“It’s like ten thousand spoons, when all you need is a knife ...” (lyrics from “Ironic,” by Alanis Morissette). I heard this ’90s song on the radio the other day and realized that line reminded me of what happens sometimes with nonprofit funding.
Nonprofits love and respect our donors. In most cases, we could not do the work we do without them. Often, when a donor is passionate about an issue, he or she may have ideas about where funds may be most impactful. We honor donor wishes and restrict funds to certain uses if a giver shares specific requests with us (e.g., to support programs for preschoolers, or for building a facility, or even to help cover administrative costs). These funds are wonderful, and we welcome donor instructions, but occasionally, these restrictions can lead to having too much money designated for one program and not enough for another (too many spoons, no knives).
I will share what great types of things can happen when funds are left unrestricted. First and foremost, unrestricted funds allow nonprofits to be flexible in solving problems. For example, grant funds that support affordable housing programs may be restricted to categories such as rent subsidies, insurance, furniture, utilities, critical repairs or weatherization work. These are all important, but what if a family has all of that but really needs and cannot afford blackout curtains to help one family member reduce the occurrence of daily migraine headaches? There is no grant for that type of assistance, yet these unexpected and unusual issues are what our local nonprofits face every day. When they have flexibility in how they use funds, they can fill in the gaps where restricted funds cannot go. When someone has finally overcome his or her resistance and comes to a nonprofit seeking help to make a situation better, it is important to be able to have the flexibility to help the person make progress on the issue at hand, or else hope can be lost.
Additionally, unrestricted funds are often used as matching funds for grants or as a demonstration of community support for an organization or program. These matching funds can be leveraged to bring many multiples of their value in additional funds into our community. Without them, some significant awards would certainly go away.
You may be concerned that funds without specific directions may not be spent well. It is helpful to remember that all nonprofits have a volunteer board of directors that are charged with oversight for the financial responsibility of the organization. Additionally, most of the well-known local nonprofits have annual audits of their financial documents and procedures. Finally, they are run by people who choose to do the tough work of caring for others. They are used to operating with tight budgets and see unrestricted funds as critical to giving them flexibility to achieve their missions.
How can you give in an unrestricted fashion? Typically, you can choose an option like, “Use my gift where it is needed most,” or you can simply write “unrestricted” on your donation form, in your check memo line, or in the comment box for an online donation. Consider this next time you give and allow the nonprofits to buy spoons or knives or curtains or food or whatever helps solve a problem! Thank you for Living United.
Lynn Urban is president and CEO of United Way of Southwest Colorado.