The Great Disconnect

Date: September 19, 2022

I have always loved writing.  I like to think I’m pretty good at it, too. 

One of the reasons I started Broad Oaks Consulting in 2018 was so I could write and share some of my many thoughts and ideas with others.  You know, the ideas you share with friends and acquaintances, and they say, “You should write about that!”

Here we are, 4 years later, and “write one blog post a month” is still on my “to-do” list every. Single. Month. 

With the launch of the new Broad Oaks Consulting website and service platform, I’m inspired to begin this blogging journey and hope you’ll come along for the ride and find inspiration and information, regardless of your chosen field of endeavor.

I spent the first decade of my career in wealth management, first on the insurance side of the business and then in capital markets/retail brokerage.  (This wasn’t an intentional career choice.  I doubled majored in Spanish and Communications Studies with an emphasis in rhetoric in college, but we’ll save that story for another day.)

Like most people in my industry, I never gave much thought to nonprofits or nonprofit work.  The most exposure I had to nonprofits was through my church growing up.  Nice people, but certainly not business savvy. 

Over time, I began to subscribe to a commonly held belief among many business professionals: nonprofits are where people who can’t hack it in the for-profit world go to work.  To be honest, I still largely believe this. 

(If you’re a nonprofit professional…keep reading!)

Why do I still believe this? My experience in the nonprofit sector has shone a light on the disconnect between wealth management and philanthropy.  There are many reasons why this disconnect exists and it is the goal of Broad Oaks Consulting to bridge that gap to make our communities better places to live, to raise our children, and grow old. 

Part of the disconnect lies in the public’s perception of nonprofits.  While I have not conducted a formal study on this topic, here’s what I can share from my own life experience:

  1. People assume that because I work for a nonprofit, I must not make any money.
  2. People assume that because I work with nonprofits, I must be volunteering my time. (As a side note, I particularly enjoy it when people tell me that “it’s lovely that I have something of my own to occupy my time while my husband is as work.”  Welcome to the south, y’all.)
  3. People assume that unless your nonprofit is university foundation, your organization must have zero dollars in reserves.
  4. People assume nonprofits are full of do-gooders who don’t have a clue how to run a business. 

Do any of these ring true for you?

Now, I know I’m going to offend some of my nonprofit colleagues, but if we really take a hard look and are honest with ourselves, some nonprofit professionals have a tendency to perpetuate these beliefs/stereotypes.

  1. Nonprofit Compensation. There is a deeper topic to explore when it comes to nonprofit compensation, but just because someone works for a nonprofit does not mean they aren’t earning a decent living.  It also doesn’t mean that, if you choose to work for a nonprofit, you don’t deserve to earn money!

    However, nonprofit professionals tend to lament their “low” wages, even when they are earning $100k+. Could you make more money in the for-profit world?  Probably.  But as professionals, it’s important to advocate for ourselves to educate others, rather than taking the easy road and letting it slide.

    If you feel you are well compensated for your job, when you’re around people who are skeptical about your salary or position, rather than rolling with it and laughing it off, it’s perfectly acceptable to say, “Actually, I’m quite fairly compensated in my industry and I also have great benefits.  In fact, I make more than 85% of Americans” (which is true for anyone making between $100-$150k).

    Feel free to go on and say, “I could probably make more in the for-profit sector but preventing children from becoming homeless (or whatever you do...what’s your impact? why do you do what you do?) satisfies me in ways money cannot.  Thankfully, my Board of Directors doesn’t think I should have to choose between saving lives and making a decent living.”

  2. Working to advance nonprofits. There are myriad nonprofit consultants out there who have built very successful businesses.  We are business professionals.  Can we charge as much as for-profit consultants?  Some do.

    Like any business, fees for our services run the gambit, but just because someone chooses the nonprofit sector as their target demographic does not mean they are volunteering their services.  Nor should they.  We deserve to be paid for our expertise like any other professional. To my consultant counterparts, do not give away your time and talent for less than you deserve; to those seeking our services, few of us are in this to get rich. We simply require fair compensation for our time and talent.

