Friday, September 30, 2011

Economic & Effective Space for Nonprofits

I heard David Greco, vice president, Nonprofit Finance Fund at the BoardSource Leadership Forum recently and agree with the notion that the rules under which the nonprofit sector operate, create significant challenges yet the sector is able to provide profound benefits to our communities.

No private sector company would survive by charging customers for only the direct costs of services and 7% of overhead plus managing various restrictions from multiple sources of revenue with a range of reporting requirements. It’s quite amazing.

Isn’t it interesting that some (actually many) funders will not fund general operating (indirect costs)? Often, when I work with organizations in the grant writing process, I encourage them to include expenses to cover  costs to prepare reports required for the grant they are seeking when possible. I also feel fortunate that the Foundations I’m affiliated with, do understand the importance of general operating support. This would be one area in which “rules” ought to change. What are some additional “rules” that ought to change that would allow for the nonprofit sector to have even greater outcomes that positively impact our communities?

Kathy Grochow, NRS, St. Cloud

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