Why are nonprofits so dysfunctional?

Image of words on a scrabble board Self and Altruism

I’ve been working in the nonprofit sector in various capacities for a while now. My first foray was in 1994, on a sub-committee of a national peak body in the food industry. Since then I’ve been a nonprofit employee, manager, CEO, project manager, volunteer support worker, board member, chair, treasurer and, from 2010, a consultant.

As a result, I’ve had up close and personal encounters with many, many nonprofit people and organisations. The majority of these entities have been community-serving, small-to-medium enterprises operating in the human services domain, with some member-focused, business-oriented organisations such as sporting clubs in the mix, as well as social enterprises.

Many have offered very lovely opportunities for purposeful connection and growth and have been a joy to work with. However, I’m sad to say the great majority of people and organisations I have met or worked in or with have presented a far uglier face than we might associate with a sector that seeks to work for co-operative, harmonious ends, if not to do good.

Yes, you name it, I have seen it: fraud, corruption, collusion, malfeasance, back-stabbing, plotting, private gain, personal agendas, vendettas, nepotism, jobs for the boys, rorting, opportunism, political jockeying, power-seeking, bullying, harassment and abuse (staff and clients), stalking, cyber-bullying, self-promotion, kudos and status-seeking and more.

So much so in fact I was inspired to conduct a research project in 2009 on the subject of dysfunctional leadership in the sector as a part of my Masters degree in Philanthropy and Nonprofit Studies – a work I plan to condense or serialise for presentation on this site. For the study I asked a variety of nonprofit people to share their stories and unfortunately I had no shortage of takers. Indeed, many welcomed the opportunity to be able to talk about what had gone on for them.

The study confirmed what I had been seeing and in some cases, experiencing for myself, for years.

But the real question – and the study did go some way to answering this – is why does a sector that is premised on the notion of good behave so badly?

To answer that question today, I can say – with my consultant’s hat on – it is of course quite often the case that nonprofit organisations and people seek the services of someone like me when things have gone pear-shaped, so we could attribute some skewing towards the negative to this fact. However it has been my overwhelming experience, pre and post-consulting, that dysfunction abounds, and conversations I have with people in the sector in addition to the work I do continues to confirm this.

In my view there are a number of reasons for this dysfunction (and I intend to discuss these here over time) but my over-arching theory is that despite claims or beliefs to the contrary, nonprofit people are still overwhelmingly self-interested, even if they believe they are not.

To explain further: self-interest is easy to spot when we’re talking about nepotism, fraud, opportunism and the like. But my observation is that self-interest underpins most if not all activities carried out in the name of good, even the most seemingly benign.

For example, my work in frontline service delivery (i.e. working directly with the clients of an organisation that provides human services, such as a homeless person’s shelter) could be motivated by a number of things. I might want to:

  • make someone feel good
  • help them or bring them something
  • change something about their lives
  • change something about the world
  • appease my guilt about my life
  • feel I’m at least ‘doing something’
  • feel good within myself for doing it

In a similar vein, as a member of the general public rather than as a ‘nonprofit person’ per se (though we are of course both), my willingness to give an organisation money or support is most likely tinged with the same desire to help and feel satisfied that I have taken a step to change something I’m finding unpalatable or disturbing about the world, society or my community.

The thing is, whatever way we slice it and whatever our engagement with charitable or nonprofit work, altruism – as noble as it seems – has self-interest of one kind or another at its core, even if that altrusim seems as harmless as the ‘warm inner glow’ that comes from giving, be it money, or time, skills or labour.

In other words, from the most self-interested agenda to the least, we are sitting on a spectrum of self-interest. One (the person who is benignly giving) just looks better than the other (the most-patently grasping individual).

So we are saying something quite radical here: that it is no better to be a well-intentioned donor than it is to be a scammer or a bully. But if we take the concept of ‘better’ out of the equation, and suspend all judgement about who is the ‘better’ person, at the end of the day it is still true that both activities are self-interested in some way.

Why does this matter?

I want to put forward the proposition that we can’t have true nonprofit, or charitable, activity if the self is involved in any way, shape or form. What we do is either fully in service of mankind and completely devoid of self-interest, or is designed to satisfy a personal need whether that need looks ‘good’ or ‘bad’.

This is not to say we should attempt to address this notion by giving or doing in a way that is martyr-ish, for it is just as much an identification of the self to be the ‘penniless benefactor’, the ‘tireless giver’. Neither should we put ourselves at risk of harm to be the hero in the field in order to help others – nor abuse ourselves in any way in order to right the injustices and inequities of the world, as real as these are.

So, if we take seriously the proposition that the root of nonprofit dysfunctionality lies in self-interest, how can we ‘do charity’ in a way that is devoid of self-interest? This interesting question will be explored in a future blog. In the meantime, it could be useful for each of us to ponder the ways in which we, if we are to be 100% honest, use giving and doing ‘for others’ for our own satisfaction or identification.

By Victoria Lister

2 Comments on “Why are nonprofits so dysfunctional?

  1. Victoria I love the way in which you don’t hold back in asking the hard questions here! It is very confronting to consider that my many years of volunteering in the homeless services were self serving and yet part of me absolutely can feel that they were. That is not to say that the support was not important and necessary, however I could also list a variety of ways in which I did not even questions the ‘benefits for me’.

  2. It is a hard question to ask ourselves, but in charitable and nonprofit work it can be just as much ‘about me’ as it is in other more obviously self-interested arenas. It’s just that it looks different to work in other sectors where a degree of self-interest is the norm, as it (the nonprofit sector) is overlaid with ideals and beliefs about doing good, benevolence, and so on.

    This is not to say we don’t need to be self-interested in the sense we need to be across our own self-care (and having a financially supportive job is one aspect of how we self-care) but it is interesting to ponder to what degree are we personally invested in feeling good because of the work we do. I love that you’ve dared to examine your own investment Bernadette!

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