The Nonprofit Starvation Cycle

A vicious cycle is leaving nonprofits so hungry 

for decent infrastructure that they can

barely function as organizations—let alone

serve their beneficiaries. The cycle starts with

funders’ unrealistic expectations about how

much running a nonprofit costs, and results in

nonprofits’ misrepresenting their costs while

skimping on vital systems—acts that feed

funders’ skewed beliefs. To break the nonprofi t

starvation cycle, funders must take the lead.

While this quote from the beginning of the article and the photo shown can pretty much sum up everything about this article their are some deeper critiques that are presented.

1.  First, is funders' unrealistic expectations, which is partly due to the power dynamics in the nonprofit sector and also a lack of accurate overhead data to show what the budget should actually look like.
2. This then leads into what they call "Underfed Overhead" which is described as a lack of competitive or adequate pay for qualified candidates which then means unqualified candidates are hired.
3. Next is misleading reporting where a report conducted reports that most nonprofits report less overhead costs than actually there and often accountants will advise nonprofits to not put anything in their fundraising section.
4. The article then discusses how to properly care for the nonprofit budget, funding and staff and the power of grantees.

I also thought the other photo in the article about the actual costs of business was important as well

Because this is the first year New Urban Arts has had a grant to be in Central HS the budget is pretty straight forward. I've looked at it a few times and it is not super complicated. However, we have been running out of funding for the last few weeks of the school year and will potentially have to cut back on programs and paid staff because the fall and winter programs absorbed most of our funding. We think this will be ok though with the warm weather coming students will be more inclined to be outdoors than to be inside.