CF, in an effort to fight cystic fibrosis.
  • Kids are Heroes:  I'm MaryMargaret! In early 2008 I asked my dad to help me build a website so I could help animals. He said, "Why not help people and the environment too?" I liked that idea and Kids Are Heroes was born. If you're a kid just like me, look around to see what we're doing and how you too can make a difference! It's LOTS of fun!!”
I recalled Wilf’s comment that “nothing ruins a good organization like too much money” because of this comment from Rosenman’s opinion piece:

“Why do boomer entrepreneurs seem to think that starting millions of brand-new entities is the most effective way to make a societal contribution? Why can’t they work through existing organizations to start their creative new programs, improve existing ones, or concentrate resources instead of multiplying administrative and overhead costs?”

The last phrase about not multiplying administrative and overhead costs intrigues me.

Let’s look at the Humane Society of the United States (HSUS), one of the big Washington-based nonprofits. According to their IRS filing via Guidestar, they reported gross expenses of $121.7 million on their 2009 tax return (the most current published on Guidestar).

Of this, they spent $35.8 million on salaries, $16.6 million on fund-raising $3.7 million on “lobbying/public policy” and $6.7 million on grants that fulfill their mission. In 2009, HSUS paid $120,000 or more in salaries to 12 staff members.

I realize that these costs – as a percent of total expenses – appear to be modest but I don’t think most Americans would agree with Rosenman that having big national organizations keeps administrative and overhead costs from multiplying ... especially in such high cost locations as Washington DC.

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