About a third of Americans do not trust that nonprofits can spend the money that is donated to them wisely and in a way that genuinely addresses the purpose of their missions. On top of that, Millennials, who are now between their late 30’s and early 20’s, is a generation of people who naturally don’t trust institutions, including nonprofits. We also live in a world where there is populist energy and more and more people, not only in the United States but also around the world are questioning why there has to be charity at all. At the minimum, some people are saying that the way society views charity has to be changed.
We know that the idea of charity has been with us for generations. In the 20thCentury, charity became more formalized with the efforts of wealthy people such as Andrew Carnegie and John Rockefeller who sought to be more systematic concerning what they felt were their philanthropic obligations to society. Later in the 20thCentury, the business of charity became professionalized as we saw people pursue careers in the nonprofit sector.
Today, we live in a world where institutions, such as government and, yes, even charities are suspect because people are questioning their motives and impact. A global dialogue is taking place concerning whether charity does alleviate poverty, for example. Others are discussing whether major donors are really helping or harming education and students with their philanthropic giving. Professionalized nonprofit organizations have been asking for funds for decades to improve education, end poverty, or to improve medicine; however, people are wondering why it hasn’t happened in many communities at the levels they expect. Why do years pass and the same requests continue to be made? Many wonder, is any impact being made and, if so, at what level?
Social networking and traditional media have exposed how governments have curtailed opportunity, which has increased income inequality. In the United States, since the 2008 recession, a quarter of the population makes less than $10 per hour, which is lower than the federal poverty level. But on the other side of the scale, the top 10 percent earned 50 percent of all the income in the U.S. As this has played out in the media and social networking sites, you’ve got people in the U.S. and around the world in countries such as France and others in Europe and as far away as Taiwan and Egypt, distrusting the traditional systems that have been in place for citizens, including charities.
As all of this plays out, nonprofit leaders are in the process of reconsidering their organizations, and in some cases, even their business models. Some are making a shift and moving away from the traditional nonprofit operation as people demand more accountability, transparency, and opportunity (instead of charity) for vulnerable communities. Social enterprises and corporate social responsibility done by businesses have increased as the paradigm shifts from the traditional views of charity toward creating the opportunity for people to help themselves.
Responsible nonprofit leaders should be looking at what is happening as an opportunity for them to look at how to improve what they’re doing. Today’s leading nonprofit executives understand that their operations have to be predicated on three fundamental values.
- Transparency: The world has shifted, and in all aspects of society, transparency and authenticity are crucial to the continued success for any nonprofit. Guidestar, one of the largest organizations seeking to help donors give their money to groups that are making a social impact by deconstructing what it means to support a nonprofit, has created a ranked rating system. The ranking is simple with platinum, gold, silver, and bronze. Nonprofits that have obtained the Guidestar seal have experienced a bump in fundraising dollars of 53 percent because Guidestar helps donors determine which nonprofits are worth the effort for financial support.
- Impact: One of the reasons that some people distrust nonprofits is because they’re not clear about the impact an organization is making. Gone are the days when people took words and good intentions at face value; today, people need proof. There are plenty of resources for nonprofits on setting out to measure impact in a meaningful way. The company, Whole Whale, has a simple guide that you can use to get started on demonstrating the results you’re making in your community.
- Equity:For many years, there has been a social conversation about diversity and inclusion, but in the last few years, there’s also more of a discussion about equity. Nonprofit leaders that don’t want to be caught flat-footed have to ensure meaningful diversity, inclusion, and also equity. For instance, it’s a lot tougher in the current environment for nonprofit organizations to have full-time staff working with salaries that are less than competitive. It’s also harder for groups to say they are diverse and not demonstrate with their teams but more importantly, in board and executive leadership.
We are all operating in a new world that is continually being redefined, and more importantly, reinterpreted. It’s affecting every element of society, including the nonprofit sector. It’s vital for nonprofit leaders to rethink how they do business and ensure that they are communicating both to their teams and also their supporters that they understand the values of the modern age, as well as the priorities for people.
Author of “Not Your Father’s Charity: Grip & Rip Leadership for Social Impact” (Free Digital Download)
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