where’s my $100 million bonus?

Nonprofits get criticized all the time for being inefficient. Our sector is told that we must operate more like for-profits so less money gets wasted.*

So shall we go off and buy jet planes with our donor money? Citigroup did it. Or why don’t we renovate our executive offices with crystal chandeliers and mahogany furniture? Former Merill Lynch’s former CEO certainly thought that doing so would improve his productivity. Or why don’t we give our employees exuberant bonuses? It’s the only way we can make sure they will return to work.

Our sector has had its share of scandals and has not always used donor or government money responsibly, but hardly do we emulate the excesses of Wall Street even in its post-bailout days.** We may sometimes shuffle around paper and spend tons of time trying to get organized (most likely because we’re not funded sufficiently to invest in the proper infrastructure and technology!), but we do a lot with a dollar. And even if every dollar that goes to a nonprofit doesn’t go directly to paying for a bed for a homeless man, it’s at least providing a job and a salary to an employee.

There’s a fear that if more money goes towards “administrative costs”, some nonprofit employee is getting rich. Let me assure you this is rarely the case. Most employees at nonprofits are hardly paid enough for the work that they do, and almost any nonprofit organization stretches each dollar for the maximum benefit possible. Every Fed-Ex mailing, every new printer toner, every maintenance repair is questioned and cut back if possible. Nonprofits can be penny pinching extraordinaires. Buildings with broken roofs, lack of air conditioning, and old donated computers are commonplace.

Wall Street suggests far more wasteful spending and inefficiency than the nonprofit sector. Maybe Wall Street can learn some frugality from the nonprofit sector.

Done rant. (Yes, I have been ranting about Wall Street A LOT. I’ve been meaning to stop, but they just keep doing things that make me angry.)


* Lots of donor advisory articles and websites, such as Charity Navigator tell you to look at the infamous “administrative” vs. “program” expense ratios. The underlying message: Nonprofits should be spending money on program, and not on administrative expenses, because they need to be more efficient with their donor dollars.
** Though this doesn't surprise me -- I remember from my consulting days how we enjoyed food, booze, nice hotels and fancy parties on company dollars, without a thought as to whether we were using shareholder's or our client's dollars responsably. The indoctrination starts at an impressionable age.