No more money?

Is the world running out of money? Have we created more debt than capital? For the purposes of my argument, it doesn’t matter. What does matter is that the public interest sector is finding it increasingly difficult to find it.

I want to talk about solutions but first let me just slip in one word of warning. I am not going to put the full blame on those who give the money. Quite the contrary, unfortunately, I am going to put a substantial portion of the blame on those asking for it.

Let’s get to solutions.

My first one is to remove some of the turbulence in the sector. This turbulence is caused by duplication and overhead. Most think overhead is the main problem, it is not. Duplication is worse. There are too many organizations doing the same thing. In some rare instances this is good. I do want several laboratories exploring parallel avenues when seeking a cure to AIDS or malaria. But, do I want organizations fighting over who is going to bring relief to a specific village? I do not. I want them to either work together or to realize that there are two of them working towards the same goal and for one of them to decide to take on another challenge.

The solution is some kind of coordinating body that all would adhere to. Imagine if the airline industry did not coordinate? Beyond all the safety issues, you would have three flights leaving at the same time from the same airport headed for the same destination while abandoning some other route. Coordination works. Unfortunately, in the public interest, there is no one doing this work. Some organizations do this but in a limited fashion. One is OCHA, the Office for the Coordination of Humanitarian Affairs. This from their website: “OCHA is the part of the United Nations Secretariat responsible for bringing together humanitarian actors to ensure a coherent response to emergencies. OCHA also ensures there is a framework within which each actor can contribute to the overall response effort.” It sounds good but they mostly coordinate within the UN and they focus on humanitarian action. That leaves out about 90% of the public interest sector. It leaves out the environment, development and most of the civil society organizations that work to solve these problems.

I pointed to overhead. I would like to add inefficiency to this. Overhead and inefficiency are endemic in the public interest sector. Simply, for every person with passion and drive, there are several more without. Too many times have I seen totally, and I mean totally, under qualified staff responsible for major tasks. I have seen a field logistics officer whose entire career had been spent in finance. Granted, everyone should have the right to reinvent their career, but not in the field, alone, managing a project that directly affects the lives of coworkers and the local community. The solution is to adopt a higher posting qualification ethos. Considering how heavy the hiring process is you would think that this is the way it happens, it is not. Too many jobs are attributed to lesser qualified applicants. There are many reasons for this ranging from salaries to a lack of pertinent education. We can solve this. We can do so with performance based remuneration. What’s wrong with that? What’s wrong with rewarding good performance even if it is not profit related? There seems to be this reticence to the concept of performance in the public interest sector as though it was some capitalist disease. We go to a restaurant and tip according to service, and accept this as normal. We don’t look at a sales person in surprise when they tell us they work on commission. We expect them to. Of course, both have to do with sales. But what about quality? Are we willing to pay more for better quality? We are. We all understand that something that lasts longer, feels better or otherwise satisfies our criteria for quality is worth paying for. I, as a donor, would rather provide funds to those who can deliver. Let’s look at that for a minute. So, in the real world of donations what happens is that donors put in accountability evaluation mechanisms to ensure quality. They figure that if they control you ex post facto that will make you perform better. That was fine a few years ago. What has happened now is that the benchmarks for evaluation have dropped as donors have realized that despite increasing controls the quality of output is dropping. So rather than find ways of increasing results, the benchmark is lowered. I say let’s reward those who perform, whether they do so for profit or not.

The second solution, after turbulence, is to get donors to accept that they are making it too difficult to ask for money. I understand that we have to satisfy due diligence. I understand that you cannot just ‘hand out’ money. You need to give sufficient information. But have you seen a typical appeal document recently? I liken it to the manufacturing manual for a jumbo jet. It has more pages than an encyclopedia and asks you the same question five times five different ways. Worse, whether you are asking for $10,000 or $25,000,000, the document is almost identical. How do you expect a tiny NGO to take the necessary time? They should be doing their good work, not satisfying the demands of over-zealous bureaucrats. The good news is that some donors are starting to agree. One very large development donor I have worked with says it openly. They realize that the process is identical from tiny to huge and it has made them look very bad with their beneficiaries who are giving up. So there are pools of money that are being sidelined by ridiculous diligence. We need funding fast tracks for smaller amounts. Sure, some of the funds will not be spent wisely. Some of the funds will go to the wrong people. But the time and money saved and the extra goodness delivered to the needy will far outweigh the negatives.

There’s more. A third imperative is to ask for and provide longer term support. Projects tend to default to ‘annual’. Try to get funding for a ten-year project. I have. The responses are less than friendly, they are downright door closing. Donors think that you have to show success and then come back for more. The problem is that every time you come back the workload is the same. Another problem is that you are being forced to interrupt the actual work in favor of the documentation. We have to work together to create a new funding grant timeframe. Five and ten year projects make sense. They allow actors to build up, be optimal and then wind down or, if necessary, come back for more. This does not mean that they should not report. This does not mean that all the funds should be disbursed at once, but they should be earmarked. If you set aside ten years of funding, put it in a separate trust fund; nothing is worse that receiving a long term grant and being told three years into the project that the funds have been reallocated to some other project.

I have other solutions. I’ll save them for another day. I will now close this thought with an understanding: yes, those who give the money should have a say in who it goes to, for what use, for how long and how to ask for it. I understand this. I respect this. But I have dealt with enough donors to know that they too feel that the system is flawed. Maybe it’s time to come together and discuss the model. Maybe it’s time to question the logistics of fundraising and donations.

Next time I talk about fundraising, I hope to bring up the notion of ‘pooling’. Rarely does a private company have a single shareholder. Equity usually belongs to many, sometimes thousands. But with the difficulty of asking for funds, imagine if we had to ask ten donors! Pooling is one answer.

Happy fundraising!