I’ve been wanted to put pen to paper regarding the financial times, but have been preoccupied with other matters.  This is a fascinating time—very difficult for many, very thought provoking for many more.  From the beginning, I have been interested in the “silver lining” associated with the economic downturn.  Reports that public transportation use is up, home gardeners planted a record number of seeds this year, and retail sales are down hardly alarm me.  People thinking before they spend?  Apparently, a new idea for many privileged Americans. 

A critical question for those of us working in the nonprofit sector is “What does this mean for nonprofit organizations?”  Before answering this question, we can’t quite stop ourselves from an “I told you so” moment.  After being harassed endlessly to operate in a more business-like manner, we would all like you to notice that businesses have problems, too—big ones! 

A friend of mine who prefers to remain anonymous writes:

As I’ve been following the financial meltdown, I’ve been pondering the push in recent years towards philanthrocapitalism, social enterprise, microenterprise and the impulse towards treating nonprofits more like ‘businesses’.  I have no quibble with the last – if you can’t manage your books and figure out how to bring dollars in, then you’ll cease to exist – but the tension between unfettered free-market capitalism and what a community needs to survive on a civic, spiritual or non-tangible level is enormous.  The condescending attitude that nonprofit boards have a lot to learn from for-profit boards seems to have been turned on its head here.

 

Also, the situation we’re facing is a ‘credit crunch’, where, as the New York Times says, “banks become more fearful of giving out cash”.  Now we know what happens to foundations who ‘choose’ not to give out a certain percentage of their cash – they cease to be foundations.  It may be incredibly foolish of me to ask why banks aren’t required to commit a minimum percentage of their assets to credit – maybe they are – but by using language like ‘fearful’ and ‘reluctant’ the NY Times is either anthropomorphizing a business or pointing up the goddamn truth – people make these decisions and this sounds less and less like a credit crisis and more and more like a hold-up.

Jan Masaoka comments in the current issue of Blue Avocado:

The next time someone says to you for the umpteenth time, “Nonprofits should be run more like a business,” say back to them: “Like which business?”

This month, with huge financial firms tanking and passing the pain to thousands of employees, shareholders, customers and taxpayers, it’s a good time to remember that if Lehman Brothers or AIG had been run more like nonprofits, they might not be in the trouble they are in today. If these firms had been run like nonprofits, they would have placed community well-being above executive pay, profits, and competitiveness.

Want to read more?  Visit the Nonprofit Quarterly for many more nonprofit leaders “sounding off on the bailout.”