Years ago I interviewed for a job and during the process I was told the salary was based on the pay grid of school teachers in the region. That was quite appealing, but the actual salary offered was quite a bit less. It seems the salary grid was a basis only in terms of being something they looked at, cut down by 25%, and then modified by several other factors. It was a disappointing aspect of an otherwise very exciting opportunity.
In the years since that event I have encouraged many young adults when they pursue work in nonprofit and ministry roles that the taboo discussion about compensation should be surfaced very early in the process and with frank openness. Not doing that creates the potential for people to invest significant time and energy in a recruiting process that ultimately becomes pointless and frustrating when something so simple as dollars is finally revealed.
One of the causes is a cultural expectation in church circles that is someone is "called" to a role they will trust God to provide for them. To even ask the salary is somehow inappropriate and unspiritual. After all, we don't do this kind of work for the money...
Just once I'd love to hear a candidate turn that around and ask the search committee if they are willing to be the ones to act in faith and place a generous full year's salary in a designated account because they trust God to provide the needed resources.
This does relate to Catalyst. When we are approached by leaders and organizations who are interested in applying for our funding there is some risk that I can give the impression that we are likely to offer support when we really are not. I realize that in our current funding cycle I may have done this inadvertently, simply because our strategies are becoming more apparent as we work through applications.
Today in a conversation with a new contact I was complimented for my honesty when I explained that I thought it unlikely that we would be interested in supporting the projects under discussion. Apparently it isn't common for donors to do this.
It should be.
Showing posts with label ethics. Show all posts
Showing posts with label ethics. Show all posts
Tuesday, September 23, 2008
Saturday, July 19, 2008
Real Costs
Why can't the organizations I meet with each week tell me the real cost of their programming?
Time and time again I have conversations in which people who are hoping to receive support from Catalyst explain their desire to offset some of the fees required by their participants, but need to be prompted to explain the difference between those fees and the total cost of providing their services.
This is a problem for several reasons. While it is admirable to minimize the charge for helping people (though discerning the appropriate limits of that will be the subject of several future posts), it is often a path to unnecessary difficulties.
In our contemporary North American culture the value of most things is determined by the amount someone will pay for them. Charging less for a workshop or program than it actually costs to provide practically diminishes the worth. The examples of this are numerous. If we want people to respond to our efforts we are generally better off making them aware of the expense involved in providing them.
Fundraising is one of the most demanding and time consuming aspects of most nonprofits. Time, strategy, and effort invested in this area is exhaustive and frequently exhausting. Failure in this area can spell the untimely end of otherwise outstanding organizations. Dealing in the real costs of our programs is beneficial here.
When approaching possible funders, telling us your program charges (for example) $700/participant gives us that as a benchmark wheen we consider potential grants. If your real cost is $1000/participant you've potentially decreased the scale of your grant by 30%. (Please note: foundations also have operating and administration costs and like you we try to minimize them. We aren't surprised or offended when you acknowledge them as part of your needs).
The more difficult matter when it comes to fundraising is one of scale. Most effective nonprofits are in some way interested in growing. But if we are operating at a deficit for every participant than every bit of expansion creates a larger hole for funding to fill. That may be a legitimate approach, if it is acknowledged properly, but a failure to deal in real costs makes this more challenging.
Determining real costs can be quite simple. Dividing the organization's total operating budget by the total number of participants gives a workable figure.
None of this is to suggest that we must charge participants the full cost of the program. Our suggestion is to openly reference the real cost of providing our services and the amount that is being subsidized (regardless of whether that subsidy is through a direct sponsorship or through the fundraising efforts of the organization). Those who are able to pay the full cost of their program can do so, those requiring assistance can receive it. This is a strategy that may add an additional administrative loop, but may also provide additional funds through increased program funds.
Most importantly, dealing in real costs is simply honest. It allows all the stakeholders (funders, staff, participants, etc.) to know and respond to the full story of our work. There is great value in what we're providing to society, let's not be bashful about it.
Time and time again I have conversations in which people who are hoping to receive support from Catalyst explain their desire to offset some of the fees required by their participants, but need to be prompted to explain the difference between those fees and the total cost of providing their services.
This is a problem for several reasons. While it is admirable to minimize the charge for helping people (though discerning the appropriate limits of that will be the subject of several future posts), it is often a path to unnecessary difficulties.
