By Henry Berman, Exponent Philanthropy
Today, along with 20 other organizations representing the breadth and depth of those who serve the nonprofit sector, Exponent Philanthropy added our name and support to the Investing in Infrastructure letter being shared with the foundation community. The letter clearly articulates the case for support, and I urge you to take the time to read it, digest it, and act.
Over a year ago I wrote in this space about the importance of funding overhead:
Call it overhead. Or administrative expenses. Look for it as a line item in a proposal or perhaps as a request for general operating expenses. That really doesn’t matter. What does matter is that funders—whether foundations, trusts, individuals, or giving circles—understand what it takes to run a nonprofit. We can buy all the books we want for a literacy program, but, if the school can’t afford to heat the building, it isn’t hard to recognize that no learning will take place during the winter.
Those of us who work in the infrastructure community are also nonprofits. But remember, being a nonprofit is a tax classification, not a way of doing business. In fact, each of us in the nonprofit sector must operate as businesses. That means we have heating and cooling bills as well as payroll tax obligations to meet. We have phone bills, office copiers, and postage costs. And of course we have salaries for the hard-working, talented, and committed people who are the engines that make any nonprofit operate successfully.
Last year, through the generous support of the Fund for Shared Insight, we produced a series of videos in which funders share lessons they’ve learned. We also included the voice of nonprofit leaders because we are partners with them in the philanthropic ecosystem, each dependent upon the other for positive outcomes.
While conducting interviews for the videos, I was reminded of lessons I’ve learned over the years in my role as a foundation trustee. I have always been bothered thinking about the time I line-item vetoed specific programs for which the grantee was designating the funds. Never mind I thought the co-executive directors were great leaders and ran a terrific program. Or that they were the ones in the trenches every day, advancing the cause which I was ready to support. I came to learn that the best way I could support them was with general operating funds. After all, they are were the experts, and once I got off my high horse thinking I knew more, the children we were all trying to help were able to benefit from their talents and our funding.
As Exponent Philanthropy member Lisa Parker of The Lawrence Welk Foundation commented about applicants, “. . . they’re actually our teachers. They are the experts in the field in which they work, and they are the ones that can inform us and teach us about how to be most impactful.”
There is an old joke with the punch line asserting that something purchased by the government probably went to the lowest bidder, so if you drive through a tunnel or over a bridge the state built, you had best hope the infrastructure is solid. Forcing nonprofits to act the same way and cut corners—especially at the expense of programs—is a formula for long-term disappointment.
Read today’s letter and invest in the nonprofit sector. Not only will the organization that receives your funding thank you, you’ll be investing in a better, more civil society in which everyone benefits, including you.
Henry Berman became Exponent Philanthropy’s CEO in 2011, previously serving as acting CEO, board member, and committee member. Through his experience as a foundation co-trustee and Exponent Philanthropy member since 2003, he brings a firsthand understanding of the needs of members to his role. Follow Henry on Twitter @Berman_Henry.
