Comments on: The Double Standard for Nonprofits and For-Profits http://www.nonprofituniversityblog.org/2008/03/the-double-standard-for-nonprofits-and-for-profits/ A blog for the business of nonprofits Tue, 22 Nov 2011 18:39:53 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: thomas http://www.nonprofituniversityblog.org/2008/03/the-double-standard-for-nonprofits-and-for-profits/comment-page-1/#comment-370 thomas Fri, 04 Apr 2008 16:38:23 +0000 http://www.nonprofituniversityblog.org/?p=35#comment-370 Surely the nonprofiteers are cheering loudly in their stands as they should be. Though it is not exactly correct to say that donations can't go to pay the electric bill: for two reasons. 1) Most non-grant donations (annual appeal, annual gala, annual auction, direct mail and online solicitations etc.)are unrestricted and can go toward the electric bill. 2) The standard grant does take into account "overhead," although the average percentage going to overhead (12%) is not nearly enough to run a "company." Also Karen says "not one penny" can be spent on salary or bills, but it can if you write them into your grants. If you can justify salaries (for example teachers salaries) as part of the programmatic expense you're golden. If your ED, program director etc. spends time/effort implimenting programs, write that cost into the proposal. I think the real answer to your double standard question, "Then how come everyone doesn’t know that if the electric bill isn’t paid the hungry don’t get fed, and that, therefore, a share of the price of feeding the hungry must go to pay the electric bill?" Is because the "buyers" of the nonprofit "meal" never actually eat it. They are giving a "meal" to someone else and they simply want the person fed. They don't understand that food alone will not eliminate hungry people (even if we factor out all the non-eating related causes of hunger, i.e social inequality etc.) It is our job to get them to "eat" the meal they buy. Explain to them that a source of food alone is not enough to feed the hungry. One needs to 1)find a way to let the hungry know where the food is (marketing), 2) get them to the food or vice versa (Transportation), 3) create a balanced meal (program planning), 4) cook and plate the food up (administration), 5) store the leftovers (PP&E), and 6) Make sure new food comes in to replace that already eaten (Fundraising) . But thankful for small favors, at least we dont have to create the hungry (the sneeker companies are already doing that for us)! I love the blog, and hope that you can add an RSS feed soon! Surely the nonprofiteers are cheering loudly in their stands as they should be. Though it is not exactly correct to say that donations can’t go to pay the electric bill: for two reasons. 1) Most non-grant donations (annual appeal, annual gala, annual auction, direct mail and online solicitations etc.)are unrestricted and can go toward the electric bill. 2) The standard grant does take into account “overhead,” although the average percentage going to overhead (12%) is not nearly enough to run a “company.”

Also Karen says “not one penny” can be spent on salary or bills, but it can if you write them into your grants. If you can justify salaries (for example teachers salaries) as part of the programmatic expense you’re golden.

If your ED, program director etc. spends time/effort implimenting programs, write that cost into the proposal.

I think the real answer to your double standard question, “Then how come everyone doesn’t know that if the electric bill isn’t paid the hungry don’t get fed, and that, therefore, a share of the price of feeding the hungry must go to pay the electric bill?” Is because the “buyers” of the nonprofit “meal” never actually eat it.

They are giving a “meal” to someone else and they simply want the person fed. They don’t understand that food alone will not eliminate hungry people (even if we factor out all the non-eating related causes of hunger, i.e social inequality etc.)

It is our job to get them to “eat” the meal they buy. Explain to them that a source of food alone is not enough to feed the hungry. One needs to 1)find a way to let the hungry know where the food is (marketing), 2) get them to the food or vice versa (Transportation), 3) create a balanced meal (program planning), 4) cook and plate the food up (administration), 5) store the leftovers (PP&E), and 6) Make sure new food comes in to replace that already eaten (Fundraising) .

But thankful for small favors, at least we dont have to create the hungry (the sneeker companies are already doing that for us)!

I love the blog, and hope that you can add an RSS feed soon!

