Dateline: January 8, 2007, Chicago
Global warming isn’t all bad. As temperatures rise, fuel bills drop. That means low-income individuals don’t have to devote as much of their disposable income to pay heating bills in areas that for millennia have been plagued by sub zero temperatures.
But for at least one nonprofit, there is a...
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cloud to the silver lining. The Boston Globe reported that Central Vermont Public Service Corp’s Shareheat program had received only $30,000 in donations as of the start of 2007, compared with $125,000 that it had received by the same time last year. Mild Weather Blamed for Fewer Donations to Charity Heat Program, Boston Globe, Jan. 2, 2007. Of course, temperatures could suddenly drop, creating a need, so we understand the concern of those running the program.
We couldn’t help but be a bit tongue in cheek with the Globe’s headline. The headline, however, raises some serious questions that face charities and the charitable sector. Charities don’t exist because there is something inherently good about charity. They exist to solve problems: meeting the needs of the hungry, finding cures for diseases, assisting people with job training needs, providing early child education, etc. People sometime lose sight of this fact. A charity that finds a cure for a disease should not be viewed as a failure. It performed its mission and its time for those who work for it to move on.
Now, let’s focus on heating assistance. We would argue that this charity’s focus might be too narrow--we should note that we aren't even sure this is actually a charity; it sounds like a program run by a utility that makes grants to charities. Rather than focusing on just subsidies for fuel costs, maybe this organization should focus on a number of energy issues faced by low-income individuals. Among the programs it might consider sponsoring (if it doesn’t already) include ones that address the cooling needs of low-income individuals and weatherization of low-income homes. It might also focus on addressing winter clothing needs so that low-income kids and the elderly have adequate protection when they must face the elements. How about a charitable solicitation campaign along these lines? “Winter coat manufacturers have huge inventories of winter coats that they are deeply discounting. Help us buy more coats today for next winter.”
Everything we suggest may be impractical or inappropriate expansions for the program in question. However, there is a bigger point here that both donors and charities must recognize. Events and circumstances change. That is why donors should not narrowly restrict their gifts into perpetuity and charities need to be nimble and adaptive.
The unanswered question: If donations to the heating assistance program are down, where did the money go? Are contributions to the local food bank up? Even if overall donations are down, that may not be inappropriate. We assume that the areas in question rely heavily on ski resort and other winter vacation activities for commerce. Possibly those who have made the donations in past years are experiencing hard times themselves. Maybe by not making a donation these firms are able to avoid laying off people. The market is adjusting.
No charity has a right to expect the same (or increasing levels) of contributions each year. Charities may be organized as nonprofits, but that doesn't mean they are or should be insulated from market forces.
In response to these assertions, the folks running the heat subsidy program might argue that they need a minimum amount of revenue each year to maintain the infrastructure to provide the benefits when needed. That may be true, but it is a problem that other charities also face. Just take a look at the disaster relief charities. The American Red Cross is flooded with contributions following a highly-publicized disaster, but where is it getting the funding to aid the victims of the 70,000+ house fires that occur in the United States each year? It has to be creative. In the case of the assistance program in question, this may mean merging its operations with another program or, as we previously suggested, expanding the scope of its activities. However, the market will not and should not accept business models that don't work.
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THE FOREGOING IS NOT AND SHOULD NOT BE TAKEN AS LEGAL ADVICE. IF LEGAL ADVICE IS REQUIRED, THE NON-PROFIT OR OTHER PARTY IN QUESTION SHOULD SEEK THE ADVICE OF QUALIFIED LEGAL COUNSEL. If you liked this post, please visit http://www.charitygovernance.com for a description of our training and consulting services. You will also want to acquire a copy of Jack Siegel's book, A Desktop Guide for Nonprofit Directors, Officers, and Advisors: Avoiding Trouble While Doing Good."
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