Is NPO a Dirty Word? Finding a Model that Works in 2010

Those of us working in the NPO world constantly think about fundraising - how, when, where, etc. Then again, those working the world of profits always think about money - bottom line, where's the next money making idea, profit margins, etc.

But in fundraising circles there is this increasing sense that NPO's have to reconsider how they do business, especially in these economic times. How can one stay current in the world of 'the ask,' where every conversation may lead you to new contacts, where every letter of inquiry might, once and for all, be the one that means real sustainable funding for your program.  Or, how to move beyond the constant scrounge for funding to monies that mean growth, development and success in the years to come for the organization. Can one use a for profit approach that will reduce the fatigue of 'yet another NPO asking for funds.'

But what about the social worth factor? Something that makes a difference to others. Isn't that why you got yourself into this mess? As Dan Pallota, longtime NPO innovator writes, "We got involved because human suffering is not okay with us, and because we wanted to stop it."

Pallota, believes that NPO's should be allowed to do business in a way that would align them much more with profit making businesses, and in his new book, Uncharitable, writes that NPO's should be unleashed to do their good works under a free-market model.

“It is about freeing charities—and all of the good people who work for them—from a set of rules that were designed for another age and another purpose, and that actually undermine their potential and our compassion,” writes Dan Pallotta in Uncharitable (Tufts University, 2008).


As a parent of a child with special needs, I can tell you that I did not intend to start a program that would grow from 10-40 kids in less than a year. But it was hard to stop the ball from rolling once my colleague and I saw the need. Shutaf, the camp program that we founded makes a difference, serving children during long school vacations, August and 1x a week. Did the funding or lack thereof stop us from bringing in teens with special needs as well? Err, no. Our own kids are growing up and we saw the need. More than two years into this venture, we have yet to take a salary or truly pay ourselves back for costs incurred and time given.


Maybe Shutaf isn't yet ready for the kind of business models that Pallotta presents or maybe we should have considered building our infrastructure from the get go the same way a new business would. And yet, when I recall our 2nd camp, back in December 07, we had a budget shortfall. Essentially, we had some donations to make camp possible that combined with parent tuition should have covered everything. It didn't. One salary to one specialist remained unpaid for 6 months, until we had more funds in place by the following summer. Powerful lesson I thought at the time. We will never run a program again if we're not sure that we have the money.  That's a good business lesson, one worth learning but not one that all NPO's follow - at least not here in Israel.

What about partnering with NPO's doing similar work? This makes sense in theory but in practice or reality, doesn't always jive.

At Shutaf, we've been examining this concept from all sides but have discovered that it's not so easy. We spent much of the past summer negotiating with two local organizations in order to run our proposed weekly program for Shutaf kids with them. One organization works within the community and offers much of interest to typically-developing kids. Kids with special needs fit in only if they can manage within traditional inclusion boundaries - that is, they can be part of the program with minimal intervention. Unsurprisingly, many kids with special needs don't take part because they need extra staff or for the program to be adapted to their needs. They want us to bring our kids to them but were unwilling to really offer a space or a way of making it possible. Organization #2 works with a mainly adult population (they started off as kids) and is accustomed to the needs presented by people with special needs, even bigger needs, but they're not sure why they should bother with our method and our population - what's the worth in it for them. After having spend some time trying to convince both of them, we gave up for a while - rather, we retreated to reconsider a better approach in the future.

Financially it could have been a boon for us - shared resources, shared funds and a chance to fundraise and tell individuals and organizations that we serve more children, learn from each others methodologies and ultimately make a bigger and better difference.

We sat down again, rethought our finances, decided that we could manage a bare bones program for a small group of kids and went ahead with our fall program albeit much more simply - 8-10 children, 1x a week and found ourselves a hosting location willing to make it work for us financially. A success? We think so, but that means we're back to square 1 when it comes to finding longterm funds for the program.

I constantly think about other ways that we can generate funding in a more traditional sense. Lots of ideas but none that would work right now. We're running a program in a poor city, serving many marginal families with children who would not attend our programs unless they were as subsidized as we make them. 

How do we move our young organization to a business model that foundations would still fund and private donors would still find acceptable? One that would impress them both with our financial acumen and ways of making it work - especially in this particular market and economic environment. And, how do we, an NPO barely scraping by, get the right kind of advice and mentorship that could mean success and a viable future for our organization so that we can continue with our mission of quality, inclusive informal-education programming for children and teens with special needs?

Here's a great closing story that makes me feel like a real Vermonter, given that at Shutaf we're quite careful with every shekel. Christopher Kimball from Cooks' Illustrated wrote recently (sorry, couldn't find the original)..


I leave you with yet another story from Allen R. Foley, who wrote The Old-Timer Talks Back. It was foliage season and a tourist cruising the back roads felt an immediate need to visit toilet facilities, so he stopped at a farm. The lady of the house directed him to the privy out back. On arriving there, he was embarrassed to find it already occupied by the farmer.
“No bother,” said the farmer. “This is a two-holer, so come on in.”
Later, as the farmer was leaving, a dime fell out of his pants and slipped down the hole. The farmer got out his leather wallet, removed a $5 bill, and tossed it down the hole.
“What in the world did you do that for?” exclaimed the visitor.
“Mister,” said the farmer, “you don’t think, do you, that I would climb down in there for just a dime?”