It's time to change the way we think about and fund nonprofits

I've worked in the nonprofit sector for more than 20 years. I've learned, mostly through hard knocks, good and bad practices. I believe that this sector has been held back by some of the accepted practices that have guided it for decades. How many times have you heard people say, "I'd donate to such-and-such organization but their overhead is too high?" What exactly do you think of as overhead? When a business invests in itself, sometimes at a loss, to grow and make a bigger impact, it is lauded as best practice. But when a nonprofit, with a mission to make a social impact, spends more than 25% of its revenue on salaries, it is viewed as inefficient and not worthy of donations or investments. There is also an issue with how funding organizations are structured in a way to help wealthy philanthropists make major gifts for major tax deductions but they dribble out grants to nonprofits based upon a small portion of the gift, thus completely watering down the potential impact of that philanthropy. Yes, there are places for endowments, but sometimes a million dollars can make a huge impact on society--much more so than a lifetime of $40,000 a year proceeds. And don't get me started on boards. I love serving on boards and I love managing boards and each one has its own personality and flavor. But what is their role in the daily operations of a nonprofit? And are they responsible for the revenue stream? These are topics I love to talk about and will write about in future posts.