Working in the nonprofit sector is not a decision to take a vow of poverty. None choose to work in this sector to get rich, but nor should they be committed to be poor.
By Richard Marker
This post is not a political post about the current president of the United States. It is about foundation behavior. The NY AG case against the Trump Foundation is pretty solid. Not every illegal behavior identified in that suit would typically warrant shutting down a private foundation, but there were so many other egregious and publicly ascertainable examples of self-dealing, political interference, and more that their case is pretty convincing, and worthy of the AG’s actions. It is an important case study for foundation leaders on the parameters of our autonomy and the ethics of our behaviors.
A short few weeks ago, I was interviewed by a major media company regarding the New York Attorney General’s suit against the Trump Foundation. While my content was included in their reporting, other pressing international and national news pre-empted my on-screen version.
However, this post is not about the current President. Enough words are already said and written that I need not add more. Rather it is about the last question asked of me in that interview: “At the end of the day, all of that money went to nonprofits so isn’t that really the bottom line that matters?” Well, it may be true that the so-called foundation money went to nonprofits, but both how it got there and what it was to be used for was certainly not what the law intended, and even more certainly does not justify all of the overt [purported] illegality. In this case, it appears that the means and the end were problematic from the start.
Even these weeks later, I continue to be bothered by the question. I am quite sure that the interviewer fully understood the answer before asking me but felt it important to be on the record to pre-empt a possible viewer rebuttal.
The idea that what we do and how we do it doesn’t really matter if in the end there is a good or responsible or favorable result is, at best problematic. It is problematic to society as a whole, it is problematic ethically, and profoundly problematic for a society based on democratic ideals ruled by an ethical system of laws.
And, given the current state of discourse in the philanthropy world, it is particularly problematic as a mandate for our behavior. To wit [a more promising example]:
In teaching philanthro-ethics to funders, I often use a series of case scenarios. A number of years ago, I added one to challenge us to address inequities in the way nonprofit staff of a grantee or potential grantee are compensated. The case essentially asks us as funders if that inequity is our business and if it is, what is our role.
When I first added this case, at least half of the foundation staff participating in courses or at conferences admitted it was a problem but said it wasn’t our business. Their argument was that to get into that would be micro-managing, and we shouldn’t micromanage. Others disagreed and argued that it could very well be an indication of a problematic organizational culture, especially if the top management was very well paid.
As time has gone by, the number of funders who say that the issue is one of micromanagement has decreased, and the numbers who feel strongly that it should matter to us has increased. Indeed, in a university-based course for funders I taught two weeks ago, not one person felt that the issue was inappropriate for funders to address, although not all agreed about the optimal way to address it.
My own position on this is unequivocal. If we ask about the top 5 salaries [as mandated in tax 990’s in the USA], we should be interested in the lowest salaries as well. I am sure that there are some overpaid executives in our world, but I am even more sure that there are thousands of underpaid ones. If we care about equity, why should the important work of our grantees be done on the overburdened backs of underpaid professionals? We decry the challenges of recruitment and retention but overlook some clear fixes.
How one determines what a fair and reasonable professional wage and benefits should be is beyond the scope of this post. But making sure that we as funders ask the right questions is its scope. And, I am absolutely confident that, if we all asked question about staff compensation, training, retention, and career trajectories, after 2 or 3 years, we would find that nonprofits’ proposals would consistently show that they are addressing it! [We all know that nonprofits get used to answering or anticipating what they think our questions will be.]
Some of you will say that there isn’t money for those kinds of increases – the nonprofits are already budget challenged. True – but whose responsibility is it that nfp’s and NGO’s are adequately funded? Yes – ours. A healthy budget is one that allows for success, not one that guarantees unconscionable personnel conditions. We don’t have to fund everything, but we should make sure that which we do fund has access to the funds they need to succeed. [In past lives, I was CEO of nonprofits, and dealt with this question as long ago as the early 80’s. It was a challenge then, and still is. Any readers who would like some practical suggestions on how to address staff retention, training, and compensation, even in down times, should feel free to contact me directly.]
Just as the big-media interviewer asked me a question at the end so that it would pre-empt an objection, I would like to address one more matter. Working in the nonprofit sector is not a decision to take a vow of poverty. Nonprofit is a legal definition of who ultimately owns the assets and, hopefully, about its purpose. None choose to work in this sector to get rich, but nor should they be committed to be poor. It is a huge sector, responsible for education and health care, as well as religion and human services. And lots in between. Moreover, current public policy puts even more demand on this sector as government funding is reduced or eliminated.
For many years, we funders looked the other way so that our grantees could balance their budgets – and try to achieve goals of serving their populations. If it meant that their personnel – the “means” by which our grantees pursued their goals – were overlooked, that mattered less because the “ends,” the social good, mattered more. What we have learned, I hope, is that those means cannot in the long run be justified.
We all have too much at stake for our involvement in the health of public good and volunteer sector, and the well-being of its professionals, for our concern to be dismissed as micro-management. The ends and the means are always interconnected. This is indeed a case of equity – writ very large.
Richard Marker advises funders and foundations on their philanthropy strategy through Wise Philanthropy, and teaches philanthropists and foundation professionals at both Penn’s Center for High Impact Philanthropy and NYU Academy for Funder Education.