Being Stingy Doesn’t Work

Last week, I shared this post from Vu Le at Nonprofit With Balls. I excerpted this quote from it:

Budget Testing allows a larger nonprofit to be able to grow, while smaller, grassroots organizations continue to struggle. Getting 10K, while great, is not nearly as helpful as getting 100K. With 100K, you can hire a full-time exempt person, an essential element in organizational growth. With 10K, you can’t do much; if you’re lucky, you may be able to Frankenstein some other sources of funding together to get a part-time person, or pay for other elements to help your program to limp along. It’s like telling a kid, “Because you’re so little, I’m going to give you a few cheerios. When you grow big and strong, I’ll give you more and better food.” The flaw with this argument is that kids cannot grow just by being fed a few cheerios every day. (Despite my 2-year-old’s insistence otherwise)

Le is talking about foundations and nonprofit organizations. Budget testing is his name for the idea that foundations should provide funding based on the size of the budget of the organization to which they’re giving. For example, a nonprofit with a $1 million budget can apply for a $100,000 grant, while a nonprofit with a $100,000 budget can only apply for a $10,000 grant. His problem with this approach is that it means that the large organizations can get grants that are big enough for them to grow (e.g., $100,000 can hire a new staff member) while small organizations are left in the dust (e.g., $10,000 has to be combined with other resources in order to help a program).

And that’s all true. Small organizations need more help in order to grow into large organizations and make a greater impact on their communities.

But this quote also made me think of how we approach poverty as a problem.

Often, we place severe restrictions on who can receive help. A person must be struggling with immense poverty in order to receive help. Even if they qualify, the help they get isn’t enough to make a dent in their poverty. Someone who needs a little help can’t get the help that they need; someone who needs a lot of help can only get a little. It’s like we’re trying to do the least that we can to make it look like we care about the problem.

The reformers – those authors and speakers making the case against charity – try to justify this approach.

“If we give people more than this,” they say, “they’ll become dependent. They’ll become entitled. They’ll lose their work ethic. We don’t want our helping to hurt. If anything, we should give less.”

The problem is that being stingy doesn’t work. Solving a little bit of the problem doesn’t solve the problem. Forcing poor people to cobble together support from dozens of government programs and nonprofits doesn’t solve the problem. Inventing reasons to provide less doesn’t solve the problem. Asking poor people to work harder doesn’t solve the problem.

Many of us in the nonprofit sector are quick to see that stinginess doesn’t work when it’s foundations being stingy with us. So why are we so willing to implement it when it comes to the people we serve?