Money and Mission: Staying on Mission; Funding Operations

Here is a link to a superb TED talk – on funding for non-profit agencies. 

From this short, brilliant presentation, two things need to be emphasized.

First, that we cannot deliver on the mission of an organization without adequate – actually, not just adequate, but a fully staffed – overhead.   Without infrastructure, without overhead, without a full complement of administrators, the mission does not happen.   Organizations will often, as part of their fund-raising, insist that they are very lean on “overhead”.    Thus, for example, when I worked for reSource Leadership it was our policy and practice that 15% of all donations was allocated towards operations – the administrative costs of the organization.  I received numerous complaints about this “tax” on someone’s charitable giving.  They wanted us to be like another organization that said that 100% of their contribution would go towards the cause and literally nothing to overhead.   

But wise and savvy donors know that their contribution will only be effective if the organization is will managed.   And this means overhead; it means an operational expense.  And if the cost from operations is not coming from the charitable donations, it is coming from somewhere.  But I am suggesting that we need to educate donors so that they are savvy institutional thinkers and actually insist that 15% is a bare minimum an actually challenge us “can you really deliver on the mission if that is all you are assessing on my contribution?”   Operational expenses and costs – overhead, administration – is essential to missional effectiveness.   Yes, of course, we need to be lean in order to be effective.   We need to routinely and consistently review the expense side and ask if we could do this more efficiently.   But frugality is death to mission effectiveness.   We need to be astute, but not confuse lower administration costs with greater mission effectiveness. 

And second, this TED talk by Dan Pallotta is timely for those of us who need to keep our eyes on the vision – on where we need to be in two, four or even ten years.   Do not settle with less when through patience and perseverance you can achieve something that in time and over time can make a substantive difference.  Stay the course.  Not in a pig-headed way when clearly the organization needs to downsize and re-structure.  That is not what I am saying.  We need to adapt and restructure and perhaps cut expenses here or there . . . but the main point is that this needs to be guided by the mission and that thus we always keep alive in our minds what it is that is “mission critical” and thus essential to our organization’s long term impact.