    And Board of Directors, if you want your organization to grow, you must invest in it.  Be wary of anyone who promises to raise a specific amount of money for you, to bring you a specific list of new donors (aka, open their rolodex to you), or otherwise makes promises that seem too good to be true. As in any business, there are those who deliver and those who do not.  Do your homework but do not be afraid to invest in your future.

  3. Reserves. The issue of reserves is an interesting one (and different from creating an endowment).  The word, “nonprofit” implies that at the end of the year, you will not have a profit.  Many nonprofit boards and executive directors plan to either zero out their balance sheet or run a deficit each year.  This is largely because many nonprofits started as government projects or are run by those who ran government projects.

    With many government grants, you must use the entire grant in the stated amount of time.  Any leftover funds are forfeited.  In addition, if you are awarded a government grant and do not use all the funds, you’re not congratulated on great fiscal management.  When you apply again the next year, you will almost certainly not be awarded the same (or additional funding) – even if there is a greater demand for the need you fill – and you run the risk of not being awarded at all.

    I have many feelings about government grants which is why my work has been largely restricted to privately funded nonprofits, but this particular practice is one that is a plague to the nonprofit community.

    Nonprofits are businesses – and most of them small businesses. They have identified a need, raised capital, and employed people to fill that need.  As with any small business, smart fiscal management is paramount to success, which includes maintaining a reasonable amount of capital reserves.  Typically, I recommended somewhere between 6 months and 3 years of reserves.

    “But what does this say to our donors?” the nonprofit professional wants to know.  I remember when I went to work for a large, successful nonprofit in Chicago.  The need they fill is great and I assumed they must be desperate for money.

    On my first day of employment, I learned they had about 2 years of reserves on hand.  I remember calling my husband as soon as I left the office and saying, “I don’t think I can do this job.”

    “Why not?” he asked.

    “They have 2 years of reserves on hand.” I said, aghast.

    “Wow. I think I need to start giving there,” he replied.


    He went on to explain.  “One of the reasons I don’t like giving to charities – especially social service charities – is that I don’t feel like they have good fiscal management.  The ability to meet their budget every year and maintain a reasonable reserve tells me they have great financial oversight and use their money efficiently to ensure they will always be there to serve our community.”

  4. Do-gooders. Nonprofits ARE full of do-gooders. The reason they are not often respected as business professionals is that many neither educate themselves as such, nor do they hold themselves out as such.

    In nearly every training or speech I give to development professionals I start out by asking the group, “Who read the Wall Street Journal this morning?”  Maybe one hand goes up.  “Okay, who watched CNBC this morning while getting ready?” Typically, no hands go up.  “So, tell me: how can you sit across the table from you donor and ask him/her/them for their money when you don’t even know what’s going on with their money?”

    Time and again I hear Development Officers say that financial advisors or estate planning attorneys won’t return their calls, don’t listen to them, or won’t take them seriously. Why should they?  The vast majority of nonprofit Development Officers don’t have a clue about what wealth managers and lawyers do or the role they play in their clients’ lives.  THEY are the trusted advisors.

    The only way to change that dynamic is for nonprofit professional to stop referring to themselves as “the Chief Begging Officer” and start treating themselves like their donor’s Philanthropic Advisor.   Become educated.  Understand donor assets and how they are structured.  You don’t have to be an expert – there are people for that – but learning the basics of asset and protection products will go a long way toward building relationships – both with your donor and their trusted advisors – and growing your nonprofit revenue.

Nonprofits are largely funded by average people giving what they can to causes about which they care.  They don’t do it for the tax incentives and even in down markets and through natural disasters, giving in the U.S. tends to stay the same or grow. 

Getting Oprah, Bill and Melinda Gates, or Mackenzie Scott to make a grant to your mission is not a viable development plan.

The reality is that the vast majority of high-net-worth and ultra-high-net-worth individuals are not overly philanthropically inclined.  And that’s okay!  No one is under any obligation to give their money to charity!

It is up to the nonprofit community to inspire people to give, to show them how their contributions – combined with others – change lives and save lives, and to demonstrate their competence as leaders who transform the world.  

It is my goal to show you how to create inspiration and provide you with the education you need to help your donors and clients strategically deploy their generosity to have the greatest impact.

Interested in becoming more educated on leveraging asset and protection products?

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