]]> By: Karen http://www.nonprofituniversityblog.org/2008/03/the-double-standard-for-nonprofits-and-for-profits/comment-page-1/#comment-365 Karen Thu, 03 Apr 2008 18:00:34 +0000 http://www.nonprofituniversityblog.org/?p=35#comment-365 Boy I'd love for some foundation execs to read this blog entry. Not only are non-profits expected to account for every dime spent (and ensure the donors that not one penny was spent on a salary or a bill) but now they are also expected to undergo evaluation after assessment after evaluation. The situation is bordering on the absurd. What is this about?? Boy I’d love for some foundation execs to read this blog entry. Not only are non-profits expected to account for every dime spent (and ensure the donors that not one penny was spent on a salary or a bill) but now they are also expected to undergo evaluation after assessment after evaluation. The situation is bordering on the absurd. What is this about??

]]> By: Sheldon http://www.nonprofituniversityblog.org/2008/03/the-double-standard-for-nonprofits-and-for-profits/comment-page-1/#comment-335 Sheldon Sun, 23 Mar 2008 11:49:59 +0000 http://www.nonprofituniversityblog.org/?p=35#comment-335 I think that the sentiment in this post was on target. The perspective on the funds we give to a for-profit versus a non-profit needs to change. It costs the same to power a light-bulb in an office no matter whether they are for or non-profit. However, I think it's a bit shortsighted to not take into consideration the tax breaks the non-profits receive and the duty to which they are inherently called. When we pay for "shoes" at a for-profit we probably aren't doing it to specifically fund their shoe making efforts, or because we think there should be more sneakers in the world for example. In contrast, when we give to a non-profit it is for the specific purpose of furthering their mission and supporting their efforts to provide those who need "shoes" with "shoes". Again, it IS ridiculous for people to want to donate to non-profits and not want to help cover overhead. I know many people who would LOVE to work in the non-profit sector but simply can't afford to because of the salaries and benefits that are being offered. Considering human nature's way of "making things fun", I think one piece of the solution is creating more for-profit social-ventures that use a portion of their profits to support social causes to take some of the burden off of the non-profits. For-profit and non-profit need to work more closely to make sure the benefits of each business model is being optimally distributed over the issues that need to be addressed. I think that the sentiment in this post was on target. The perspective on the funds we give to a for-profit versus a non-profit needs to change. It costs the same to power a light-bulb in an office no matter whether they are for or non-profit. However, I think it’s a bit shortsighted to not take into consideration the tax breaks the non-profits receive and the duty to which they are inherently called. When we pay for “shoes” at a for-profit we probably aren’t doing it to specifically fund their shoe making efforts, or because we think there should be more sneakers in the world for example. In contrast, when we give to a non-profit it is for the specific purpose of furthering their mission and supporting their efforts to provide those who need “shoes” with “shoes”. Again, it IS ridiculous for people to want to donate to non-profits and not want to help cover overhead. I know many people who would LOVE to work in the non-profit sector but simply can’t afford to because of the salaries and benefits that are being offered.

Considering human nature’s way of “making things fun”, I think one piece of the solution is creating more for-profit social-ventures that use a portion of their profits to support social causes to take some of the burden off of the non-profits. For-profit and non-profit need to work more closely to make sure the benefits of each business model is being optimally distributed over the issues that need to be addressed.

]]> By: Tom Durso http://www.nonprofituniversityblog.org/2008/03/the-double-standard-for-nonprofits-and-for-profits/comment-page-1/#comment-282 Tom Durso Sun, 16 Mar 2008 10:24:38 +0000 http://www.nonprofituniversityblog.org/?p=35#comment-282 Thought-provoking stuff, Laura, and much of it on-target. Though I'd argue that high executive compensation in the for-profit sector is getting viewed more and more skeptically, especially now that the economy is in such weak shape. Thought-provoking stuff, Laura, and much of it on-target. Though I’d argue that high executive compensation in the for-profit sector is getting viewed more and more skeptically, especially now that the economy is in such weak shape.

]]>