By Hildy Gottlieb, co-founder, Creating the Future

There are so many reasons the notion of accountability to donors is not only misplaced but factually illogical.

One of my favorite questions to ask board members is this one: “To whom is your organization primarily accountable?” With rare exception, a sizable portion respond almost reflexively: “Our funders/donors.” 

When I ask the follow-up question, “What about the community you serve? Are you not primarily accountable to them?” they generally think for a moment. They discuss. And they invariably come up with, “Well yes, the community. So I guess it’s both – the community and our funders.”

There are so many reasons the notion of accountability to donors is not only misplaced but factually illogical. I’m not talking about the significant ethical reasons that have been covered so well in racial equity and social justice forums. I’m talking about logic-based, fact-based arguments. Because once we begin down the logic trail, the entire donor-centric model of accountability begins to crumble on its own.

Some simple fact-based metrics

Let’s start with some simple logistical questions.

• If organizations are primarily accountable to donors, consider a fully endowed organization. With no donors to be accountable to, does that mean the organization is not accountable to anyone?
• If organizations are primarily accountable to donors, and a donor dies, is the organization still accountable to that person? What if it’s been 30 years since they died, and the world has changed dramatically — are you still accountable to that person’s wishes? Or are you accountable to their heirs? What if the heirs don’t care about your mission — perhaps their mother was an animal lover, and they could never understand that part of her. Maybe they even hate your organization. Are you accountable to the second and third generations of a donor who loved you, even if her heirs do not?
• If organizations are primarily accountable to donors, are they more accountable to the person who writes a $1 million check than to the person who gives $10? What if the $1 million came from Jeff Bezos, representing a fraction of his wealth, and the $10 came from a person who has little more than that $10 to their name? Are we talking about an accountability sliding scale?
• If organizations are primarily accountable to donors, are they only accountable to those donors who give cash? What if someone provides $1 million in free rent every year, or someone volunteers full time (40-hour weeks) for free? Are organizations equally accountable to those in-kind donors who don’t appear on the P&L?
• If an organization is receiving government funds, is the organization accountable to the official who approved the grant? The whole government? Or just that division of the government? And what exactly does “government” mean? Is it the individual employees who work there, or the elected officials? Or is the organization accountable to every taxpayer? Is your organization therefore accountable to me?

It’s about your mission

Moving beyond simple logic, let’s consider the effect of “primary accountability to donors” on the reason our organizations exist in the first place — to make a difference. It may go without saying, but when it comes to the topic of accountability, it is important to state explicitly: Our organizations exist — and our fundraising exists — to make a difference in our communities.

The reason this is important to say out loud is because accountability is not a nebulous, theoretical construct.

Accountability determines what will get done, for whom, and why.

The IRS understands this. Granting tax exemption for the sole purpose of providing benefit to our communities, the IRS is clear about where our legal accountability lies. It’s why the IRS can (and does) revoke tax exemption from organizations who provide no benefit, but they do not revoke that status if you fail to send a thank you note to a donor.

WHAT you are accountable FOR is the basis for determining WHO you are primarily accountable TO.  If organizations are legally accountable for providing benefit to the community, then by logic, the people to whom you are accountable are those community members who will receive that benefit.

Let’s take that mission-focused argument out a few more steps. We all know groups with very little money, who create dramatic impact. Let’s therefore look at what actually leads to mission success vs. accepting at face value the notion that the key to mission success is money.

ONE: Are we holding ourselves accountable?

First, successfully accomplishing one’s mission requires that we hold ourselves accountable for accomplishing those results. That seems obvious, but even just that simple statement puts a hole in the argument of accountability to donors. Because we accomplish what we hold ourselves accountable for.

What we’re saying when we focus our accountability on donors is that our primary accountability is for the money — the means to do our work — and only secondarily, if at all, for the end results those means are intended to create. 

The money. That’s how we talk about it, right? It’s not just “money” but THE money. 
How many conversations have we all been in, where it feels like mission is taking a back seat to money? Accountability for the money leads business-oriented board members to disparage programs that “don’t pay for themselves,” as if those programs are failed profit centers vs. avenues for creating healthy, equitable communities. That money-as-our-primary-accountability mantra may make sense in a business, but in an organization that receives a tax exemption in exchange for its focus on community benefit, this money-over-mission accountability is a dangerous red herring.

A second critical key to mission success is that our means be aligned with our desired ends. This is about walking the talk of our core values and our vision, being the future we want to see. And when it comes to alignment of means and ends, donor-centric accountability fails at every turn.

Here is just one example: 

Nonprofits routinely underpay staff, based on the inequitable compensation systems of the market, because paying more than market wages would supposedly compromise “wise stewardship of the money.” 

