And the problem goes well beyond just foundation dollars.  Most university-based technical support centers for nonprofits are in urban areas.  Unlike rural and remote communities, big cities tend to have a constant influx of young professionals that can potentially expand and diversify the volunteer talent pool available to nonprofits.  Corporate giving is bigger when corporations are bigger, and the biggest ones are usually in metro areas. 

These disparities between the nonprofit sectors in rural areas versus those in urban areas can result in a less strategic, less collaborative approach to regional problems.  With less resources and support to draw upon and more parochial concerns driven by localism, nonprofits in rural and remote areas might  understandably tend to narrow their perspectives and focus on their own survival.  In contrast, with more interconnected issues and communities in metro areas, urban nonprofits have more reasons and opportunities to develop deep and meaningful partnerships, and the large foundations that fund them frequently use their leverage to foster such collaboration.

While some funders like community foundations and united ways in rural areas may be inclined to commit their resources to regional concerns and promote long-term, comprehensive approaches to addressing them, there is pressure on them to continue to serve as ATMs for local nonprofits with limited fundraising capacities.

To some extent, private sector market forces seem to be in play here.  Smaller towns should have smaller problems, and they should need a smaller nonprofit sector to address them.  But the question is really one of quality more than quantity.  Problems rural communities face related to poverty, substance abuse, and youth delinquency, for example, are no less complex or intractable than they are in urban areas simply because there are fewer incidents of them.  Rural nonprofits need to be as well equipped and supported as their urban counterparts to deal with these problems, and arguably more so given the likelihood of a less aggressive governmental response to such problems in more conservative political environments.

Perhaps this is so because it is easier for lower income people to appreciate the need for charitable organizations.  If you’ve had to use a food bank or homeless shelter, or have friends and relatives who have, you might be more inclined to support them.  Buffett and Gates seem to be saying that we all benefit from the infrastructure of our society, which includes the nonprofit sector, and the most successful in particular have an obligation to recognize those benefits and support that infrastructure.

How lucrative a profession would medicine be if there was no public or charitable investment in medical research and technology, or hospital construction?  How vibrant a private sector would we have without the public and charitable investments that have educated generations? 

It’s a safe bet that two equally talented entrepreneurs would fare differently if one set up shop in a country with ineffective or non-existent public and charitable support for education, health, recreation, the arts, transportation and communication, while the other was able to take advantage of the civic infrastructure built and maintained in this country by the public and nonprofit sectors.

As Buffett and Gates bring more attention to our shared obligation to support charitable endeavors, they will undoubtedly also bring attention to the need for nonprofits to be more accountable for their performance, even if that is not their intent.  And that is a good thing.  Current economic conditions are forcing governments, businesses, and consumers alike to make adjustments and rethink priorities.  The nonprofit sector must do the same.

Hard times are when strategic planning is most critical.  There is only so much giving to go around and only so much talent available to serve on boards.  More collaboration and perhaps in some instances some consolidation among nonprofits may be required as the sector positions itself for the improving economic conditions that lie ahead.  Hopefully, Buffett and Gates have started a conversation that will increase charitable giving, and not just among the very wealthy.  If so, the burden is on nonprofits to demonstrate they are worthy of that support.

Here’s a story about how badly a nonprofit can behave behind closed doors.  Ironically, protecting this organization’s good standing with a valued donor caused its leaders to act recklessly and dishonorably.  They succeeded in covering up their misdeeds, and won back the donor’s trust.  It’s unclear whether the experience ultimately brought about any positive changes in how this particular organization operates, but others can surely learn from it.  

It began when the president of a very prominent company sent the organization a letter expressing his extreme displeasure with how the organization was characterizing his industry in a ballot measure campaign that involved an issue central to the organization’s mission.  The letter indicated that the organization could no longer count on his company’s support.  Senior management got together and came up with a set of talking points for staff aimed at addressing the donor’s concerns, but inexplicably no one from the organization bothered to answered his letter.  Not yet scandalous, but clearly poor management. 

The ballot measure campaign ended, months passed, and the angry company president who wrote the letter retired.  The organization’s CEO set up a meeting with the new president at this company to mend fences.  Beforehand she was briefed by her staff about the ballot measure campaign so that she’d have her facts straight and be ready to finally address the donor’s concerns.  Well, it turned out that the new president really didn’t care much about the details of the campaign.  He simply wanted to know how it could be that no one at the organization ever answered his predecessor’s letter.  Perhaps recognizing that there was no good answer to his question, the organization’s CEO made one up – she told him that the letter had in fact been answered several months back.  Still not a scandal, but it turns out she opened the door to one. 