In our contemporary North American culture the value of most things is determined by the amount someone will pay for them. Charging less for a workshop or program than it actually costs to provide practically diminishes the worth. The examples of this are numerous. If we want people to respond to our efforts we are generally better off making them aware of the expense involved in providing them.
Fundraising is one of the most demanding and time consuming aspects of most nonprofits. Time, strategy, and effort invested in this area is exhaustive and frequently exhausting. Failure in this area can spell the untimely end of otherwise outstanding organizations. Dealing in the real costs of our programs is beneficial here.
When approaching possible funders, telling us your program charges (for example) $700/participant gives us that as a benchmark wheen we consider potential grants. If your real cost is $1000/participant you've potentially decreased the scale of your grant by 30%. (Please note: foundations also have operating and administration costs and like you we try to minimize them. We aren't surprised or offended when you acknowledge them as part of your needs).
The more difficult matter when it comes to fundraising is one of scale. Most effective nonprofits are in some way interested in growing. But if we are operating at a deficit for every participant than every bit of expansion creates a larger hole for funding to fill. That may be a legitimate approach, if it is acknowledged properly, but a failure to deal in real costs makes this more challenging.
Determining real costs can be quite simple. Dividing the organization's total operating budget by the total number of participants gives a workable figure.
None of this is to suggest that we must charge participants the full cost of the program. Our suggestion is to openly reference the real cost of providing our services and the amount that is being subsidized (regardless of whether that subsidy is through a direct sponsorship or through the fundraising efforts of the organization). Those who are able to pay the full cost of their program can do so, those requiring assistance can receive it. This is a strategy that may add an additional administrative loop, but may also provide additional funds through increased program funds.
Most importantly, dealing in real costs is simply honest. It allows all the stakeholders (funders, staff, participants, etc.) to know and respond to the full story of our work. There is great value in what we're providing to society, let's not be bashful about it.
Tuesday, February 12, 2008
The Ethics of Charity
Philanthropy is inherently a matter of ethics. We choose to give to and support people and organizations that reflect what we consider to be “good” or “right”. In doing so, we believe that we are also doing “good” and “right”. It’s not a huge stretch to see a certain arrogance in this. Who are we to judge what is ethical? If we reduce it to a matter of what we like or find agreeable we fundamentally abandon our responsibility to the larger community.
But if philanthropy is ethical, it becomes also theological. Ethics without theology is completely negotiable and uncertain. As I begin my immersion in this field I seem to be coming across a lot of “good” being done with no basis in any external framework or belief beyond “charity”. To me that’s not enough.
I believe in a reality that is more complete than what I can see. This doesn’t devalue everything around me, it gives it all a sacred context. I seek to do “good” in the world because I believe at my core that it reflects the passion of the Creator and brings me, our partners, and those they serve more into unity, not with some vague and poetic sense of spirituality or goodness, but with a very real and specific God who desires to be revealed and responded to.
It is this conviction that makes it possible for me to approach philanthropy with sincere hope and a sense of justice. We are seeking to participate in making right some of the myriad things that have gone wrong because all of us have selfishly believed that we could function as independent arbiters of what is “good” and “right”.
I also acknowledge that there is always a humility required for theology. I can only know God through my experience of His revelation and my own responses. This requires that I continue to pursue an active relationship wherein I am progressively transformed into the man he dreamed of me becoming when he made me.
But if philanthropy is ethical, it becomes also theological. Ethics without theology is completely negotiable and uncertain. As I begin my immersion in this field I seem to be coming across a lot of “good” being done with no basis in any external framework or belief beyond “charity”. To me that’s not enough.
I believe in a reality that is more complete than what I can see. This doesn’t devalue everything around me, it gives it all a sacred context. I seek to do “good” in the world because I believe at my core that it reflects the passion of the Creator and brings me, our partners, and those they serve more into unity, not with some vague and poetic sense of spirituality or goodness, but with a very real and specific God who desires to be revealed and responded to.
It is this conviction that makes it possible for me to approach philanthropy with sincere hope and a sense of justice. We are seeking to participate in making right some of the myriad things that have gone wrong because all of us have selfishly believed that we could function as independent arbiters of what is “good” and “right”.
I also acknowledge that there is always a humility required for theology. I can only know God through my experience of His revelation and my own responses. This requires that I continue to pursue an active relationship wherein I am progressively transformed into the man he dreamed of me becoming when he made me.
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