That “wise stewardship” leads, for example, to paying market wages to employees whose job is to physically care for people with disabilities, who can’t care for themselves. Often those employees could earn more working at McDonald’s, with a lot less stress. Factoring in the direct financial implications of burnout, turnover, and retraining, the result is not only more financially costly; it is harming the reason that organization exists — to provide compassionate care to people who need that assistance. (And yes, this is a real story. The group in question asked me what to do about “morale,” because their annual turnover was 250%. That is not a typo.) 

Focusing their primary accountability on the money, we see board members spend a huge percentage of their time discussing financial matters, and often zero time discussing what success would look like in their community. And of course, that focus on the money is the impetus for wanting to fill boards with business people in the first place.

TWO: Are our means aligned with our desired ends?

A second critical key to mission success is that our means be aligned with our desired ends. This is about walking the talk of our core values and our vision, being the future we want to see. And when it comes to alignment of means and ends, donor-centric accountability fails at every turn.

If we want a community that values every person, that shares power regardless of financial means, that values democratic principles, then we will walk that talk in the way we do our work. 

In reality, though, values are often tossed out the window when money is on the table. Suddenly, our primary values become, “But we need the money!”

I once found myself in conversation with board members from a federally funded health center, who all listed patient health as their highest priority. However, one board member kept insisting, “We can only prioritize patient care to the extent we have the money to do so.” 

So I took a sheet of paper and wrote “Values Statement’ at the top. Then I wrote, “Our primary focus will always be the health of our patients, as long as we have the money to do so.” I asked if that is what they would like to post in their lobby. 

Suddenly their sense of accountability shifted.

THREE: Are we building relationships?

A third key to mission success is building relationships. Not only does the scarcity-driven focus of donor-centric accountability skew which relationships we prioritize, it actually devalues the relationships we have with people who donate! 

While fundraisers are taught that fundraising is about relationship building, the reality is that those are not real relationships — they are transactional relationships, and donors and funders know that. Here is what “fundraising is about relationships” really tells a donor:

• If you give us money, we will be your friend. 
• If we think you will give us money, we will court you as our friend. 
• The more money you give us, the more friendly we will be.
• If you fail to give us money, we will eventually stop calling you. 

If we truly valued donors as people, we would stop categorizing them as LYBUNTs and SYBUNTs. We would stop seeing people as walking wallets. Having spent time working at a foundation, I can share the degree to which foundation officers stay always on their guard, mistrusting relationship motivations they know are rooted in the hope of eventually getting funded. 

This current system makes everyone involved feel uncomfortable at best, manipulated at worst. 

That leads to the fourth key to mission success:

FOUR: Do no harm

Would you believe me if I told you the only way to accomplish your mission is to lobby legislators, asking them to benefit the rich and powerful? Of course not.

But that is what we are doing when we focus our primary accountability towards those who provide funds for our work. We are reinforcing and actively perpetuating the very power and privilege that our work is attempting to remedy, from poverty and healthcare to education and the arts. 

To paraphrase Audre Lorde, we have convinced ourselves that using the tools of the master’s house will somehow convert that house into a home for all of us.

What we can do instead

We will stop seeing relationships as a means to the ends of financial success. We will instead see funding as one of many possible on-ramps to the kinds of real relationships that create change — action relationships, trust relationships, true friendships.

The only way social change groups will accomplish our goals is to walk the talk of the future we want to see. If we want to see healthy, equitable communities, we will walk that talk in everything we do. We will value donors just as we value all other community members who care, not because they are community members with money. 

If we want to see communities that value people over money, we will not work counter to our values because “we need the money.” We will encourage funders and donors to have a different relationship with our work. WE will invite THEM to the table, because THEY need US. After all, without organizations who do actual work in community, all donors and funders have is money. We have what they need.

We will stop seeing relationships as a means to the ends of financial success. We will instead see funding as one of many possible on-ramps to the kinds of real relationships that create change — action relationships, trust relationships, true friendships.

We will learn to share non-cash resources like buildings and vehicles and volunteers and knowledge, because sharing builds trust, and trust is required if we are to link arms to create change. 

And the first change we will create is to re-imagine funding systems that perpetuate the world of power and privilege. Many funders want that change as well. As for the others, well, that is where the work is. 

And that’s the final reason it is important to focus our primary accountability on the community: You will be teaching donors and funders how to BE in a world without money-focused power and privilege. You will be teaching them that they are members of the community, just like everyone else. Focusing accountability on community results is one way to help them see a different path. 

And when it comes to social justice work, that focus on community is where the real work begins.