Nonprofits Need to Make Smarter Decisions

I’ve had several strong reactions lately to all sorts of news. The #metoo campaign and seemingly never-ending apologies coming from men makes me sad. The dwindling relationship with North Korea has me scared and starting to stock up on water. And the lack of respectable leadership coming from our political parties (all of them) makes me downright disgusted.

But, recently, I got really mad. I was told, off the record, about a nonprofit that had signed a contract for over $50K with a small firm to organize a fundraising event. Eight months after the contract was signed – and 9 weeks before the actual event – the contractor had not done a thing. Nothing. The organization had picked the date, but the contractor had not identified a venue, or caterers or sponsors…. or anything. The organization terminated the contract, but was unable to recoup any of its money. It had made the awful mistake of paying for the contract up front, which was probably the reason why the contractor had no motivation to do any additional work.

The Executive Director and staff managed to pull off a successful event. The room was filled with VIPs and the organization netted a surplus – not a substantial one, but a surplus nevertheless. The Executive Director exudes charisma. She could charm the skin off a snake. She is well respected. And thus, no one is going to ask her about unfilled contracts. No one will press her to inquire why she didn’t consider pursuing legal actions. (I was told that she didn’t want to even bother with wasting the energy on potential litigation, so she just let it go.)

This is the kind of thing about the nonprofit sector that drives me crazy and makes me mad. Despite the fact that it’s unlikely that anyone will know the truth, the organization knowingly threw away over $50K that could have gone towards supporting the community. It could have done some good. Instead, it benefited some contractors that did nothing to further the organization’s cause. This is one of the myriad of reasons why the nonprofit sector gets a bad rap. This is why we hear that “a nonprofit should be run like a business” – because no company in the private sector would ever have paid for the full contract up front.

Nonprofits need to be good stewards of their funds and make smart decisions. All it takes is one nonprofit to squander trust and ruin opportunities for other organizations. And the people who suffer are the ones in need of critical services. Don’t be that organization.

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