Included during the webinar was a series of “poll” questions designed to help participants provide input related to the theme. A question that particularly caught my attention was: As you think about defining mission and vision, what do you find most challenging? Of the five possible responses, the winner by a large margin was: Finding/engaging enough person power for the process.
The number of participants in the webinar was far too small to draw broad conclusions, but I am confident that had the sample been much larger, this response option would have still been the number one choice. Person power is one of the main ingredients of organization capacity. Without staff members, revenue streams, equipment, etc., it is impossible for an organization to function effectively. Unfortunately, in the life of many non-profit organizations today, achieving and sustaining appropriate capacity is a significant challenge.
There are many reasons why this is the case. Sometimes leaders simply try to take on too much in their efforts to address an important need. Sometimes the organization’s mission, structure, business model, or operating plan is ill conceived. Sometimes leaders are unwilling to consider collaborations or partnerships that would improve capacity and impact. Sometimes there is too much competition for clients or resources.
Complicating the efforts of most non-profit organizations to achieve the human, material and financial capacity they need to be effective are perceptions by supporters and potential supporters about what demonstrates effectiveness. One misguided notion in this regard is that low operating expenses for administration and fundraising equals organization effectiveness. I was very pleased last year when the executive directors of three very well-known and highly respected non-profit “watchdog” groups (Guidestar, Charity Navigator and the Better Business Bureau’s Wise Giving Alliance) signed a joint letter to donors in the United States pointing out the danger of what they call “The Overhead Myth.” Accompanying this letter are some compelling statistics that demonstrate that keeping operating expenses low does not make an organization effective. In fact, the opposite is often true. This data also demonstrates that inaccurate reporting of financial information is extremely common as non-profit organizations attempt to prove their efficiency. For example, during the year 2000, 37% of public charities with annual contributions of $50,000 or more reported no fundraising expenses to the IRS. Thirteen percent reported spending nothing on administrative costs and general expenses. As a wise person once said, "If it's too good to be true, it probably is!" It is impossible for any effective charitable organization to operate without administrative costs. Organizations who do not invest in their capacity can become trapped in a cycle of “capacity starvation” that results in decreased effectiveness and impact.
If you are interested in taking a closer look at this issue, check out the resources listed at the end of the “Overhead Myth” letter. For an even deeper dive, check out Dan Pallotta’s very interesting books on this topic, Charity Case and Uncharitable.
Of course, all of us who choose to be generous in support of important causes also face capacity issues. The occasional news story of a non-profit “gone bad” makes us worry about whether we can trust organizations with the resources we share. Our mailboxes are full of appeals from organizations that all have a compelling reason why our support is needed. Doing research to figure out which organizations are worthy of support takes time. It’s no wonder that increasingly, people who have been blessed with the financial capacity to do so are forming family foundations and hiring staff to help them make prudent decisions.
The good news as we consider and address capacity issues, whether as individuals or organizations, is that our generous God has an unlimited capacity to bless us with vital capacity to be blessings to others. Our capacity includes generous hearts moved to service by the Holy Spirit, generous intellect and skill to build and sustain impactful ministries in our communities, generous resources that we can share with others, and generous wisdom and intellect to make wise decisions about the distribution of these resources.
The financial challenges facing local, state and federal governments make the role of churches and the entire non-profit sector increasingly important in helping those who require special care or who cannot help themselves. Our service organizations will need to operate at maximum capacity to be effective. Thank you for investing your personal capacity in organizations and causes that impact the lives of others with health, hope and healing!
