Nonprofits must be pragmatic servants of the community

By PAUL JAN ZDUNEK

last updated: November 15, 2007 07:46:01 AM

I can’t agree more with Mark Vasché’s column (“Despite YMCA’s problems, nonprofits deserve our support,” Nov. 11) about nonprofits and transparent accountability. Nonprofits, in particular, are servants to the communities they support.

In the case of the Modesto Symphony Orchestra Association, the revenue earned from ticket sales, program ads, merchandise sales, etc., represents only about 40 percent of the entire operating budget, leaving the MSOA to raise 60 percent of the budget each year from individuals, corporations and foundations. The proper use of these donations must be in the forefront of any nonprofit for the intention of the donor and for the health of the organization.

Many nonprofits begin the bankruptcy spiral because they do not focus on the basic expenses. It’s vital for nonprofits to be transparent with their basic everyday needs as much as with their successes to help their constituents understand that fixed and variable costs need to be funded.

Now, more than ever, donors are interested in giving to programs that make a significant impact on a community. This often translates into nonprofits raising monies to support specific activities over and above fixed general operating costs. In our industry, for example, I see money being raised and earmarked for special concerts, community outreach programs or educational support, leaving general fixed operating needs such as staff salaries, rent and utility bills unfunded, so to speak.

Often, nonprofits will design new programs to get new monies, but in the end, the nonprofit is no more ahead because the new money is being spent on the newly created program. I’ve never heard of a nonprofit selling the naming rights for the organization’s electric bill, but maybe it’s not a bad idea.

We must understand the reality that when sending us an invoice for the month, the electricity provider doesn't care that the symphony gave an incredibly inspiring performance of Beethoven's Ninth Symphony to 4,800 schoolchildren, it just wants to be paid for the electricity used that month.

Additionally, nonprofits should be incredibly prudent about how they spend the community's money. We cannot forget that each dollar donated comes from someone's hard-earned savings. As staff members of nonprofits plan and execute their operating budgets, they need to be as responsible as they would be in spending their own money.

Finally, many nonprofits struggle because they do not subscribe to this philosophy: Nonprofit is a tax status, not a business model.

The board, staff and constituents of nonprofits should expect and operate under the best of criteria. They should look for highly engaged board members who are leaders in their community and staff members who have all the professional skills to run the business successfully, and should supply the organization with the proper equipment to enable it to thrive, not merely survive.

We wouldn't think of going into battle with an army of half-trained but well-intentioned soldiers who fight with hand-me-down weapons that work most of the time. However, this is how many nonprofits allow themselves to operate.

Managing a healthy nonprofit requires focusing on the core mission and harnessing the available resources with a constant mix of inspirational vision, solid pragmatism and the unwavering expectation of achieving unprecedented, sustainable success.

Zdunek is president and chief executive officer of the Modesto Symphony Orchestra Association.

• Comments
• Add Comment
• Disclaimer