Comments on: Dartmouth's Wacky Business Model http://www.annualgivingexchange.com/2009/06/22/dartmouths-wacky-business-model/ Dan Allenby's Blog Thu, 10 Jun 2010 23:34:17 +0000 http://wordpress.org/?v=2.9.1 hourly 1 By: Jonathan Peizer http://www.annualgivingexchange.com/2009/06/22/dartmouths-wacky-business-model/comment-page-1/#comment-14 Jonathan Peizer Wed, 24 Jun 2009 17:16:00 +0000 http://danallenby.wordpress.com/?p=692#comment-14 There are actually two measurements of import: efficiency and efficacy. A nonprofit can be extremely efficient but still ineffective at carrying out its mission. In fact most nonprofits have the opposite problem. They are quite effective at carrying out their missions while suffering from chronic inefficiencies. There is a systemic problem in the donor funding model related to nonprofit capacity support. Most donors try to limit their funding of capacity in favor of programmatic funding. There is actually a logical reason for this but that's for another post -- suffice it to say what's good for foundations is not necessarily good for NGO's in this case. Because NGO capacity is most often chronically underfunded (unless they can support their own operations through revenue and not subsidy) NGO's are almost by definition inefficient to some degree -- think of a business that can not invest in itself properly. Amazingly however, despite this problem many are still quite effective at their mission work despite being inefficient. There are actually two measurements of import: efficiency and efficacy. A nonprofit can be extremely efficient but still ineffective at carrying out its mission. In fact most nonprofits have the opposite problem. They are quite effective at carrying out their missions while suffering from chronic inefficiencies. There is a systemic problem in the donor funding model related to nonprofit capacity support.
Most donors try to limit their funding of capacity in favor of programmatic funding. There is actually a logical reason for this but that’s for another post — suffice it to say what’s good for foundations is not necessarily good for NGO’s in this case.

Because NGO capacity is most often chronically underfunded (unless they can support their own operations through revenue and not subsidy) NGO’s are almost by definition inefficient to some degree — think of a business that can not invest in itself properly. Amazingly however, despite this problem many are still quite effective at their mission work despite being inefficient.

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