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Summary: Nonprofit organizations and funding providers must be aware of various realities, conflicts, and challenges in order to maximize the beneficial impact of the projects, says Cathryn L. Dhanatya, co-founder of professional services firm Growing Good Inc.
The lack of resources has always been one of the most pressing challenges in the nonprofit sector, with many organizations struggling to access funding and resources in order to continue their work to benefit the social good. The complexities of donor-recipient relationships also further complicate the matter, which is why both parties must be prepared and have a clear grasp of their goals and principles, says Cathryn L. Dhanatya, co-founder of Growing Good Inc, a professional services firm that specializes in the nonprofit sector.
Dhanatya, who has extensive work experience with the nonprofit sector in the academe, donor, and recipients, says each party must learn to ask the right questions when faced with potential projects. As a consultant for a donor, she makes it a point to meet the recipient’s team and talk to them as an outsider. She provides an outsider perspective and gives clients a general evaluation of the recipient as well as the various strengths and weaknesses of the project.
“It’s incredibly important for donors to do their research on recipients, because they will be investing a significant amount of resources into these projects. They should examine all areas of a project and ask deeper questions to determine whether the project will be able to utilize resources effectively, the feasibility of success, and measurements of impact.”
On the other hand, Dhanatya has also worked in getting projects funded, and she believes that obtaining funding is relationship building, where there should be a good fit in many areas for the project to be executed smoothly. She understands that many nonprofits constantly struggle to get and maintain funding, making it difficult for planning and consistent operations at times. These uneven funding models can cause a great deal of stress for nonprofits, which may lead to nonprofits diluting their impact by chasing and going after any organization that will fund them. Which can cause negative consequences later in the project. However, she reminds nonprofits that not every donor is the right one for them, sometimes because the cost of receiving the funding outweighs the benefits to the project.
“There are a lot of factors that go into the matchmaking for such a relationship, which needs to be symbiotic. Donors invest in nonprofits, and they may have different expectations on their returns of investment even if they are non monetary. Some Donors are very hands-on with direct involvement in the project operations and want to oversee things because its their money and reputation on the line, while others want little to no direct influence over the project,”
Dhanatya says it is very important for nonprofits to understand what they need to provide in return to the donating organization, as well as fully understand the donors point of view and principles. For example, it would be highly problematic for a cancer organization to receive money from a tobacco company. It is part of her job to educate nonprofits about these realities, giving them an idea of whom to take resources from and whether or not they align with the nonprofit’s ethos and the project’s goals.
“Accepting money from the wrong entity can end in disaster. It’s the nonprofit’s brand and reputation at stake. If their name gets splashed all over the newspapers’ front page due to a controversy, it could sink their organization. So you really have to be smart about it. On the flip side, donors must ensure that the project team is able to deliver on what they promised. I’ve had potential fundees who’ve promised me the moon for not very much money. I figured out they didn’t know what they’re talking about, because there’s no way they could do this project for that amount.”
Dhanatya says this reinforces the need to give honest feedback and evaluation in the nonprofits space, and ensure that the relationship matchmaking between organizations and potential donors aligns with the priorities of all parties.
“It’s important to build trust between donors and recipients, because it takes a lot of trust for somebody to invest in your organization. That doesn’t come instantaneously. Instead, it comes from building the human connection between the donor and the nonprofit,” she says.
About Growing Good Inc.
Growing Good Inc. is a professional services firm dedicated to providing management consulting, fundraising support, and organizational strategy for non-profit organizations and companies whose services and products aim to do good in the world. It believes that organizations and their people can create positive, multi-generational, and even radical change in the world.
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