Choose Support that Doesn’t Crowd, Cramp, and Hurt

Several years ago in a meeting with some city and nonprofit leaders, I shared the need and vision for a long-term recovery center. The idea became a central piece to a ten-year plan to address homelessness. City-government leaders involved in the discussion voted to allocate $500,000 dollars as seed money to realize the new brick-and-mortar project. Some were shocked when we turned it down. Why would anyone turn away half a million dollars of free government money? Because it’s not free.

Every nonprofit leader should know that most opportunities afforded by the government come with significant opportunity cost – whatever is lost by foregoing the alternative solution. For example, in his recent article, Travis Hurley, Advancement Director for Watered Gardens Ministries, points out that donors are more inclined to give to nonprofits who don’t take government money, and more than 1/10 will decrease giving when government steps in to help. Taking a sizable government grant and retaining nearly 90% of your private donors may seem like a win, but that simple math doesn’t capture the whole of the cost. There’s more. It crowds out community, hurts your hustle, and cramps your style.

It Crowds Out Community

Growing a nonprofit for 21 years on private donations alone has demanded a tremendous amount of grassroots fundraising energy: engaging radio ads, television PSAs, mass mailings, gala events, sponsorship requests, calls, visits and more calls. We even developed a way for individuals to sponsor one night of shelter each month for $15. Thousands of donors are involved and every month, each receives a signed letter and testimony of a life impacted by their partnership. That’s a lot of work! Certainly, if we just landed a few government grants, it would lighten that load. However, like other nonprofits, money alone isn’t the answer. More so, people are.

The community we engage to financially support the work is also the community that steps up to fill more than 700 volunteers shifts every month at our mission. The results from this 2014 Fidelity Charitable survey revealed that 87% of donors are involved in volunteering, too. More interesting, financial support usually comes first. Fifty-eight percent of donors reported giving financially before signing up to give of their time. Taking government money crowds out more than private donor dollars. By relaxing the demand to vigorously engage those donors, It crowds out the very community necessary to serve and build relationships with the clients who need so much more than what cash alone can provide.

It Hurts Your Hustle

Government dependency doesn’t just happen to people trapped in the welfare system; It can happen to organizations that become reliant on the renewal of last year’s government grant. Government dependency at any level fails to be a source of encouragement, inspiration, or even decent accountability. Government simply can’t do that. But local donors can.

With local donors, I have challenging conversations, tough questions demanding honest answers, inspiring moments as we tour through our facilities. This active attention is the result of constant engagement by a community enthusiastically involved in the cause they support and care about. In a good way, it keeps me and my staff on the hustle. I consider it a type of Hawthorne Effect – the idea that performance is improved when workers know someone really cares about what they’re doing. That someone cannot be the institution of government. Rather, government dependency for the nonprofit stifles this type of healthy interaction and accountability. It’s sure to hurt your hustle if not kill it, entirely.

It Cramps Your Style

You have your own style that flows from the vision you have for your organization. That vision and the important cause it addresses are what you share with passion to a community that supports you. If you’re the leader, it’s your vision and you drive it. You work hard to develop the strategic plans to fulfill it. You teach the core values that drive an organizational culture to support it. You believe in your mission and more than anyone else, you steer it. The trajectory or course is determined by your unwavering commitment and focus on your vision – the destination of your hope. And, how your mission gets there is up to you and your team. This methodology, a blend of your passion and conviction to address the unique needs in your specific community is your style.

I once shared some of this with the leader of a government-funded community action agency. She looked perplexed. “That’s just not how we operate. The federal government drives our programs depending on what they decide to fund.” I was as shocked as she was. At that point in my life, I was unfamiliar with any organization whose mission drifts so easily to achieve someone else’s desire.

You might think that a small government grant won’t do much to cramp your style, but one Salvation Army leader in another city once told me, “Don’t ever take government money! I took a grant to build a larger cafeteria. Afterward, the ACLU sued us for praying in it!” Even what seems to be “no strings attached” may end up cramping your style.

Remember, the cost of government funding that crowds out, hurts, and cramps is worth counting carefully. I encourage you instead, call your community into partnership, keep your hustle, and never drift off course from the vision God has planted in your heart.