“But love is blind, and lovers cannot see the pretty follies that themselves commit…”
When William Shakespeare penned these famous words, he clearly did not have nonprofit organizations in mind—but he could have. Most nonprofits are, after all, started by passionate people with a deep love for what they do. And, surprisingly, that love, that passion is often their downfall. I call it “passion blindness.”
Creating a nonprofit organization requires passion. Nonprofit organizations are by definition mission-driven. Put another way, the reason that people form nonprofit organizations, particularly those that serve people or places in need, is that founders often believe it is their calling to create an organization that allows them to transform deeply felt passion into action.
To bring an organization into being is an act of great faith, sheer will and tenacity. It is the intensity of this calling that may cause those in the field to overlook opportunities and to fail to respond soon enough when trouble is on the horizon.
We offer this call to action now during a time when the nonprofit sector is at a crossroads—dependent for its very life upon the generosity of others (i.e., individuals, foundations, members or government programs). The sources of funds that the sector is so dependent on are themselves at stake in the current financial environment. Individuals and institutions, like foundations and governments, are tightening their belts as they watch assets shrink. That means that most nonprofits must tighten their belts as well.
Organization executives are often so busy meeting current needs they neglect to plan for an unforeseen financial crisis. In addition, it is often difficult to convince board members and supporters to create and donate to a “rainy day” fund, even though for decades experts have advised organizations to have six months of operating expenses on hand. An even more daunting challenge is creating a worst-case operational plan. By developing various operating scenarios that reflect fewer staff and less money, an organization would know exactly what services it could continue to provide during a crisis.
According to a 2007 report by the Third Sector, a Boston-based think tank devoted to research on the nonprofit sector, there are more than 1.4 million nonprofit organizations in the United States. They account for 5.2 percent of the gross domestic product and for more than 8 percent of salaries and wages paid in the nation. This does not include the more than 350,000 churches that are also nonprofit organizations. Moreover, private sources invested more than $250 billion in nonprofits in 2006, individuals nearly $200 billion and volunteers gave the equivalent of more than $65 billion in donated services.
There is no question that pressures on the nonprofit sector will almost certainly result in job losses, in fewer services to those most in need and in decreased economic and community development activity at a time when demand for such services and activities will no doubt be growing. Generally speaking, making preparations to mitigate the impact of predicted financial contraction is a function of leadership. Organizations that have a chance to survive will do so only if their board and staff leadership have the courage to face the current and worsening economic climate head-on and prepare.
Compounding the financial issues is the unfortunate fact that many, if not most, nonprofit organizations—regardless of their constituency, size or industry—are not prepared for hard times. They are already struggling with internal problems that make life difficult during good times. Add those to a crisis, and trouble is inevitable.
The problems that often plague nonprofits come down to seven things—“Seven Deadly Sins,” if you will. Mind you, these are known in theology as “Cardinal or Capital Sins.” They are mortal, and they particularly may affect the mortality rate of the organizations during economic downturns. They are as follows:
PRIDE: Many of those who join boards are doing it out of the desire to have their name listed on the letterhead and adding it to their resume to prove how involved they are in the community. They are not there to offer expertise or raise funds or take on the challenges of governance. They are, essentially, nonessential to the organization. They take up a seat that could be occupied by someone who has something of value to offer the organization. According to theological sources, the opposite of pride is humility. Service to the community, no matter what it is, should evoke a sense of responsibility that is humble. This is particularly so when the people served by an organization are those least able to help themselves. That is why nonprofit organizations have an obligation to be as efficient as possible.
SLOTH: There is nothing worse for a nonprofit executive than to have a lazy board, lazy staff or to be lazy themselves. Executives who do not routinely and vigilantly scan their environments for potential threats and board members who refuse committee service, do not come to meetings, and, worse, don’t contribute financially or raise money for the organization fall into this category. By definition, this is their duty. The corresponding virtue is diligence. Boards must demand diligence from executives and the executives from their boards. Another expression of this virtue is zeal or integrity. Staff members cannot be left out, either. Some people want to do as little as possible, but claim to be passionate about the cause. Passion is no substitute for integrity, and your name on the letterhead and the payroll puts your integrity on the line.
LUST: I know this must sound strange in this context; however, the opposite of lust is purity of soul and motive. If the motive is the mission, then this sin can easily be avoided. Suffice it to say that if everyone is mission-focused and mindful of the business of the organization, lusting after something other than carrying out the mission and protecting the organization from harm can be avoided or at least mitigated. People may lust over positions, money or recognition, but good leadership that is pure in its motivation is the antidote.
GLUTTONY: Overindulgence in anything usually leads to illness. Taking on more clients than you can handle when finances are tight and accepting donations with strings attached just to pump up the budget can lead to no good end. Gluttony is balanced by temperance or self-restraint. Gains born of competition, hubris or avarice almost inevitably lead to failure. Focus on mission is essential, along with the honest assessment of organizational capacity which, these days, may have to be scaled back so that the organization might be saved.
GREED: Lusting for being bigger and better than the other guy (i.e., gluttony and lust combined) is probably one of the worst and most common sins. Nonprofits desperate for operating capital often make “deals with the devil” to get a grant or to satisfy a donor who wants them to veer away from their core mission or take on something totally beyond their actual capacity. Obviously, this sin is closely related to gluttony, but its opposing force is different. It is charity. Remaining true to the organization’s charitable purpose with steadfast discipline will often effectively steer an organization away from the path of greed. Giving time, energy, thought, hard work and treasure (money) to the cause is charity of the kind that can trump greed.
WRATH: Wrath or anger most often occurs when personalities and egos clash in the context of the organization. Whether it is among board members, the board and executive or among the staff, anger eats away the energy that should be focused on the work or repositioning the organization to weather the storm in hard times. Some of the most vitriolic and vicious battles I have witnessed have taken place in staff and board meetings of nonprofit organizations when the time comes to bite the proverbial bullet and cut services or lay people off.
People seem to forget that there is no ownership here. You may disagree, but the collective responsibility is to get the job done. It is here where board leadership is most important. The chair of a board of directors has the responsibility to ensure that anger among board members does not escalate to the point of inaction, wrong action and damage to the organization. The executive has the same responsibility at the staff level. The balancing characteristic is composure. It is incumbent upon the board and staff leadership to maintain their own composure and that of the staff so that they can carry out their work and the organization may survive to serve another day.
ENVY: Last, but certainly not least, is envy or jealousy. If you vote for someone to be chair of the board, then you are accepting the role of follower. I have often heard board members who, having been given the opportunity to serve, decline in favor of another, then talk about how much better a job they could have done. The same is true among staff members. Another function of leadership is to ensure that, when staff members get reshuffled in reorganization efforts, they do not allow jealousy to poison the organizational environment. Jealousy in any context is destructive. Its opposing force is kindness and/or admiration. People who take on the challenging work, who do the hard part with integrity, commitment and results, deserve both.
No amount of passion, compassion or even need can substitute for clear-headed thinking, planning and preparation. In other words, board members and executives cannot afford to be blinded to the threats to their existence by their passion for the work.
In today’s environment, it is crucial that nonprofit organizations embrace the fact that, just because you are nonprofit, does not mean you are not in business. It is a business. Successful business people plan and make hard decisions and the best ones execute those plans and decisions to survive hard times. So must nonprofits.
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