Nonprofit organizations play a vital role in our society, providing critical resources and services to those in need. Nonprofit organizations feed the hungry, clothe the naked, and make sure children and other vulnerable populations are safe and have access to the resources they need to thrive. Simply put, we have positioned nonprofit organizations as the social safety net for humans who find themselves struggling to survive in our society. Great, right? Well, yes. Established institutions exist to supply a framework and monitoring to guarantee the continuity of society, while businesses that are driven by profit aim to provide a channel for commercial activity. When the organization of society and commerce do not supply an avenue for inclusion of the public (or collaborate to hinder citizens from being integrated into society), it leads to a necessity for a system or agency to assist in the reintegration of affected citizens. Nonprofit organizations were not originally created for the express purpose of infusing justice and crisis response into the society at large; however, it has become the prevailing justification for their continued existence. These organizations are supported by tax dollars and thus they can be tasked with cleaning up after the government and profit-based businesses. Tax dollars are scarce and it’s a big country. Nonprofit organizations are required to be transparent with every dollar spent and to operate within margins so slim that their employees often qualify for the safety net services they provide. So, what do we do? We have conferences and create coalitions and collaborative initiatives to “problem-solve” and come up with creative and unique (read: cheap) solutions to cover the growing chasms popping up all throughout society and threatening to swallow us whole.
Challenges Faced by Nonprofit Organizations
There are many challenges facing nonprofit organizations. Most notably, nonprofits don’t typically have the same profit margins as for-profit businesses, so generating revenue can be a significant challenge. Successful nonprofit organizations must therefore employ various strategies to raise funds and build a sustainable revenue model. In addition, the donor landscape has shifted in recent years, making it more difficult for nonprofits to secure funding. Consequently, it is important for organizations to employ strategies and tactics to help them grow and become more effective. Funding models have changed as well, making it increasingly important for nonprofits to diversify their funding sources. Though philanthropic giving is on the rise, it remains uncertain as to how much it will continue to grow. Moreover, traditional donors are aging, and there are fewer younger generations to take their place. Newer funding models like social impact investing, crowdfunding, and foundations that encourage collaborative partnerships are also changing the landscape. To respond to these changes, nonprofits must find new ways to engage with investors and funders, build collaborative partnerships, and diversify their revenue sources.
Whew! That’s a lot of challenges.
Looking at these challenges from a holistic angle, we see nonprofit organizations stuck in a negative feedback loop. They are asked to stand in the gap for the failures of society while suffering from the same constraints as the individuals they are tasked with helping. It seems to me that the real challenge is holding accountable the systems that create the circumstances that necessitate the need for a safety net. Said another way, it’s time we hold policy officials accountable for creating the very environment that necessitates the existence of these organizations. The government’s refusal to design societal structures that demand a more inclusive capital system has resulted in an overburden on nonprofits, who are left to pick up the pieces and provide essential services to those in need. This is a one-sided bargain. Every year, hundreds of nonprofit organizations spend hours responding to funding announcements, justifying their existence amid worsening conditions. Once they are funded, they spend a large amount of the project year managing administrative and reporting requirements rather than focusing on improving services and outcomes.
A Better Deal
It appears to me that the responsibility of increasing the effect of non-profit dollars rests with the funding organizations, not the groups expected to carry out the services. The present system of funding for non-profit organizations is a prime example of wasted resources going after misused resources. Government bureaus, private foundations, and corporations ask non-profit organizations to utilize their resources and proficiency to mend the gaps in society without a promise to guarantee that the problem in society that necessitated the repair has been solved. Housing organizations reduce the strain on people excluded from the housing market only to return them to the market whose costs have risen even higher. When aid ends and those people are not able to be successful in a market that has grown in its disparity, the creators of the system and market propose that it is somehow the efficiency of the organization that is to be blamed. Why are nonprofit organizations continuing to bear the responsibility of picking up after a society that refuses to change? Why should a housing organization accept money to “reduce homelessness” when they know that there is no housing stock that meets the definition of safe, affordable, and decent?
Accountability Ethics Evolved
Accountability ethics refers to the ethical principles that organizations must adhere to ensure that their resources are being used responsibly and ethically. These principles include transparency, responsibility, integrity, and fairness. Nonprofit organizations should hold their funders to the same principles. Their resources are not being used responsibly and ethically if there is no commitment to changing the social environment that perpetuates extreme disparity among its citizens. If you really want to get spicy about it, it is unethical for nonprofit organizations to create a housing program when they know that their participants will never be able to afford to live independently because the economic and housing markets have already excluded them. Of course, meeting them where they are in this situation will not lead to positive outcomes. Organizations can, however, decide to do the real work of being a social enterprise by demanding changes to the market in which it exists. The challenges that nonprofit organizations face is real and evolving in real time. What isn’t evolving are the actions of the main contributors to the hostile social environment: institutional structures and commerce. It’s time to demand shared accountability. It is wasteful to fund solutions to the problems if there is no commitment to resolving the conditions that created the problem!
Justice Evolved is Liberation
Liberated organizations realize that they are the glue keeping society together and while they tirelessly (and lovingly) continue to serve their neighbors, they push against the institutional structures causing the problems. They are not afraid to make full use of their partnerships with funders and demand that they too take up arms in this struggle. Nonprofit organizations exist to infuse justice into systems that operate free from the restraints of considering the human condition. The evolution of that infusion should lead to a liberated society. One in which our duty to respond is parallel to our duty to repair and restore.
Are you a Liberated Organization? I’d love to hear what you’re doing! Check out our course if you want to learn how to become one.