Funders: Stop Asking for Budgets

This message is for funders. Listen up. I know that you are rarely told what to do by grantees. That wouldn’t be prudent. And other funders would never suggest how you should run your foundation. So I am stepping up to the plate with a very firm suggestion for all funders.

Please stop asking your grantees for budgets.

Shocking isn’t it? I know. I bet I got your attention though.

I wasn’t put up to it by grantees. But I have heard their complaints and concerns. By the way, they don’t even know that I’m talking to you.

My request comes from my 19 years of nonprofit financial experience and as a consultant to hundreds of organizations that spend too many staff hours creating budgets that you require.

These staff hours could be spent addressing the very issues that you fund them to accomplish. You give them grant money to protect the rights of immigrants. You give them grant money to create alternative supportive housing. You give them grant money to fight corporate welfare.

But instead of organizing strategy sessions and mobilizing youth, they are poring over spreadsheets trying to figure out how much paper they will need to buy or what the telephone will cost in six months.

This request doesn’t emanate from a desire on the part of grantees to avoid work or because numbers and finances are too complicated or too difficult for them to understand. I am asking you to stop asking for budgets because they don’t really tell you what you think they tell you or what you really want to know.

I’ve heard from some funders that budgets tell them something about the health of an organization. That’s interesting to me since budgets are simply plans not actual reality and don’t tell you anything at all about a grantee’s financial position.

And if you’ve ever accepted or even required a budget that balances income and expenses exactly to zero and believed that budget, I’ve got some AAA rated Mortgaged Backed Securities to sell you.

So if you know that the budgets are fiction and the grantees know that they need to write you fiction, who is really served by this exercise. Yoo-hoo, emperor, you’ve got no clothes.

What I think you do want to know is, what will they do with the grant money? How will they spend it?

You can know that when you read the narrative section. They tell you they will hire X amount of organizers in Y community to oppose a big oil company. They tell you they will file a lawsuit against X school district for violating the Safe Schools act that protects gay and lesbian students. They tell you they will produce a video/DVD about the importance for people and the planet of eating organic foods.

If you believe in their cause, think their goals are achievable, deem their methods and strategy sound and determine they have the capacity to be successful, then what else will the budget tell you?

Think about it and get back to me. I’d love to hear what you have to say. Really, I would.