9 Crappy Paradoxes that Shape Nonprofit and Philanthropy

Written by Vu Le

Hi everyone, quick announcement: Please put August 10th at 12:00pm Pacific Time on your calendar for Community-Centric Fundraising’s first town hall meeting. Sign up here and we’ll send you the zoom link. Until then, the (CCF) Hub is designed to provide alternatives to our default white-centric fundraising narratives. It features about three new thought-provoking pieces of content each week, including “How prospect research can help nonprofits become less racist and more inclusive,” “What I Learned from Losing Two Jobs in the Fight for Racial Equity,” “‘You want a director of what now?!’ When orgs that are hiring are too lazy to know what they want,” and the first episode of the Ethical Rainmaker podcast, where CCF Co-Chair Michelle Muri and I talk about fundraising and equity. Check it out!


I’ve been spending a lot of time flossing while thinking of how to categorize the challenges in our sector (What, like your quarantine activities are so much more interesting). Many of the stuff we deal with falls under the category of “well-meaning people inadvertently making nonprofits’ jobs harder.” Here are a nine. I’m going to call them paradoxes, though some of these are not paradoxes exactly, but are more like dilemmas, conundrums, or shenanigans. I’ve written about a few of them, but they keep coming up and remain a problem, so it’s good for us to review and have common language to push back. If we want our sector to succeed, we need to be aware of these paradoxes and control for them.

1.The Overhead Paradox: The focus on reducing overhead actually increases overhead. Is there anything more ridiculous than “overhead”? (*cough* infinity scarves *cough*). Despite countless people speaking out against this archaic and silly concept, it still comes back up like soy yogurt that expired three months ago but you decide to eat it anyway because yogurt is fermented and therefore can’t really go bad. But if you think about, the more that people worry about overhead, the more overhead it creates. Tracking and reporting on overhead requires staff time, accounting software, healthcare to deal with migraines, etc. These things are all overhead! If funders and donors want nonprofit overhead to go down (which is another argument entirely), then give general operating funds and stop forcing nonprofits to use overhead to track overhead.

2.The Sustainability Paradox: The focus on increasing organizational sustainability actually decreases organizational sustainability. I’ve been seeing fewer and fewer foundations asking the dumbass Sustainability Question (“How will you sustain this program when our grant support runs out so that you can stop being a freeloader and parasite on us foundations?”). But it still pops up from time to time. It is counterproductive. It’s like going to a small business that makes face masks and saying “You make great masks, but I will only buy from you if I know you’ll be around in five years. Since you don’t have a good plan to be sustainable, I can’t support your business, sorry.” If every customer does this, if every customer is focused on this business’s “sustainability,” it would ruin the business. Not worrying AT ALL about sustainability and funding nonprofits for the good work they do is what helps nonprofits become sustainable.

3.The Capacity Building Paradox: Forcing nonprofits to focus on building organizational capacity reduces their ability to build organizational capacity. There are still funders who give out small grants and require that organizations spend those dollars on accounting, HR, etc. One funder told me, “If we give nonprofits general operating dollars, they just spend it on programs, not on infrastructure.” I know these funders mean well, but by restricting nonprofits’ autonomy, you ultimately lessen their chances of building capacity. As I wrote here, the best way to help organizations develop their capacity is to give multi-year general operating dollars (MYGOD!). And then if you want to give additional funds on top of that for executive coaching or whatever, that’s great. (This is different from the Capacity Paradox, where organizations need funds to build capacity, but they cannot get funds because they don’t have capacity).

4.The Data-Resource paradox: Organizations cannot get significant funding without good data, but they cannot get good data without significant funding. This has been a bane for many organizations, especially organizations led by marginalized communities. Added to the complexity is that what is considered “good data” is determined by elite white institutions and people, which makes it even more difficult and expensive to obtain. We need to completely rethink how we view and resource data as well as who gets to define what is acceptable data and what is not.

5.The Single Issues Paradox: Foundations that prioritize specific social issues lessen the chances of those issues being successfully addressed. I’ll probably elaborate more on this in a future post, but basically, foundations have treated social issues like a salad bar and they get to choose which programs “align” with their priorities. So then they fund only homelessness, or only climate change, or only preschool programs that serve 4-year-olds with curly brown hair or whatever. The laser focus on single issues, though, is paradoxically why we suck at addressing these issues. That’s because social issues are interconnected: Homelessness is related to housing, which is related to education, which is related to food security, etc., and we have to address these problems holistically, not in silos based on individuals’ whims. If you want to make a difference in the stuff you care about, then invest in organizations, movements, and leaders, not your pet issues. And for nonprofits, stop being so focused on only your mission, and start thinking of the entire nonprofit ecosystem.

6.The Strategic Planning Paradox: Being too strategic reduces organizations’ ability to get stuff done. This article here lays out all the problems with our traditional ways of doing strategic planning, and highlights La Piana’s work around strategic thinking and real-time strategic planning, which I appreciate. Overall, the paradox is that the more “strategic” funders and nonprofits are, the less effective they often are. This is particularly true of foundations, whose “strategic philanthropy” approach has caused untold damage to the sector, to the point that several apologies were issued by proponents of this concept several years ago. And yet, it seems we’ve learned nothing. I keep hearing from foundations about how proudly “strategic” they are. And nonprofits continue to follow.

7.The Outcomes Paradox: The hyper-focus on outcomes often lessens the likelihood that there will be successful outcomes. Our sector has been conditioned to think that outcomes are awesome. And they are. To a point. But the gravitation toward outcomes often leads to ones that are narrow, easily-measurable, and short-term. Significant changes will take years, possibly decades to achieve. By being too focused on immediate, easily-accessible outcomes, we miss out on these longer-term successes. So to achieve meaningful outcomes, we may need to focus less on outcomes and more on supporting the work, especially the work of organizations led by BIPOC communities, over the long haul and trust that it will lead to the changes we want.

8.The Innovation Paradox: Rewarding “innovative” programs and services ultimately reduces innovation in the sector. One of the common complains we have in the sector is that many funders and donors don’t want to fund existing, proven-effective programs; they want to chase shiny new stuff. It’s exhausting, and some nonprofits have found clever ways to rebrand existing programs so they sound “innovative.” But being forced to lie and constantly worry about funding and having to scramble to survive because funders are enamored with shininess, these things do not lead to innovation. For innovation to happen, people need trust and stability of support so they can experiment, fail, and iterate.

9.The Social Good Paradox: Focusing on the good to society instead of intrinsic values of individuals reduces social good. We’ve been taught to explain how helping people helps society. For instance, by supporting youth, they will more likely grow up to be productive citizens who pay taxes and don’t commit crimes. We help older adults because if they’re healthy, they’re less likely to end up in the emergency room, which will save society money. But this reduces individuals to economic units whose value is measured by how useful they are to the rest of the community. This in the long-run reduces social good. If we want to increase social good, then we should forget about social good and get everyone to believe that people have intrinsic worth independent of their value to society, and that we should help them because that’s the right thing to do, the end.

There are plenty of other paradoxes, dilemmas, and shenanigans in our sector. Let me know your thoughts in the comment section. Until next week, remember to floss.

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Vu Le

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