We think about nonprofits all wrong

AIDS Ride founder Dan Pallotta gave an excellent TED talk on why the way we think about charities is all wrong. Click here to watch it.

I couldn't agree with him more. His central premise is how absurd it is that nonprofits are rewarded for how little money they spend on "overhead" activities. He outlines five important areas where we as a society have lost our way regarding nonprofits:

1. We don't compensate employees commensurate with their skill and contribution.
2. We frown upon spending on advertizing and marketing.
3. We don't allow any risk in taking on new revenue generating ideas.
4. We expect money to immediately be used for the cause and don't allow time to build a brand.
5. We don't allow profit to attract risk capital.

I propose adding a sixth point to his list:  We don't invest enough in innovating new solutions and implementing revolutionary approaches.

This is not to say that there is no investment in innovative thinking.  There are some notable and HUGE foundations out there looking to help spur big innovations often proposed by big-time charities.  What we lack is funding for more modest ventures that have big ideas yet are not fully developed or proven.  

There are too few funders willing to look at social sector innovation in the same way a venture captialist may look at for-profit innovation.  Imagine a pool of ideas, all of which show promise but none of which have had the time or support to realize their full potential.  Then, take those ideas and cultivate them, allow them to grow, prune them if they don't prove effective, and reward them if they succeed.  Surely taking this approach will result in a few spectacular ideas.

After all, why would you want to contribute to just one promising idea, when you could invest in a pool of ideas which are all given every opportunity to succeed?  

Find your passion by helping others with theirs

Lately I have noticed a lot of people talking about whether you can find work that feeds the soul.   Intellectually, of course, it makes perfect sense that finding such work is possible.  But how, exactly, are we supposed to find it?  It is not as if job postings come with little notes like "fun and inspirational work" or "meaningful on many levels."  Indeed, if we saw such comments, we'd likely dismiss the postings in the belief that the pay must be so low that the only redeeming values are these intangibles.

If you are in the job market, I'm sure you've heard this pearl of wisdom: "follow your passion and the money will follow."  Yeah, right.  Certainly, if you do things that you are passionate about, you'll be good at them, and eventually people will be willing to pay you.  But, how long will that take? And what exactly is your passion anyway? And where do you start?

No One Ever Says There Are Too Many Small Businesses

I keep hearing about how there are too many nonprofits. Can you imagine that? There are too many little organizations out there struggling on a shoestring budget to do good work for the community. If you hear this enough, perhaps you'll start to think that we've solved all of our community's problems or that there are some undeserving people getting services that they shouldn't.

Of course, this isn't what is meant by "too many nonprofits". What people mean is that there are a lot of organizations doing similar yet uncoordinated work. Perhaps this is true. Maybe the nonprofit providing services to one neighborhood should align its work with the nonprofit in another neighborhood. Maybe there are certain nonprofits that can gain economies of scale by working together. Perhaps they should co-author grants. Perhaps they should share resources and services. Perhaps they should merge. I imagine that there are benefits to many of these solutions.

What I care most about, though, is how the statement "too many nonprofits" impacts behavior, specifically behavior related to innovation. If you believe there are too many nonprofits, would you ever consider supporting the creation of a new one? Would you consider investing your time and money in an innovative idea that may someday grow into an organization of its own?

No one ever says that there are too many small businesses. Indeed, small businesses are touted as the "engines of innovation". We believe that entrepreneurs will go out into the world and try their ideas. Some will succeed, most will fail. In the end, though, some new ideas will thrive, commerce will ensue, and the world will advance.

Where is the analogy in the social sector? Do we believe that innovation will spontaneously occur in the cash-strapped organizations that exist today? I contend that the answer is "No!"

So, the next time you are about to say that there are too many nonprofits, please stop yourself. Perhaps what you mean to say is that there isn't enough exploring of new ways of operating or enough learning from each other. Perhaps you mean to say that there aren't enough people innovating and making the world a better place.

The Case for an Idea Incubator

Since the start of the recent economic recession, the demand for social sector (nonprofit sector) services has expanded while funding sources have contracted.  The sector consists of many small providers which each have their own mission, governance and overhead structure.  Prominent Hartford area leaders publicly state that there are too many nonprofits and call for consolidation in the industry.  Funders increasingly look to support established programs with proven impact and have less interest in funding new programs unless proposed by existing agencies.  At the same time, agencies are squeezed to minimize spending on administration and often lack the capacity to improve processes or conceive of new service innovation.  In this environment, quality administration, service delivery and transformative innovation are nearly impossible to foster and support.

While this situation is ubiquitous across the country, Hartford presents unique opportunities and challenges.  As the center of a region recognized among the wealthiest and best educated in the country, Hartford has a population capable of conceiving of and implementing new approaches to solve social sector problems.  Also, the city of Hartford itself ranks as one of the nation’s poorest cities, and, thus, there is no shortage of need.

CountMeIn!Hartford was founded as an all-volunteer group in 2012 to capitalize on this opportunity by creating a social sector innovation think tank for the Greater Hartford region.   We envision a vibrant Capital City where great ideas that advance the region and its residents are developed, vetted and implemented. 

The CountMeIn!Hartford mission is to inspire, assist and light the entrepreneurial spirit in passionate people so that they successfully discover and ultimately realize their civic vision. We do this by hosting conversations where opportunities and solutions are raised – inspiring passion in participants.  Once that fire is lit, we are a forum that acts as a sounding board and incubator to flesh out plans and next steps.

Why Repurpose Technology

As we barrel along on this little planet called Earth, it's easy to lose sight of the bigger impacts of our actions.  Take technology.  When I was a lad, I recall having the same telephone for years, decades actually.  You'd purchase one of these devices, plug it into the socket in your wall and use it without trouble for a lifetime.  I still have some of those phones, and they still work. 

My, how different technology is today.  You are lucky to get five years of use out of a modern phone "system."  You know these things.  They consist of a base with several satellite cordless phones you distribute around your home.  Sadly, they seem to die early deaths for reasons I cannot comprehend. Or take a mobile phone.  Here we get tremendous media pressure to upgrade every two years.  We do this, like automatons, despite the one-time costs and the long-term contracts.  Then there are computers, laptops, tablets, flat screens, gaming consoles, mp3 players, and the list goes on.  How many of these do we purchase in a lifetime?

How often do you think about what happens to these devices when their all-too-short life comes to a crashing end?  Has this ever influenced a purchase decision?  Are we religious about disposing of these things in environmentally friendly ways?  Have you ever thought about recycling?