There’s a quiet tension that lives inside the nonprofit world and it has nothing to do with the work itself. It lives in the assumptions people bring to the table – donors, community members, funders – about how a nonprofit should look, spend and operate. Some of those assumptions actively get in the way of the good work happening right here in Southwest Colorado.
I’ve spent years working alongside the nonprofits in our five-county region, and I’ve heard the same myths repeated enough times that I think it’s worth setting the record straight. Not to scold anyone, but because our community deserves to give with confidence, and our nonprofits deserve to be understood.
This one comes up often, usually framed as a question: “When will they be self-sufficient?” It sounds reasonable on the surface. We admire businesses that make more than they spend. Why shouldn’t nonprofits do the same?
Nonprofits exist precisely because the market won’t solve the problem on its own. The free health clinic, the food pantry and the youth mentorship program exist because there is no profitable business model for the populations they serve. Asking them to become financially self-sufficient is a little like asking a public road to start charging tolls and then being surprised when it stops serving everyone equally.
A healthy nonprofit is sustained, not self-sufficient. It is sustained by a diverse mix of grants, individual donations, community investment and sometimes earned revenue. When we stop expecting nonprofits to ‘graduate“ out of needing support, we become better, more consistent partners to them.
I say this gently, because I’ve seen a lot of heart go into grant applications that ultimately didn’t serve the nonprofit well: Grant writing is a skill, and it is a specific one.
It requires understanding funder priorities, translating program work into language that resonates with reviewers. Get it wrong and you don’t just miss the funding opportunity, but you can also leave a funder with a poor impression of an otherwise excellent organization.
If the organization doesn’t have grant writing expertise on staff, it’s worth investing in someone who does, whether that’s a consultant or training for an existing team member. The return on that investment is real.
This might be the myth that frustrates me most, because it punishes exactly the behavior we should be encouraging.
A nonprofit that has built up reserves – money in the bank beyond what it needs to operate this month – has done something genuinely hard. It has planned ahead. It has protected itself against the inevitable moment when a grant doesn’t come through, a major donor moves away or a crisis lands without warning.
A healthy balance sheet is not a sign of hoarding. It is a sign of stewardship.
I’d encourage donors and funders alike to resist the impulse to reduce support for an organization simply because it appears financially stable. Financial stability is the goal, after all.
The overhead myth is perhaps the biggest misconception in philanthropy, and it has done enormous damage.
The idea is simple and intuitive: If a charity spends a high percentage on programs and almost nothing on administration, it must be efficient. If it spends money on staff salaries, technology, training and infrastructure, it’s decadent.
In practice, the opposite is often true. Nonprofits that are chronically underfunded in their operations where they can’t pay competitive wages or invest in good financial systems are fragile organizations. They burn out their people, and they struggle to grow or adapt.
The best nonprofits invest in themselves: They pay their people fairly and use good technology, and these things are the infrastructure that makes the mission possible. When we evaluate a nonprofit, the question shouldn’t be “how little do they spend on overhead?” It should be “are they spending wisely, and is it working?”
The nonprofits of Southwest Colorado are doing exceptional work – in classrooms and clinics, on rivers and in recovery programs, at food banks and cultural centers and everywhere in between. They deserve partners who understand them, not just admire them.
The next time you’re considering a gift, ask good questions. Ask about their programs, their impact, their plans for the future.
Briggen Wrinkle is the executive director of the Community Foundation Serving Southwest Colorado, a placed-based foundation serving La Plata, Archuleta, Montezuma, Dolores, and San Juan counties, as well as the Southern Ute Indian Tribe and Ute Mountain Ute Tribe.
