News from the Noteworthy by Opportunities for Otsego

Non-profits Subsidizing the Government

I recently read an article on a non-profit blog titled “Non-profit Math.” It was a humorous inside look at how math actually works in the non-profit world. One example is how a non-profit will spend $10,000.00 in funds and staff time to raise $5,000.00 at a fundraising event. Another is spending $20,000.00 to do a search to replace an employee who asked for a $5,000.00 raise and quit when refused. The writer gave examples that aren’t meant to be taken seriously but, at the same time, makes some good points.

Here’s one of my own that I have been pondering for a while. Instead of implementing a cost of living adjustment based on a percentage of each employee’s pay, take the total cost of the COLA and divide it equally by the number of employees in the organization. Then give each employee that same amount of pay increase. This way, organizations can begin to close inequities in their wage scales. Of course, practically speaking, it opens up a whole plethora of other problems, but you get my drift.

Here’s another one. “When a funder requires $2,000.00 of staff time to write and report on a $1,000.00 grant.” One more. “Expecting non-profits to act more like businesses when for-profits fail at a rate of 50 percent within five years and 70 percent within 10 years.”

From my own experience, organizations think in terms of striving to be frugal, managing contracts to demonstrate good fiscal responsibility. But if a grant is underspent, instead of being permitted to carry over the funds to the next year, we are admonished by funding sources to “go out and spend that money and don’t ever underspend your grant again.”

Then there is the one example in the blog that really caught my attention. It had to do with government reimbursements that, let’s say, average .75 cents on the dollar. It got my attention because so many services in our community depend on government reimbursements which are often not calculated until after the services have been provided. So, as the article points out, organizations are subsidizing the government while doing the work that the government should be doing.

Again, this blog I refer to is not to be taken literally, but humorously, although the examples lend themselves to much larger problems in that non-profits and local communities must bear the burden of solving complex human issues without strong national initiatives to provide aid and assistance. Especially in rural communities. If our country gives away 10 trillion dollars in corporate tax credits, under the guise of economic development, surely it has the resources to help local communities with addiction, mental health, and safe, adequate, affordable housing.

Dan Maskin is chief executive officer for Opportunities for Otsego, Inc.