Tension between Nonprofit Leaders and Funders?

There is a natural tension between nonprofit leaders and funders created by the power dynamic. As in: funders have the money, and nonprofit leaders need it. And they really need it. For most, leading a nonprofit is not a job or even a career. It’s a calling. It’s deeply personal. And they can’t achieve their vision without donors’ support. They are laying everything they have on the line in hopes of creating a better world, and they can’t do it alone. They become nervous because losing has consequences. Especially for the CEO or ED, where the buck stops. Less funding means less impact and having to fire staff who have also committed their lives to the mission.

But guess what? Many donors feel the exact same way. While they have the financial resources, they often don’t have the program expertise. They are dependent upon you to design and run great programs. They often don’t understand the target population. And they often feel similar trepidation when working with nonprofit leaders. They don’t want to say the wrong thing and be offensive or seem too challenging.

The problem with this situation is two–fold. First, it creates unnecessary stress for all involved, and second, it reduces efficiency and undercuts impact. Before becoming Executive Director of the Boys and Girls Clubs of the Peninsula, I had a business career in NYC, Boston and Silicon Valley. I also did some philanthropy as a limited partner in Legacy Venture, as a member of SV2, and as an alumnus of The Philanthropy Workshop West. I am also a senior fellow in American Leadership Forum. I’ve been fortunate to see this problem from all angles.

So what can we do? The most important step is to appreciate that everyone cares. Everyone is trying to make the world a better place. Yes, funders haven’t devoted their entire lives to our causes like we have, but they still care deeply. Our country has lots of challenges today, especially with increasing stratification and a growing opportunity gap. And funders, by definition, are on the opposite side of the wealth gap than most nonprofit staff. But these are the good guys. These are the folks who want to share their wealth with others, who realize the need to give back. They care.

I have been in many meetings between Board members and staff where the Board member says something in a mildly insensitive way and the staff get upset. This is totally unconstructive. Remember, these are the good guys. If the donor didn’t care and was mean spirited, why is he donating his time and money to your mission? Yes, he probably expressed himself in a clumsy way, but don’t let yourself get sidetracked by that. I remember when I first joined BGCP from the business world. After one meeting, a staff gave me a full page of words I shouldn’t have used in just that one meeting. I was stunned. But I appreciated her taking the time to tell me and to help me do better. Most donors never receive that feedback.

Let’s take a step back, see the big picture, and embrace our donors as the good guys. Nonprofit leaders: Own your power. Stand up for what you believe. You are the program expert. View the donors as partners. Put away the tin cup mentality and find win-win relationships. Recognize that the donors need you. They have goals and need an organization like yours, and a leader like you, to translate their dollars into impact. They don’t know how to do it or don’t have the time to do it. You need each other. Approach donor interactions as equal partners.

Be transparent. I can’t tell you how many times I’ve heard of staff talking about what to share with donors or Board members. The answer is simple: whatever they want. Donors care 90% about how staff is thinking about our mission and what questions we are asking. They are rarely fixated on past results.

They want to invest in teams that have a compelling logic model, are asking good questions, and learning as they go. Stop overselling. Too often staff puts unnecessary and unconstructive pressure on its organization to delivery unrealistic outcomes. Donors care much more about the logic behind the goals than what the actual number is.