A few weeks ago, two different articles circulated among different interest groups in my social media. The first, in nonprofit management circles, was Dan Palotta’s TED Talk “The Way We Think About Charity Is Dead Wrong.” The second, in legal aid circles, a piece in the New York Times about the sad state of our nation’s poor when facing civil legal problems, “Right to Lawyer Can Be Empty Promise for Poor.” As a career-long nonprofit professional, and the last ten years of which spent in legal aid policy, these two items begged to be considered together.
Palotta’s talk threw me for a loop. I’ve worked in the nonprofit sector almost exclusively since a high school job at the local YMCA. Part of my specialized training in cultural nonprofit management required memorization of the Donor’s Bill of Rights and how to read form 990s. A priority evaluation factor ingrained in me is, “what percentage of their money goes to their programs?” The Better Business Bureau’s Charity Accountability codifies this as 65% of funds being spent on program activities; no more than 35% of funds raised spent on fundraising expenses; and to not accumulate too much unrestricted assets — their guideline suggests net assets shouldn’t be higher than three times the annual budget (or, three times the size of last year’s expenses, whichever is higher).
This standard of measure is wildly opposite that of for-profit endeavors, and misses the point of why nonprofits exist: to deliver on human needs. Human needs are not commodities. If it took all the available money in the world to feed and clothe every body on the planet, it wouldn’t be too great a cost.
Mr. Palotta and many others who advocate for ample, unrestricted resources for nonprofits, discuss the costs associated with fundraising: the costs are high, but better-supported fundraising results in greater donations, which allow the nonprofit to increase its capacity to serve. While I agree with this in principle, there are two additional components I don’t want to leave out: the imbalance of power inherent in philanthropy, and how to measure success if we’re going to leave behind the outmoded “overhead” ratio model.
While there are no easy answers, I think nonprofit staff at all levels would do well to read and heed the recommendations Tom Tierney of The Bridgespan Group offered in a 2011 interview with The Wall Street Journal: an organization should be clear about what “success” is and how it is measured, and should be upfront with donors about the true costs to make that happen. Mr. Tierney and his colleague Richard Steele go into greater depth about this in their white paper “The Donor-Grantee Trap.” Their recommendations include strong collaboration between organizations and donors to decrease the power imbalance, and to ultimately better serve clients and causes.
This level of collaboration does exist in charitable work, though not always in a traditional nonprofit corporation structure. Critics of the nonprofit industrial complex have very valid arguments about this system’s perpetuation of systemic privilege — people of privilege are still holding power to determine what services are available to people who are underprivileged. This plays out dramatically in legal aid, where there aren’t enough attorneys to represent low-income people, even in matters where their basic human needs are in jeopardy.
While Mr. Palotta’s TED talk was making the rounds, so too was an article about the 50th anniversary of Gideon v. Wainwright, a legal decision establishing right to counsel in criminal proceedings. My colleagues were sharing the article link with a quote from the article
“Most Americans don’t realize that you can have your home taken away, your children taken away and you can be a victim of domestic violence but you have no constitutional right to a lawyer to protect you.”
This is true, and disturbing, but we’re missing the opportunity to discuss not the rights of individuals, but the ability of our legal aid structure to meet these needs. A more sentiment in the article was offered by Martin Guggenheim, a law professor at New York University:
“We don’t have an excess of lawyers. What we have is a miserable fit. In many areas like family and housing law, there is simply no private bar to go to. You couldn’t find a lawyer to help you even if you had the money because there isn’t a dime to be made in those cases.”
An un- or disincentivized private bar means we cannot count on free representation when we might lose our homes or children. So we turn to legal aid, nonrpofit organizations that employee attorneys to represent clients, at no charge to the clients. Unfortunately, legal aid nonprofits often rely on funding from government allocations, which come with strings attached about who can and cannot be served, leaving out some of our most vulnerable neighbors.
Unrestricted funding exists, but is interest-sensitive. When interest rates drop, so too does giving and interest on assets. Remember the BBB standard I mentioned earlier, that net assets shouldn’t be higher than three times the annual budget? An organization following that standard would still be challenged by the ongoing 2008 recession, if it even survived this long. The catastrophic cut in services provided by nonprofit legal aid and other human services organizations worsened life for countless people at a time when they most needed help.
The challenge to legal aid nonprofits is in building collaborations with our donors and our community partners. Many legal aid organizations are rising to this challenge, as evidenced in partnerships between these organizations and medical clinics and community economic development projects. To keep this going, we need to continue redefining success, continue partnerships changing the systems that keep our clients in poverty, and engage our private donors as the true partners they are, and lobby for lifting restrictions on government allocations.
To do this, we need the paradigm shift outlined by Bridgespan, and echoed in Mr. Palotta’s TED talk. The first step, in my mind, is to be clear on what we define as success, and how we’ll measure it. We also need to commit to understand our role in perpetuating privilege, and embrace our responsibility to lessen its impact. Because when it comes to your home, family, health, or safety, the bottom line is keeping you safe and able to thrive, not about the cost make that real.