The Big Short

The Big Short- Nonprofit Edition

I read Michael Lewis’ excellent book, The Big Short this weekend while flying to and from meetings in New England.  It left me wondering how the investment banks were unwilling to wrestle with the potential risk and deficiencies perpetuated by the financial system.  I finished the book and wondered what other industry was built on a paradigm of false assumptions.  I began to scribble down the following questions for the purpose of a reality check for the social sector.

  • Is the social sector transparently designed to serve the public’s interest?
  • Do we need to design an identity statement to define the sector?  Is it ideal to have regional hospitals and national debt collection services classified in the same category as a local literacy organization?
  • Have we designed a system that is self-dependent and closed?
  • Are we feeding an insatiable fundraising monster?  Can the endless stream of gala fundraising events and annual appeals continue to sustain the sector’s many causes? 
  • Is the leadership teams (board and staff) committed to the mission?  If another organization is achieving the mission more effectively would an organization merge?  If an organization’s vision was reached, would it close the organization doors immediately (if a cure for cancer was discovered tomorrow would all the nonprofit cancer organization’s that seek a cure cease to exist)?
  • Should paid positions be capped or discounted by some percentage when benchmarked against the for-profit sector?  Does a nonprofit CEO need to demonstrate some form of sacrifice by being less-well compensated?  Or should the social sector pay a competitive wage?  What would be the impact on your community?
  • Will donors and funders dictate the social sector’s future?  Will organization’s diversify revenue source?  Will donors demand organization’s merge or pool resources?
  • Will volunteers continue to contribute their time, talent, touch and treasure to the social sector?
  • Is a revolt coming?

What questions keep you up at night?  Are there assumptions that need to be revisited?  Are we assessing risk within the social sector?  Do we have tolerance for new messages and perspectives?  Should we be more optimistic or pessimistic?