Do Nonprofits Want Funders to Be Critical?

A comment from an anonymous “director of development” was posted today on my Donors vs Investors III post (check out the growing conversation in the comment section of this thread):

Just to bring another perspective to this line of questions, here’s a fundraiser’s take. I’m sure there are lots of forward thinking, transparent non-profits out there who can speak candidly with anyone about mistakes and areas to improve, but my sense is that the vast majority are like my employer: they would never let any  information that might even suggest something less than sparkling about them be publicly revealed.

We have one foundation funder who is openly critical of us, and funds us with a contract and a set of concrete tasks the organization accomplish. I would call this funder a proactive investor. They didn’t just evaluate us, they made their findings known, and better yet continued to offer us money if we made an effort to clean up our act. Many staff are grateful for this funder, and believe our organization has improved with its participation.

So I guess my point is, perhaps a non-profit is best served by funders who can own their criticism, stand by it and use it as a tool. The many many non-profits out there who are less interested in critically evaluating themselves can benefit from proactive investors like the one I have described. And at least when I am in the room with this funder, I am more or less confident that what they say about us at conferences is what they say to my face.

Wow. I might be advocating for a more public dialog, but I’m surprised as anyone to hear a nonprofit employee say their organization has benefited from a major funder being openly critical.


  1. ksun says:

    I think you are emphasizing the wrong point that “director of development” is making. What I get from DOD’s comment is that he/she likes funders to be critical especially if they remain at the table. He/she appreciates donors who criticize but then “stand by it and use [criticism] as a tool” for change. A funder who criticizes and then leaves the table is not nearly as valuable as a funder who criticizes and then sticks around to see what comes of it. This shows, what I think, is a commitment to positive change versus just flat out criticism.

  2. Tidy Sum says:

    As a seasoned foundation staffer, I am proud to have earned a reputation in my tri-state area as an insufferable windbag of unsolicited and dubious advice.

    Heck, any nonprofit leader supplied with a few cold beers can recount stories of funder cultural incompetency, supreme arrogance, and embarrassing ignorance of community or organizational dynamics.

    We are philanthropoids — its what we do.

    But sometimes funders do talk turkey in a way that can be helpful.

    I have heard nonprofit organizations admit that funders have prodded them to address issues of organizational diversity, outcomes measurement, fundraising, founders syndrome, and strategic planning.

    In the best cases, the foundations have quickly followed up with grants or resources that help tackle that issue.

    Sadly, this approach is not the norm.

    By the way, I read last week on Gift Hub that the last nonprofit in the world who had not heard a funder natter on about weak evaluation or monitoring of outcomes was located deep in the Amazonian jungle about 50 miles from the Rio Negro back in 1988.

    That funder unfortunately never followed up as to whether they heeded his advice because he was eaten by an alligator on his way back to Manaus.

  3. There’s constructive criticism…and destructive criticism.

  4. Dir. of Development says:

    To get back to Sean’s questions about Investors vs. Donors– The point I was trying to make, in an admittedly roundabout fashion, is that it’s easy to be critical, and really darn hard to be constructive with that criticism and follow through. That is, in my opinion, why funders do not make their negative feelings about grantees public- they would have to work much much harder to make sure those negative comments were legit. But when they do that, I think it can be great for everyone involved.

  5. All four of your comments center on the idea of constructive/productive criticism. That’s a point I clearly have not emphasized enough and I think you’re right.

    But I think criticism that is true is more important than being constructive. It is OK if something negative is said even if the funder walks away, so long as the criticism is true. It is up to the nonprofit to respond to the issue at the heart of the criticism.

    There is a culture of being nice and helpful in the nonprofit world that does not always exist on Wall Street. I think the culture of the Third Sector is a hugely positive thing. But I’m struck by how outraged people were with the tone of how Holden Karnofsky expressed criticism. Holden’s defense was in part that he was use to being blunt from his Wall Street days.

    I personally was critical of Holden’s lack of tact from the very first post I wrote about him. But I do think that as much as constructive criticism is more useful than simply talking bad about someone and walking away, that as long as the negative statements are true, they are a net positive even when they hurt.

    At the end of the day, I think the Third Sector is strong enough to withstand criticism. I think it is producing far more social impact than it is given credit for. I think making the conversation more authentic will not unleash a torrent of critical comments, but instead will unleash a wave of increasing respect for the Third Sector from everyday people.

    I believe that speaking the truth out loud is always the best bet.

  6. Tidy Sum says:

    The epidemic of the politeness is proportional to organizational size.

    Keep in mind that, the vast majority of businesses are not Wall Street firms. We hear relatively little public criticism of the mom and pops or small cap businesses.

    NCCS data shows that most NPO’s have small budgets of under $1m.

    We DO hear a lot of public criticism of big dog nonprofits that are regularly profiled in the Wall Street Journal, the Chronicle of Philanthropy, Chronicle of Higher Ed, and all of the sectoral newspapers.

    We love to dish dirt on nonprofit organizations in the media:

    1) Universities – my favorite whipping boy.

    2) Nonprofit hospitals and health insurers – always damned if you do, damned with you don’t.

    3) The Red Cross, Shave the Children, Nature Conservancy, Sierra Club, and all of the empire-building mega nonprofits.

    4) Blogs, diatribes, tatoos, and poetry have critiqued the goings on of major funders like Gates, United Way, Ford, Rockefeller, etc.

    Who among us has not enjoyed the sport of major newspapers pillorying the excesses of our local foundations?

    There are heaps of public and funder criticism of nonprofits out there in proportion to organizational size.

    The big guys are obvious targets. They are visible. They are somewhat more accountable to a larger public of donors, constituents, clients, etc.

    I challenge anyone in a major city to pick up the daily newspaper and not find a story about the strong leadership or dismal failure of a nonprofit organization.

    If you don’t, let me know, and I will send you a free Tidy Sum is a Philanthropy Expert T-Shirt. (XXL Only)

    And yes, NPO’s can handle criticism from funders and the public. E.D.’s have lizard-thick skin.

  7. Tidy, reading back over my comments, I haven’t been clear on this point, but I would say that the criticism you are pointing to are criticism based on scandal or scams (CEO pay, lavish parties, etc). I’m interested in criticism of effectiveness. If you watch CNBC, you see a little of the kind of criticism you rightly point out already exists in the Third Sector. But you see much more focus on a debate over which for-profit companies are the best investments.

    That’s the debate I’d like to see in the social markets.