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Tough Talk about Restricted Gifts

If you work for a foundation that provides restricted funding, hold on tight. This is a conversation we need to have.

I have a colleague who shared with me this part of a rejection letter she just received:

The foundation board appreciates that the XYZ program requires staff in order to function; however, we much prefer to fund equipment or other non-salary expenses, not including wages. Your request suggests that the majority of funding would be for wages. The foundation is unable to agree to support this request.

Ladies and gentlemen of foundations, we’ve got to change this. We all want general operating funds, don’t we? A couple of questions for you to ponder:

  1. Do you care how much a restaurant spends on rent or electricity, or just on how good the food and service are?

  2. When firefighters are putting out fires, do you ask them how much water they used on a particular fire?

Despite the many arguments, statistics, stories, non-profits are still plagued with messages like #’s 1 & 2 above—a sign that general operating funds are being overwhelmingly refused.

At Rescigno’s, we feel your pain and frustration.

That’s why something new has to be proposed. How about trying this rebuttal the next time you get a refusal for general operating:

It is general operating funds that give us the flexibility to be most effective at helping people, including improving and saving lives. Restricting funds impedes our work…greatly. Therefore, respectfully, your philosophies and policies result in people getting hurt and dying.

This sounds like an exaggeration and you would never say exactly this, BUT is it really that much out of line with the truth? Let me share the following to spotlight how serious this issue is:

A non-profit friend of mine told me that his wife, a case manager doing teen suicide prevention and other trauma work, burned out and quit. At her agency, the normal caseload was 50. She had a caseload of 150. She would take files home and work late into the night and on weekends. Everyone trusted her to provide support. Days off would find her comforting someone just a step away from ending his or her life.

That organization needed to hire more case managers. They never could. Because of a lack of funding, in this case for more staff, a brilliant and dedicated case manager was lost. And who knows how many lives were affected by her leaving the profession.

There are endless stories of non-profits not being able to invest in the staff and resources needed because of many funders’ arbitrary and outdated beliefs.

For so long non-profits have treated restricted funding as something that must be borne, like an overwhelmingly heavy burden. Maybe now is the time to make the argument that if something directly or indirectly leads to harm or the death of innocent people, and you the grantor know about it but refuses to change, that is both unethical and immoral.

Imagine going to a doctor and saying, “I know you are helping a lot of people and I do want to support you, but you must agree to use only my pre-approved equipment on your patients. That’s all I’ll pay for. And I won’t be paying for salaries for more doctors to do more good.”

Goofy, right? What about ethical? I don’t think so. Do you know more than the doctor does? Is it ethical to restrict his funding and make demands that may cause people to die?

My point, of course, is that we don’t tell doctors or carpenters or mechanics or other professionals how to do their jobs, but in the non-profit world it’s done all the time.

When funding is restricted, a clear message is sent: We don’t trust you to know how to do your job. Not only that, we probably know better how to do your job than you do.

The importance of flexibility and freedom is really vital when it comes to funding for staff. There’s so much delay, so much lack of respect among those who fund to pay salaries. But 95% of the work that’s done is by people. Critical issues are being taken care of by professionals in our sector of fundraising. Not machines, people. If you are a fundraising professional, you do incredible, sometimes very complex work.

When a grantor says to you, “The foundation prefers to provide funding toward equipment or other non-salaried expenses, rather than toward wages,” you could very well say any of the following:

  • "Do you mean to say that your foundation is ok with kids dying of suicide?”

  • "Are you implying that you’re ok with seniors being abused?”

  • “You’re really ok with domestic violence?”

Harsh? Maybe, but unless foundations are offered some pushback, or perhaps the more judicious word might be feedback to their decisions, how will they ever even consider changing their policies?

These mindsets of foundations that grant money so that non-profits can have impact need to know that archaic and destructive policies are ineffective when it comes to addressing injustice and inequity. When will they realize the importance of being equal partners with non-profits?

What would this realization result in? For starters, not assuming that they know more than you do about your job, the job that consumes you and your staff on a daily basis. It involves trusting you to respond to changing circumstances because injustice can come from anywhere.

If you agree that nonprofit organizations should be spending their time helping people, if you agree that there is an urgency to the work that you do, please provide general operating funds and allow us the trust and flexibility to do our work.

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