The Hard Part(s) in small non-profit organisations (2) – Who pays?

For those who came in lateStart here.

The next hard part is working out who pays for the change you’re working for.

You do

Firstly and most obviously, you do. You’ll pay in what you give up to do it: the better paid work, the hours that could be spent pursuing a hobby, the more glamorous, air-conditioned callings you let go by so that you could do the thing you do.

You’ll pay more direct financial costs too, in the tools you buy, the events you subsidise, the meals you pay for, the extra travel, the little incidentals that are necessary to make things happen.

And don’t forget the emotional labour: the grind of working through failed or incomplete solutions; the transformation that’s almost never quite as complete as you hoped for; the stress of finding ways to pay salaries; the toll of owning the project, of holding others accountable; the more-miss-than-hit search for friends and champions for the project.

You’ll pay.*

Who else will pay?

The reality of the change you seek is this: you can’t afford it.

Donors

A key part – often one of the hardest parts – is finding other people to help you shoulder the cost. This will almost include donors. There are two types of good donors:

  1. Those who care about your vision enough and trust you enough to give general donations, preferably with some consistency over a long period of time;
  2. Those who come with experience, skills and connections as well as enthusiasm and money, and are time rich enough (or well organised enough) to give some of it to you.

Donors are a good thing. But unless you’ve got a billionaire knocking around, chances are that they can’t afford the change you seek either.

Funding Organisations

Large funding organisations often bring as many constraints to your program as resources. The good ones are like a more specific version good donors, and the best ones come with expertise and other resources to share. But at the end of the day, funding organisations get their money from donations too, and have their limits.

Power from the people

It may be counterintuitive in the world of the non-profit, but the fact is that the only type of funding that truly scales is when you take a bootstrapping approach and your clients pay for whatever it is that you do for them. This raises ethical objections for some (Can they afford it? Shouldn’t things this important be free?**) and creates a whole load of short-term headaches and constraints (What sort of value do we need to offer so that the people we seek to serve are willing to pay for it? How can we make something good enough but really affordable?) in exchange for a huge long term payoff: crack this hard problem and future growth will pay for itself. It also works ethical wonders in terms of forcing you to pay very close attention to your clients’ priorities, needs and wants (their actual wants, rather than what they claim to want but aren’t prepared to pay for), rather than what you think they need, and rather than positioning yourself as the go-between in a two-sided market in which you repackage and “sell” the change you’re trying to make to donors rather than focusing on your clients.

All things being equal,*** I presume you want to serve more people with products and services that are closely aligned to their needs and to what they actually want. If so, then you should consider the argument that some things are too important to be free.****

*This is not something people should feel sorry or admire you for – you think it’s worth it, or you wouldn’t do it. Hopefully, you’re right.
**Of course, we must remember that “free” almost always means “free at point of use.” Someone always pays.
***Bearing in mind of course, that all things rarely are equal, and that scale is not its own reward.
****If you find yourself saying “Yes, but not all things work like that,” I agree. The point I’m making – obvious to business people but not always to people in the non-profit sector – is that not all things don’t.

I'd love to hear your thoughts and recommended resources...