From Blue Avocado

This blog post originally appeared on Blue Avocado, the online magazine for American Nonprofits. Although the author here is speaking about funding for nonprofit organizations SPO thought everyone who has ever had to deal with funding restrictions on a project would appreciate it.

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Blue Avocado's humor columnist Vu Le dreams about restricted funding for cakes:

For the past few months one of our staff has an eye that's been twitching. "It's this grant!" she says. "It's for our after-school program. It pays for instructors' teaching time, but not their planning time! How can they teach when they can't plan?! How? How?!"

"Psst," I whispered, "Let's talk in the conference room. "Since the staff is so dedicated, they will plan anyway even without getting paid,” -- I paused, looking around -- "Why don't you just increase their hourly wages?"

"This grant capped the hourly wage, so I can't pay them more. The other grant might pay for planning time, but they don't pay for employer taxes!" She started pulling at her hair, and both of us collapsed on the floor, weeping and beating our chests in anguish and despair.

OK, I might have exaggerated that last part a bit. But unfortunately, this sort of restriction is not an exaggeration. This challenge that we in the nonprofit sector face daily is historic and pervasive. And very, very frustrating and counterproductive.

Funders and donors are basically customers who buy products, not for themselves, but for other people who need them (I’ll talk about the weaknesses of that system in a future article). Imagine what a bakery would be like if it had the same funding restrictions that we have on nonprofits:

Baker: Welcome to the Dusty Apron Gluten-Free Bakery. Can I entice you with a cake?

Customer: Yes, a chocolate cake. It's for some gluten-free veterans.

Baker: Excellent! We can make a delicious flourless chocolate lava cake that was once featured in Tasty Pastry magazine. How does that sound?

Customer: Ooh, the gluten-free veterans would love that. They always get fruit for dessert. How much does it cost?

Baker: For a cake serving 20 people, it'll cost about $100.

Customer: OK, well, I can only give you $20, so you'll have to find the other $80 elsewhere Baker: Well, luckily, we have other customers who want to help make a cake for gluten-free veterans. At least three of them said they'll pitch in, and we'll ask some others too.

Customer: Excellent, so here's $20. However, you can't spend the $20 on sugar. You can only spend it on chocolate and up to one egg. It's spelled out here in this cake baking plan.

Baker: What about vanilla? It's hard to make a delicious cake without good vanilla! Customer: You can spend $1 of the $20 on vanilla, but if you decide you need more vanilla, you have to email me about changing the baking plan.

One week later:

Customer: We ordered a gluten-free chocolate lava cake from you guys, and it was awful. It was too dense and not nearly sweet enough.

Baker: I'm sorry, but other customers also had their own conditions. One customer said he would pay for sugar, but not butter. Another said she would pay for chocolate, but we already had you paying for chocolate, so we asked her if she would pay for butter, and she said no. Our oven's thermometer also broke down, but none of the customers would allow their cake payments to be used to fix it, saying that fixing it does not directly benefit gluten-free veterans. I emailed you to ask if $5 of your $20 could be used to buy a temporary thermometer, since we didn't need so much chocolate, but you said it would take three weeks to change the original cake baking plan.

Customer: Well, I'm not buying any more cakes from you guys. You obviously don't have enough baking capacity. Goodbye.

Meanwhile, another customer heard the exchange:

Customer 2: Sheesh, I'm sorry about that. If it makes you feel better, I and a bunch of other customers got together and ordered a blueberry bundt cake from you last month, and it was delicious.

Baker: I'm glad to hear you enjoyed it! I hope we'll see you around more often?

Customer 2: Absolutely not. We only pitch in to buy a cake from any bakery once. If we keep buying cakes from you, you'll just become dependent on us, and that's just madness—madness, I tell you!

Baker: Well, I'm sorry to hear that. How can I help you today?

Customer 2: I just formed a committee to explore why there is such a high rate of nervous breakdowns among bakers, and since you guys were featured in Tasty Pastry, I thought I would ask you to join.

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Two weeks ago I was out to lunch with a potential new corporate sponsor, who got very excited about a program we did awhile ago, where we provided computer training classes in Vietnamese to parents so that they could learn to check their kids' grades online through Seattle Public Schools' Source program.

"This is excellent!" he said, "That aligns really well with our priorities this year. You should apply for our employee giving grant."

"Cool," I said, "I did see that on your website. I'll review further and follow up with you."

"One thing you should know though," he said, "we don't fund staffing. We hate paying for people's wages. We can pay for the computers and software for this program, but only for client use."

I know he's just a messenger for his company, but at that moment, I wanted to unleash the fury of a thousand EDs and Development Directors on this poor man. I would stand on the table and my eyes would glow white, and a terrifying cyclone of meeting minutes and financial statements would swirl around me, knocking everything over. People would cower under their tables as hundreds of business cards rained down from the heavens. "Who," I would say in a low voice that would reverberate through the restaurant, "Who would make the program happen then? Elves?! Unicorns??!!!"

I calmed down, thinking of how awesome that scene would be if we had a show about nonprofit work that combines The Office with X-Men. But yeah, seriously, who would manage this program? God, that would make our work so much easier, if we could just summon some multilingual elves to come out and plan programs and fill out paperwork. That would cut down on costs, and I'm sure the elves would have a better grasp on the advanced algebra and calculus required to figure out which funder is paying for what by when.

The sad reality is that we nonprofits spend way too much time navigating the complex maze of funding restrictions, time that could be better spent delivering and improving on services. We should all focus on the final outcomes and allow nonprofits the flexibility to do their jobs. Though restricting funding in the name of accountability has been a standard practice that stemmed from good intentions, in the end, it is the gluten-free veterans who will be eating fruit again.

Vu Le is executive director of the Vietnamese Friendship Association (VFA), a Social Venture Partners investee. His column, Point of Vu, documents the fun of nonprofit work. He can be reached at vu.le at vfaseattle dot org when he is not eating his favorite cake, vegan chocolate lava cake. Check out his other posts at nonprofitwithballs.com and follow him on Twitter at @nonprofitwballs.