Not-for-Profits: The Only Guaranteed Investment

"Our current economic situation", variations on this phrase seem to mean the same thing no matter how historical perspective winds up defining that time: economics are uncertain. The best of times are no more than the times of greatest confidence--often viewed in retrospect as times of over-confidence and excess--whether the 1920s, the 1980s or the late 1990s and early 2000s. However each of these brief eras began with the last shivers of fear hanging on from times of economic strife and ended with a growing foreboding that could only result in financial disaster. It's enough to leave one wondering whether the financial world is either good or bad beyond the thought that it is so. In this most current economic situation the non-profit sector is full of fearful wondering, preemptive belt-tightening and, more often than not, dumbfounding success. Is this success merely a matter of exceeding lowered expectations or is there a more positive principle at work?

Investment in capitalist enterprise suggests and even demands capital return. Investors have a wide range of priorities but underlying all of them is financial return. The more uncertain we are of reaping that return the less likely we are to make such investments. Donations to non-profits on the other hand provide highly reliable returns which are no less than two-fold. First there is the return in the form of an improved institution and second there is the federal tax break. Further returns are of a more altruistic bent (to explode that word into its underlying hypocrisy) in the personal satisfaction of one's involvement in a non-profit's achievements and the benefits garnered by its clients and associates. These may take a more personal or interpersonal bent in your continued enjoyment of the local symphony or your satisfaction in witnessing the difference social programming makes in the lives of poor children or even your pleasure in others' enjoyment of that same symphonic performance.

All this is not to say that investment in non-profits is without risk. As with capitalist enterprise investment in a shaky proposition may be a matter of throwing good money after bad. While helping to prop up a promising but struggling non-profit provides the biggest bang for the buck, money does not solve all problems. Maintaining life support for flawed programming may incur significant emotional and financial costs to the community as well as the individual investor in the long run. Responsible investment in non-profits requires as a high, if not greater degree of due diligence than is advisable in the for-profit world.

The non-profit world recognizes that contributions are a luxury, that each of us places investment in non-profits at a different point in our hierarchy of needs. For those at the top of the scale who are accustomed to earning income from for-profit investment and those at the various bottoms where their income is near or below the demands of their chosen lifestyles that luxury may be unaffordable.

In time the scale will shift. Unquestionably challenging economic times are times of reevaluation and resetting of priorities. As we adjust to a world of diminished fiscal expectations and reestablish our investment habits more and more of us will take comfort in the certainty of investment in non-profits.