Unseen elves in shoemaker charities

27 May

ImageAs a child, I heard the story of the shoemaker, whose work was done overnight by a pair of hardworking elves. The elves demanded no payment, got the work done to perfection, and remained unheard and unseen.

The reason I’m in a fairy-tale kind of mood this morning is a report on economic bullying that reminds me of the elves and the shoemaker. Dione Alexander on the Chronicle of Philanthropy blog, talks to the writer of the report about the forms economic bullying takes in nonprofits. His answer is telling. “Because nonprofits haven’t clearly articulated their value to society or, in many cases, what it costs them to provide that value, they have developed the bad practice of paying people as little as possible. Philanthropy, for its part, tends to reward those organizations with the lowest investment in human resources while simultaneously creating programs aimed at lifting underpaid laborers such as immigrants, single parents, and veterans out of poverty.” 

Non-profits have staff. Indeed, if they need to get things done, they need to have talented, efficient and inspired staff. Much like the shoemaker needs his elves. I get it; you get it.

But many donors don’t seem to get it. They ask that the staff at nonprofits remain underpaid (unpaid, if they can get away with it) and unseen.

  • “I will support your cause – but make sure 100% goes to the program.”
  • “I will not support administrative costs, utility bills or salaries.”
  • “Make sure your admin costs are less than 10% of your overall spend.”

Such demands lead to creative accounting that is just not helpful, just in order to report sub-10% spends on admin. Rather than foster a climate of openness and transparency, such demands do just the opposite.

So on the one hand, demands for results and efficiency in nonprofits escalate; while on the other, there is pressure to keep overheads low. How can charities hope to lure excellence and talent with peanuts for salaries?

I’m not advocating non-profit extravagance with this post. I’m not asking you, the donor, to pay for an Audi for the charity’s CEO. But don’t quibble about salaries. If the programme you support with your hard-earned money is implemented by competent staff hired and paid at market levels, chances are you’ll recover your investment sooner in social change.


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