We’re thrilled to share our interview with philanthropic leader, David Greco, Founding Partner of Social Sector Partners. David has been one of the leading voices moving the Real Cost Project conversation further, which you can read more about in this post from earlier this month.
Can you summarize your philanthropic work in five words?
Ending the culture of scarcity.
You recently launched a training program dubbed “Think Money First.” What was the catalyst for creating Think Money First?
There is this culture of scarcity that is limiting the ability of social sector organizations to achieve impact. The charity mindset means overworking and underpaying our people, it means apologizing for the burden of asking someone for money, and it means spending every penny on program. We have weak organizations with limited capacity and no liquidity. Staff that is stretched beyond their limits all while earning poverty wages.
The cold hard reality is that it costs money to achieve impact.
No Money. No Mission.
And if we want to have greater impact, then we need to end this culture of scarcity. We need to change our thinking. We need to think money first.
What is the biggest problem facing the social sector?
That we do not know what it actually costs to solve the problems we are trying to solve.
We over promise and under deliver because we do not understand the fully loaded cost of the outcomes we promise. And everyone is complicit in the deception. Nonprofit leaders don’t want to tell their funders what it costs because they are afraid that they wouldn’t get funded. Funders prefer to remain unaware of the real cost because they don’t have enough money to pay for it. Boards look the other way and champion how much their organizations do for such little money. We dress up outputs as outcomes because outputs are cheap, while outcomes are expensive – very expensive. We don’t have a common language to talk about real costs and financial sustainability.
If you could positively change one negative issue impacting the Los Angeles community, what would it be and how would you tackle the problem?
In our work across the region, we are seeing far too many nonprofits without the financial resources that are critical to maintaining financial health and flexibility. There is clear need to develop stronger boards, new business models, and outcomes-based strategies. And even more importantly, funders and donors as well as nonprofit leaders need to engage in honest and open dialogue about what are the infrastructure and investment needs of their organizations in addition to the mission and program needs.
What organizations and individuals are making the greatest impact and why?
I would love to give a great big shout out to Jacob Harold and the team at Guidestar. They recognize that unless we have a viable alternative to measuring the effectiveness and impact of nonprofits, we will never be free of the overhead and fundraising-to-program ratios. Guidestar is pulling IRS financial data and combining it with programmatic data provided by the nonprofits themselves so donors and funders as well as research groups have a much more nuanced, multidimensional picture of nonprofit effectiveness.
How are you helping the community move the conversation forward?
We will not see the impact we want in our communities if the organizations responsible for creating that impact are fighting simply to keep their doors open and their lights on. We will not get there with fragile organizations, weak infrastructure, overworked staff, and the inability to handle risk.
In the end, financial sustainability is about ensuring that vital programs and services continue to be available in our communities. And to get there, we need to demystify finance and help leaders get the right numbers to make better decisions that drive long term sustainability and outcomes.
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