"Understanding Nonprofit Capital Structure"

"Hidden in Plain Sight - Understanding Nonprofit Capital Structure"

By Clara Miller as published in The Nonprofit Quarterly (spring 2003).

Recommended reading by Jim Collins in 'Good to great and the social sectors'.

Miller writes:

"Focus on the Core Business.
• When you make a grant, know that you are really
funding an underlying business,which supports but
is separate from program. Identify the business, and
design grants that honor its dynamics. Don’t fool yourself
that you can invest funds directly in program or
discretely for program."
I put the bold face on the last line above..... I have tried many times over the past years to give that message as well. With hardly any result I must admit. My favorite comparison is investing. All these funders have investment portfolios. None of them calls the management of a company and says; 'can we in invest funds directly in your factory in Hungary'. Because in that world it is normal that you invest in the company; 'lock, stock and barrel'. Well why not in nonprofits....? Maybe reading it from somebody else - especially coming from the U.S. - helps....

Thanks for the tip HB from www.gevangenenzorg.nl who knows it is a favorite topic here and obviously he hopes that Miller's (and my) message are heard.....