Charging and Charities

Again this week I've had conversations about the need for charities to find new ways to generate revenue. I really believe that if we can't find our way past being entirely dependant on donors we are putting our future at risk.During a meeting last night one strong leader referred to the idea that non-profits must pay attention to the business side of the work because that's what allows us to do the charity side for one more day. He's exactly right.There is a time to give things away for free. New initiatives, emergencies, and caring for the truly destitute are examples. When we launched our leadership program we didn't charge for it, but now that it has proven valuable we do. If a student can't participate for financial reasons we will work with them to clear that hurdle, but most of them can find a way to chip in towards the cost of what they are receiving.Today Seth Godin makes a typically strong and related point:

Money creates a sort of friction. In the digital economy, magical things can happen when there is no friction. You can scale to infinity. On the other hand, sometimes you want friction.If you lead a group that allows anyone to join, for free, your group might be large, but it's not tight, it's not organized to make important change. Commitment slows things down in the short run, but ultimately aligns interests.

The limiting factor on the finances for some of the charities that will have to shut down due to currrent economics may not be the poverty of those they serve but the limited imagination of the leadership to charge a manageable fee for service.