NVSQ Blog

When a microfinance institution deviates from its social mission, borrowers are the most harmed, but stakeholders are also affected.

Carlos Serrano-Cinca, Yolanda Fuertes-Callén & Beatriz Cuéllar-Fernández, University of Zaragoza, Spain.

Mission drift is a popular research topic with respect to non-profit organizations and, in particular, microfinance institutions (MFIs). The need for many microfinance institutions to generate profit often leads these institutions to lose sight of their social mission. The consequences of mission drift for borrowers and MFIs have been extensively studied. Mission drift usually reduces outreach, can be detrimental to the poorest borrowers, harmful to women, and disappointing to donors and social investors. However, the effects of mission drift on other stakeholders (employees, government, micro-savers, and banking creditors) have been insufficiently studied, a gap that our study seeks to address.

The Genesis of the Nonprofit Starvation Cycle

Mark Hager, Arizona State University

The nonprofit starvation cycle was named by Ann Goggins Gregory and Don Howard in a popular article in the Stanford Social Innovation Review in 2009. They did a lot to put the ideas on the map, but they are not the originators of the cycle. All the credit for the nonprofit starvation cycle goes to a guy named Ken Wing. Ken Wing? Yes, Ken Wing.

You’re maybe familiar with that SSIR article, or have heard the starvation cycle described. The idea is that too many nonprofits spend too little on administrative capacity like human resource and financial systems, information technology, and fundraising. Their low spending on these overhead costs (or, *ahem* fudging on how they report their spending) reinforces expectations among funders that non-program costs are not essential. This circles back to further disinvestments in administrative capacity.

I was working with Ken Wing when he first articulated his “circle” idea in the mid-2000s. He’s never gotten the credit he deserves for ideas that have been pretty popular over the past couple decades. I’m hoping that changes with publication of a new NVSQ article (ChiaKo Hung, Mark Hager & Yuan Tian), which features the unearthing of the “Wing Model.” However, you don’t get the full rundown of the genesis of model in that paper. So, I thought I’d Zoom with Ken and get more of his recollection.

Donor Reactions to Charities Highlighting their Religious Affiliation

By Jonathan Oxley, Trinity University.

Most charitable donations in the United States either go to a religious organization or a religiously affiliated charity. Giving to religious organizations such as churches, mosques, and synagogues represents the largest share of donations received in the United States, with Giving USA (2021) reporting that 29% of all charitable giving goes to religious organizations. However, this only represents a fraction of religious giving in the United States. Giving USA (2021) estimates that including donations to religiously affiliated charities as religious giving brings this figure closer to 75% of all giving in the United States. This expanded definition includes donations to large, well-known, highly-rated charities such as World Vision, Habitat for Humanity, Lifewater International, World Hope International, and Opportunity International.

Despite receiving nearly 45% of donation dollars in the United States, Scheitle (2010) finds that 22% of all religiously affiliated, non-church charities do not include a religious keyword identifier on their Form 990. This number increases to 45% for the second-largest category of religiously affiliated, non-church charities, relief and development organizations. My paper “Examining Donor Preference for Charity Religious Affiliation,” uses a laboratory experiment to explore how donor behavior changes with the inclusion of religious language in a charity’s description, with the goal of determining if religiously affiliated, non-church charities have a financial incentive to selectively display their religious affiliation. I find such incentives exist.

Building a Culture of Safety at Work in Charitable Organizations – A Practitioner Perspective on the Dialogue About Sexual Harassment in and Around Nonprofits

By Liz LeClair, CFRE. Chair, Women’s Impact Initiative (Association of Fundraising Professionals)

I am a fundraising practitioner with more than 15 years of experience in the charitable sector in Canada. I am also a survivor of workplace sexual harassment and sexual assault by donors. I have been a vocal advocate for safe workplace training as women in the fundraising sector are routinely placed in extremely vulnerable situations to do their jobs. Sexual harassment, bullying, and other inappropriate behaviours against front-line fundraising staff is a serious issue that must be addressed.

I first wrote about my personal experience being sexually assaulted and harassed by donors in January 2019 for the Canadian Broadcasting Company (CBC). Over the last two years I fought my former employers, and a major corporation, to hold an individual accountable for sexually harassing me over a period of four-and-a-half years. In a follow up piece in May 2021, the CBC did an extensive report on how my former employers, and the human rights system, failed.