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Most nonprofits can't last long "if donations stop". Why would they stop? I give every year and so do many others.

by not2b 6y ago

mikepurvis 6y ago
Indeed, and I'm not sure it would be a defensible position to just be stashing your donated funds into a gigantic rainy day war chest— the money is there to spend on growing and fortifying the service in other ways, so it should be spent.
- tristor 6y ago
  The proper way for non-profits to do this is to start an endowment fund, which provides consistent residual income that can help fund operations. Usually by identifying specific large donors who would wish to be named in the fund.
  - hinkley 6y ago
    I guess we’re “disrupting” foundations too.
    - tristor 6y ago
      I'm not sure I understand your meaning? Endowments and foundations are different things with different objectives. Many foundations may have endowments of their own, and may use them to issue grants to non-profits. From a legal and financial perspective though, there's a difference between a non-profit having an endowment itself which provides restricted funds for specific operational activities vs how foundations typically create and structure endowments for external giving. Both concepts have been around for decades, so I don't think either is particularly disruptive.
  - mikepurvis 6y ago
    It looks as though they do indeed have such a fund: https://www.theguardian.com/technology/2016/jan/15/wikipedia-fund-future https://www.theguardian.com/technology/2016/jan/15/wikipedia...
Taylor_OD 6y ago
Something like a global pandemic that removes their job?
hinkley 6y ago
I think you do have to ask yourself if the need for the charity can outlast its time in the sun. The Red Cross needs to stay frosty all the time. They get money every time there’s a disaster, but the money to deal with the current disaster needs to have already been spent before the checks clear. If we haven’t had a big disaster in a while, we all know there’s one coming, because they always come, and when that shoe finally drops it might be huge. But donations are down because nothing is blowing up. We still need Wikipedia even if someone cures cancer. Because you don’t cure cancer, you cure a cancer, the moment you’ve cured two or three, an avalanche of money will arrive to fix the others. Money that might have gone to something else like the Red Cross, WWF, PP, Wikipedia, or really all of the above.
- tptacek 6y ago
  It's funny, because the Red Cross is famously one of the least effective deals in charity.
  - hinkley 6y ago
    I think they are running a charity on hard mode. If I were feeding homeless people (any year except last year), I have a pretty good idea of what I have to accomplish and for how many people. I could run a pretty lean operation. Meanwhile RC “has to” stash supplies 12 hours from everywhere in the world and then let most of them rot. Their overheads are huge, even before you get into any discussion of mismanagement.
    - tptacek 6y ago
      You can Google to quickly get a bunch of different articles about how ineffective the Red Cross is; we don't need to recapitulate them all here, it's just a little funny that they were your example of an obvious recurring charity donation. If I have a real point here, it's that people all have different definitions of what important charities are.
      - hinkley 6y ago
mistrial9 6y ago
My Japanese colleague told me with no humor, that I should never work for free, end of sentance. I was at the offices of $Giant_90s_NonProfit when a group from Japan was on tour of the two story office in San Francisco. They were full of energy and had questions, but someone told me the reason they sent a large and important group for the tour, is that they have no "non-profit" in Japan. I suspect that the non-profit goodwill in the USA is changing a lot in the last year.

Most nonprofits can't last long "if donations stop". Why would they stop? I give every year and so do many others.

by not2b 6y ago

Most nonprofits can't last long "if donations stop". Why would they stop? I give every year and so do many others.

Indeed, and I'm not sure it would be a defensible position to just be stashing your donated funds into a gigantic rainy day war chest— the money is there to spend on growing and fortifying the service in other ways, so it should be spent.

tristor 6y ago
The proper way for non-profits to do this is to start an endowment fund, which provides consistent residual income that can help fund operations. Usually by identifying specific large donors who would wish to be named in the fund.
- hinkley 6y ago
  I guess we’re “disrupting” foundations too.
  - tristor 6y ago
    I'm not sure I understand your meaning? Endowments and foundations are different things with different objectives. Many foundations may have endowments of their own, and may use them to issue grants to non-profits. From a legal and financial perspective though, there's a difference between a non-profit having an endowment itself which provides restricted funds for specific operational activities vs how foundations typically create and structure endowments for external giving. Both concepts have been around for decades, so I don't think either is particularly disruptive.
- mikepurvis 6y ago
  It looks as though they do indeed have such a fund: https://www.theguardian.com/technology/2016/jan/15/wikipedia-fund-future https://www.theguardian.com/technology/2016/jan/15/wikipedia...

Taylor_OD 6y ago

Something like a global pandemic that removes their job?

hinkley 6y ago

I think you do have to ask yourself if the need for the charity can outlast its time in the sun. The Red Cross needs to stay frosty all the time. They get money every time there’s a disaster, but the money to deal with the current disaster needs to have already been spent before the checks clear. If we haven’t had a big disaster in a while, we all know there’s one coming, because they always come, and when that shoe finally drops it might be huge. But donations are down because nothing is blowing up. We still need Wikipedia even if someone cures cancer. Because you don’t cure cancer, you cure a cancer, the moment you’ve cured two or three, an avalanche of money will arrive to fix the others. Money that might have gone to something else like the Red Cross, WWF, PP, Wikipedia, or really all of the above.

tptacek 6y ago
It's funny, because the Red Cross is famously one of the least effective deals in charity.
- hinkley 6y ago
  I think they are running a charity on hard mode. If I were feeding homeless people (any year except last year), I have a pretty good idea of what I have to accomplish and for how many people. I could run a pretty lean operation. Meanwhile RC “has to” stash supplies 12 hours from everywhere in the world and then let most of them rot. Their overheads are huge, even before you get into any discussion of mismanagement.
  - tptacek 6y ago
    You can Google to quickly get a bunch of different articles about how ineffective the Red Cross is; we don't need to recapitulate them all here, it's just a little funny that they were your example of an obvious recurring charity donation. If I have a real point here, it's that people all have different definitions of what important charities are.
    - hinkley 6y ago

mistrial9 6y ago

My Japanese colleague told me with no humor, that I should never work for free, end of sentance. I was at the offices of $Giant_90s_NonProfit when a group from Japan was on tour of the two story office in San Francisco. They were full of energy and had questions, but someone told me the reason they sent a large and important group for the tour, is that they have no "non-profit" in Japan. I suspect that the non-profit goodwill in the USA is changing a lot in the last year.