This week, at my day job, I received a notice from one of our client’s funders.* It turns out our client underspent their grant funding by a low-five-figure amount. They simply completed their work under budget, and dutifully reported their spending down to the penny. (Literally: the records were flawless.) With all the charisma of a dried fish, the funder’s grants manager specified where a check for the exact remaining amount can be sent and, just as crucially, by when they expect it.
Never mind that a philanthropic foundation expects a check to arrive by mail in under two weeks. (Not even contractors try anything beneath Net 30, and they send actual invoices!) What I want to stress is that this isn’t a ~humble local charity~. This is an organization that reported over $500 million in capital gains income on their latest 990–and that is nowhere near their full revenue for that year.
If you live in the US, you learn pretty quick that the rich get that way by being more than a little stingy. The same applies for foundations, apparently.
Nobody wants widespread grift, and it’s admirable when an organization can report that they were able to complete their work under budget. It’s nice to say “we were able to complete a major project and still have funds left over.” But sniffing and hounding for something that would not amount to a rounding error is fairly gross.
More clearly: why the fuck do you need that money back?
I also deal with a lot of contracts with my day job, especially those between funders and nonprofit operations. I know that it would take a one-page agreement to allow a nonprofit to keep remaining funds. If it’s easy to beg back a check, it’s even easier to draft an MOU. (With Dropbox Sign, you don’t even need to find a stamp.)
The nonprofit funding environment has shown its cowardice since Trump 2.0–and it’s even more depressing that funders who have unimaginable resources are not showing an ounce of generosity in how they handle ethically reported and fully tracked underspending. If anything, wouldn’t you want to reward a nonprofit outfit that did the job with 80 or 90 percent of the requested funds? Why not draft an agreement that says “we cede these unspent funds for [general purpose / to advance the purpose of the original funding]”? If you need to recoup the underspending–for technical legal reasons, because your investment portfolio is somehow popping off even amid the bullshit in Iran that is wrecking everyone else’s retirement, whatever–you should actually spell that out in your communication requesting unspent funds back. Otherwise you’re just punishing nonprofits for being diligent and dutiful. Why be a i-dotting t-crossing rulenik when that’s how you’re thanked?
In America, the saying “you can’t take it with you” is only for those who don’t have enough to say “watch me.” It’s disappointing when billion-dollar foundations have a similar mindset
* I’m sticking with “client” because it’s a term that slightly covers up my specific line of work compared to the Current Best Terminology but also makes absolutely clear how I feel about this subfield.
Your Nonprofit Sucks 
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