The Problem With Nonprofits

Happy Giving Tuesday, everybody! (Or, almost Giving Tuesday, anyway). With nonprofits ramping up their fundraising (development? advancement?), I’d like to remind everyone of a few problems with this sector.

Disclaimer: I started a nonprofit. (And failed to get it off the ground, about which more later). I worked at a nonprofit for over seven years. And I’m not talking here about schools, churches, hospitals, and universities, which all have their own issues, but not necessarily the ones I’m talking about here. I worked with fantastic people when I worked at a nonprofit, most of whom really wanted to do good in the world.

Problem one: the exploitation of labor!

The exploitation of labor is endemic to the nonprofit sector. Most nonprofits pay scandalously bad wages and expect nothing short of heroic work in return. Leaving aside the fact that these organizations dedicated to making the world a better place very often make their own employees miserable, let’s look at another problem here.

The fact that nonprofits pay so poorly (except at the executive level, where they usually pay far too well) and expect so much limits who can work for them. Working in a nonprofit often becomes a kind of purgatory for rich people, who are the only ones who can afford to work for the kinds of wages nonprofits pay. Toil for two or three years making the world a better place, and then go get an MBA and work for an evil billionaire with a clear conscience! (I actually know at least two people who followed this exact path.)

I sat in many meetings in the nonprofit where people wrung their hands about how to attract more candidates of color to the organization. The answer, of course, was to pay better, because candidates of color weren’t lured by the promise of purging their white guilt by being exploited. But somehow this solution never came up.

Two: Nonprofits are (often) culty!

While watching a couple of cult documentaries, I saw scenes of the cultists on “retreats” at resort hotels, where they had a lot of meetings and team bonding stuff and took a picture of everyone and praised the cult leader extravagantly.

I watched as the cult experts explained that getting people away from their friends and family and keeping them occupied for long hours was a mind control technique designed to make people pliable.

Well, this was uncomfortable, because I went to several such “retreats” when I worked at a nonprofit. We’d praise The Founder extravagantly (he was unironically referred to as “our Dear Leader” at one), be booked with activities from morning to night, even when those activities were transparently just bullshit time wasters, and we’d all come away with a warm feeling that we worked with great people for a great cause.

And then we’d go back and work even harder for our shitty wages.

And, just like in a cult, the rank and file was not to question the leadership. Especially when there was an obvious problem. If you noticed and spoke up about a problem, your negativity was the issue. Just like in a cult!

I initially thought maybe I worked in a particularly culty nonprofit, but I’ve since come to learn that these techniques and attitudes are pretty common across the sector.

Problem three: Mission Contraction

No matter what the ostensible mission statement of the nonprofit, it will eventually, in effect, become this: Our mission is to sustain this nonprofit.

It creates a really twisted moral calculus. The nonprofit will betray one or more of its ostensible values, either to expand or to please donors (about whom more later), but justify it by saying (privately, usually), well, this is what we need to do to keep the lights on, or this is what we need to do to serve more clients.

Or, to put it another way, “We are good. Therefore anything we do to sustain ourselves is good, no matter how bad it is. Because it allows us to continue to do good.”

And, of course, if we are good, that means that we cannot be wrong. This is another dirty secret of nonprofits. A lot of them simply don’t do anything that’s remotely effective. (This, of course, is baked into the model. See below). But they massage the data, or serve people who don’t really need the organization in order to make the numbers look good, or “pivot,” but what they never do is look at their model and conclude, “Yeah, we were wrong. We thought this might work, but it turns out it doesn’t.”

Problem Four: The people who made the problems don’t really want to fix them.

And here we come to the paradox at the very heart of the nonprofit enterprise. Because in order to keep the lights on, nonprofits need to get money from rich people. (This, along with covid, is why I couldn’t get my nonprofit off the ground — I realized that I would spend at least a year doing nothing but pitching my project to terrible rich people and asking them for checks. I still think a nice place for kids to play D&D after school is a good idea, but I’m just not a sales guy.)

So if you’re going to start a nonprofit in order to help the people ravaged by racism and capitalism, you’re going to have to get money from the very people who have benefited most from those things. They definitely want to feel like they’re good people, but do they want to actually change the systems that keep them and their families wealthy and comfortable and make other people poor? Of course not.

So the nonprofit must limit the scope of its advocacy and moderate its rhetoric so as not to offend the people who keep the lights on. Which means nonprofits can never actually make large, systemic changes, despite what they may claim their mission is.

Rich people and corporations, of course, know this. Which is why they donate to nonprofits. It’s the best way to put a leash on smart, talented people who want to solve the problems that the rich people and corporations have created. In effect, the wealthy in this country have a whole network of organizations they use to not only claim some sort of virtue, but also to muzzle the people most willing and able to challenge the status quo.

As I said at the outset, there are a lot of great people working in nonprofits. But I think they, and the rest of us, need to admit that most of these organizations primarily exist so that the rich can tell themselves that they’re not bad people.