Robbing Peter to Pay Paul
Tuesday, July 14, 2020
Posted by: Kari Cronbaugh-Auld, MSW, GPC
During my experience working for and in partnership with nonprofit organizations, I found one common thread among all: the perpetuation of a “scarcity mindset” This mindset is based on the idea that nonprofits exist to help others in need and serve the greater good; therefore, staff and anything they might need to do their jobs (salaries, benefits, training) is often last on the list of funding priorities.
Although the scarcity mindset originated when nonprofits where known as “charities” and run solely by volunteers, things are more complex now and competition for funding is high. Finance, grant, and other professionals must be knowledgeable and highly competent. How else can they raise funds needed to run the organization and ensure these funds are spent as intended? (This is what funders say they want, right?)
Administrative and support staff (CEOs, finance, grant professionals, etc.) tend to be most affected by the scarcity mindset because they are considered “overhead.” These staff are the “Peters” of the nonprofit world, often robbed of appropriate salaries and benefits because their nonprofit must adhere to overhead cost guidelines set by the funder, or “Paul.” This mindset is often unintentionally perpetuated by everyone involved in the day-to-day lives of nonprofits: funders, boards, management, and even staff themselves.
I have witnessed nonprofit staff wear their lack of salary and/or benefits as a badge of honor. I have never heard employees in the for-profit world do this. I have heard proud board members spout about the humble beginnings of their organization. “Back in the day, one volunteer worked 100 hours per week, riding a bicycle with one flat tire…” Ok, I’m exaggerating, but you get the point. Scarcity is glorified. How do nonprofits attract altruistic, dynamic, knowledgeable, professionals who have high-impact community connections if their board members glorify scarcity and refuse to offer competitive salary options and benefits?
Thank goodness there are people who have a drive to help others every day of their lives through nonprofit work. Does this mean they should have to choose between their altruism and sending their kids to college or having quality health insurance? Foundations and donors should expect nonprofits to use their funds efficiently and effectively to do the most good in our communities, but the scarcity mindset has no place alongside this expectation.
The federal government negotiates individual indirect cost rates with grantees based upon their specific budget needs, proving there is a different way to address indirect costs. It is up to professionals in the world of non-profits to talk with funders who support our organizations and invite candid conversations about funding practices that are not working. This approach could stop funders from undermining non-profit goals by forcing a rob-Peter-to-pay-Paul scenario. The result could help ensure non-profit professionals’ access to equitable health care and living wages.
It is time to ask yourself, how does your organization perpetuate the scarcity mindset through its internal policies? How can you shed light on this practice and introduce ideas for change within your organization and your funding community?
Author Bio: Kari Cronbaugh-Auld has a master’s in social work from the University of Kansas and is a GPC. She has over 25 years in children and family social services and 11 years writing state, federal, and local foundation grants. Kari lives in Olathe, Kansas, and is a member of the Heart of America GPA Chapter.
Theme: Changing Non-Profit and Foundation Organizational Cultures to Honor the For-Profit value of Non-Profit PRofessionals
GPC Competency: 02. Knowledge of organizational development as it pertains to grant seeking