Another in a series of articles related to association management selected from our reading list by:
Robert O. Patterson, JD
CEO/ Principal
The Center for Association Resources, Inc.
A critique on public opinion regarding the efficacy of non-profit organizations in distributing aid.
Non-profit organizations have the potential to be an invaluable resource in combating many social problems that exist in our modern society. A shrinking middle class and a struggling economy have contributed to many people seeking out help from non-profits. Many of these people are, for the first time, experiencing a situation in which unemployment, lack of access to health care, or the loss of their home, and old biases against non-profit organizations as “too fat” or “wasteful” have been abandoned in wake of the need of the services provided.
This major intellectual paradigm shift among the upper middle class has been the side effect of some very unfortunate events. However, in a down economy, it is vital that non-profit organizations (NPO’S) continue to receive donations from the surviving middle and upper class. Members of these classes have not experienced the same negative impact from the economic downturn, and thus, many are skeptical that donating money to a non-profit is an effective means to get money or services into the hands of those who need it most.
To combat this, the best recommendation would be for non-profit organizations to examine the targeting that they use when delivering these services. Outside of the obvious methods of trimming waste from the bureaucracy of some larger NPO’s, the best method in effectually cutting waste would be better targeting in who receives the aid that is available. Two methods, discussed largely in the context of eliminating government waste in social programs by Richard J. Zeckhauser in ‘Targeting in Social Programs: Avoiding Bad Bets, Removing Bad Apples’, are extremely applicable to NPO’s as well: avoiding making bad bets in allocating funds, and identifying bad apples as individuals that are not truly in need of help.
“Bad bets”, for example, might be people who are requesting long term aid but are likely to obtain work in the near future. NPO’s can extend short term aid to these individuals, but they are not a good bet for long term aid, because the likelihood of overlap between help from the non-profit and compensation from work is high. “Bad apples”, on the other hand, require NPO’s to better screen candidates for those who truly do not need aid. Requiring more verification or paperwork, while adding time to the approval process, would be one example of a method of combating bad apples.
While the implementation is different for each non-profit organization, the concepts commonly iterated behind better targeting in government social programs are extremely applicable to non-profits, and should be considered a good place to start when a NPO wants to be able to combat the popular view that non-profit organizations are inherently uneconomical.
Kelley Scott is a free-lance writer/blogger from Chicago, IL
Non-profit organizations, NPO, social programs, targeting, waste, ineffective,The Center for Association Resources
