The Crossover You Asked For…
During my conversation with Vu Le, we briefly answered a question about funders’ aversion to so-called “overhead.” I felt compelled to offer a fuller written response to the fantastic question that Pradnya Haldipur (writer of the infamous Chad Chronicles, which is worth a read for women everywhere who work with Chads) submitted:
Why do funders discourage self-investment and maintenance of healthy infrastructure within organizations by limiting or being unwilling to include ‘overhead’ in the budgets?
Pradnya also submitted an incredible rant, which undoubtedly rivals the brilliance of the “Friends, Romans, Countrymen, lend me your ears” monologue that Marc Antony gave in Julius Caesar:
“I raise money for a living. For most of my career I and my nonprogramming brethren have been categorized as evil overhead, you know, unnecessary aspects of an org such as HR, communications, light bulbs, and air conditioning. Funders continue to perpetuate the scarcity mindset; do more with less. Don’t expect to get a fair wage, but OK, buy the team a pizza once in a while. WHY???? When was it written that in order to be good in the world we must be willing to sacrifice our sanity and well-being? You want metrics? Let me describe how much less work gets done on a 15-year-old laptop under a flickering neon light.”
Dear Pradnya,
I have a snide answer and a serious response. Let’s start with a few important caveats: First, there are genuine reasons to restrict grants (especially when working with large institutions), but the grantee should initiate those exceptions. Second, I will speak interchangeably about “overhead restricted,” “restricted grants,” and “chronic underfunding” because I believe they are a part of the same sadistic family of asinine funder constraints.
Now, let’s begin with snide:
Perhaps restricted grants are the product of funders who have never experienced the indignity of nonprofit scarcity. Here are a few offerings from my personal collection:
- Using frequently malfunctioning state university restrooms, which often had the experiential quality of a bodega bathroom
- Wrapping presents at a dying mall during the holidays to raise a few dollars for employee birthday cakes
- More specific to the above, wrapping presents (something I don’t like doing) for cakes (which I don’t enjoy eating) to celebrate a birthday (which I loathe to acknowledge)
Funders may call it “restricting overhead,” but I call it “adult-onset nightmare fuel.”
A potential solution is a mandatory work-based learning program where funders can learn essential nonprofit skills, such as the maximum number of slices you can cut from a Costco pizza before a student calls you a “pizza charlatan.” The answer, by the way, is 18 slices.
Now, a serious response because the issue of funding restriction has significant implications. For instance, according to the Nonprofit Finance Fund’s The Heart of the Nonprofit Sector report, chronic nonprofit underfunding has led to exhausting work conditions and burnout — a crisis that, across all sectors, costs an organization 15%-20% of its payroll. Pradnya, you and I both know that these are not new concerns. However, these findings are especially egregious in light of the current federal assault against social services.
But again, your question is why do we continue to restrict and withhold essential funding? One reason that keeps coming up is “gee golly” ignorance — funders simply don’t know the perils of restriction. In this framing, the solution is talking about it — which ironically places the burden on grantees to do a lot of the explaining.
There’s another (more compelling) why: We (as in funders and even nonprofits themselves) underfund the sector because we don’t value it as much as the for-profit sector. Vu has written prolifically about this in his book Reimagining Nonprofits and Philanthropy. One of his “9 Horsemen of Nonprofit and Philanthropic Ineffectiveness” is the “Inferiority Complex” — the lionization of corporations, their values, and their belief systems.
I absolutely agree with Vu, and I’m going to say something he has probably never heard: That’s too diplomatic. From my experience as a foundation staff member, what I have experienced is palatable contempt for and infantilization of the nonprofit sector — especially by board and staff members with for-profit backgrounds. My foundation was no different. As a result, in the early years, Stupski Foundation’s solution was to hedge this contempt with heavily restricted grants that were time limited (one to three years).
The irony was, while my organization was trying to play hardball with education systems, we were playing like the Los Angeles Clippers — and for my nonsports fan readers, the Clippers suck. Although I’ll take any opportunity to dunk on the Clippers, what I mean is that we never held ourselves to the same standards as our grantees. If our grantees were on a three-year funding leash, then shouldn’t our jobs (both for the board and staff) be on that same leash? If we were going to restrict and scrutinize grant funds, then why weren’t we doing the same for our salaries, our travel expenses, our dinners, our parties, our excesses? If we regularly “assess” grantees, then shouldn’t we also collectively evaluate ourselves? If we’re going to be difficult, could we at least be internally consistent?
OF COURSE NOT.
Pradnya, I truly believe that restricted funding and underfunding due to nonprofit contempt is quietly pervasive and insidious across philanthropy. The latest egregious example involves the Ballmer family. The Ballmers recently donated $80 million to National Public Radio (NPR), a fantastic gift given a blatantly partisan cut to NPR to the tune of $1.1 billion. Yet that gift appears restricted to technology, so NPR is still laying off its staff, including essential reporters who are the heart of the organization.
Meanwhile, Steve Ballmer doesn’t appear to apply the same funding restrictions to his for-profit venture, The Los Angeles Clippers. In fact, it’s quite the opposite: He has allegedly engaged in an NBA salary cap circumvention scheme to overpay a past-his-prime basketball player by an additional $28 million. And what a genius investment — the 2026 Clippers went all the way to the 9th seed so that they could lose again to the 10th-seeded ambulance-chasing Warriors in the play-in round! See, we should always value the infallible for-profit logic of someone who voluntarily owns the Clippers!
Pradnya, what I hope for the field moving forward is that we stop perpetuating the nonprofit “inferiority complex” that Stupski Foundation once held mand that still exists at large. I believe the first step is that foundation boards and staffs should deeply reflect on their perceptions of the ecosystem they are a part of — and how they can give from a place of love over disdain. Next, I hope foundations engage in internal restructuring to eliminate inane gatekeeping and compliance-based conversations about grantees.
Don’t stop there. I highly recommend that foundations read the Nonprofit Finance Fund’s report, which offers a slew of promising practices on how to give well in an era of burnout and chronic underfunding. These practices include unrestricted funder support, helping grantees advocate for and clearly define equitable pay, supporting ballot initiatives, and more. Most of all, these practices come from a place of genuine care versus contempt.
Finally, Pradnya, I hope you and your colleagues continue to ask these important questions. I certainly appreciate them. Also, I hope you are able to read this letter on your computational device, which I am guessing is a boxed-monitor Dell with a Windows 95 OS and a keyboard caked in layers of congealed and hardened Cheeto dust — the ultimate marker of contemporary geologic and nonprofit time.
Thank you for all that you do,
Jen