The CEO left the meeting believing that she had made some headway with the donor and asked a staffer to prepare a letter of apology, explaining that while the organization was committed to winning on the issue it allowed its campaign consultants too much leeway and they were responsible for the messaging that had offended the donor’s former president.  Sure this would mean eating a little crow and rewriting a little history in the process, but she had to keep the customer satisfied.  No scandal there. 

After the apology letter was drafted but before it was sent, the CEO came up with a remarkably bad idea – date the letter as if it had been sent months earlier to the donor’s former president, and send a copy to his successor, explaining that this is the reply that had been sent at the time.  And if that wasn’t strange enough, the CEO had the letter signed by the chair of her board, using her electronic signature without telling her what she was doing.  Several senior managers knew what the CEO was up to but no one tried to stop her.  Now that’s a scandal.  

With scandals in general, so often the cover-up is worse than the crime.  Here, the cover-up was the crime.  The organization’s failure to reply to the angry donor’s letter was a misstep, but compounding the error by falsifying a reply months later was unforgiveable.   The CEO’s decision-making would be considered amateurish is she were at the very bottom of the organization’s flowchart, but this was a highly compensated, seasoned veteran overseeing a multi-million dollar operation with well over a hundred employees in several states.  

The story would be bad enough if it ended there, but there’s more.  After a little time passed a staff member who was aware of what had happened filed a grievance against the CEO with the board of directors under the organization’s ethics policy.  The board, including the chair whose electronic signature was affixed to the fraudulent letter without her knowledge, closed ranks behind the CEO (who had appointed most of them), and in a secretive process administered a gentle slap on her wrist.  In time, the staff member who had filed the grievance was pressured to leave the organization, and the board member who took the lead in shepherding the grievance through to its inconsequential resolution ended up taking over for the CEO when she retire gracefully a couple of years later. 

While the facts here are somewhat unique, the patterns of conduct are pretty familiar.  The organization obviously should have directly and promptly answered the letter from the donor; the CEO should have quickly admitted to the donor’s successor that she misspoke when she told him a reply had been sent; staff aware of the CEO’s intent to send the fraudulent letter should have tried talking her out of it; the board should have taken serious action against the CEO even if it chose to do so quietly without disclosing it to the aggrieved donor. 

Although a lot went wrong here before the matter reached the board of directors, perhaps the biggest lesson to be learned is that board members need to check their loyalty to the CEOs that recruit them at the boardroom door.  Employees, even at the most senior level, come and go and ultimately are rarely the reason donors, volunteers, policy makers, the media and the general public hold nonprofits in high regard.  Board members needn’t micromanage the day-to-day operations of the nonprofits they lead, but they must vigilantly safeguard the credibility and transparency of those operations.

For example, a national foundation recently designed a grant program to fund youth advocacy projects aimed at addressing the obesity problem through public policy strategies.  Specifically, this foundation hopes to learn more about how best to effectively engage youth from communities with high rates of obesity in policy advocacy.  The call for proposals invited applications from partnerships between academic researchers and community groups. 

This alone would assure that new alliances would be explored across the country even though very few would ultimately be funded.  And then, during the proposal development process as these new partnerships sharpen their focus and put together the programs they hope to get funded, they will inevitably expand to include other groups in their communities.  Local policy makers will be consulted to help gauge the feasibility of projects.  It is not uncommon for efforts like these to take on a life of their own such that the grant itself becomes much more a means to an end rather than the ultimate goal. 

In this sense, the foundation has advanced its mission without writing a check, and in many more places than it planned to fund.  By the time the funding decision is made and a small handful of applicants get the good news, there likely will be many more projects at various stages of development around the country which might never have gotten off the ground had the foundation not put out its call for proposals.

I was reminded of this recently while attending a diversity training for an organization I’ve been volunteering with for awhile.  As an ice breaker the facilitator asked everyone in the room for a show of hands regarding party affiliation, and the results were surprisingly mixed.  I say surprising because I think for a lot of people the same set of values and beliefs that lead them to vote a particular way also help them pick which charitable causes to support. 

The bottom line is that both of these organizations are working hard to solve serious problems, and their missions are broad enough to attract support from donors and volunteers across the political spectrum.  A lot has been written lately about young people opting out of participating in the political process and instead volunteering with nonprofits in their local communities where they feel they can have a more meaningful impact.  Politicians should take note that neither side has a monopoly on good ideas or caring, civic-minded people to implement them.

Nonprofits can play a significant role in educating the public about the issues on which they have expertise and credibility.  Because of the complex rules governing how nonprofits communicate with and about elected officials, many organizations choose to sit on the sidelines and refrain from helping the public better understand the issues of the day.  That might be okay if the media was doing its job better, and a well informed public was demanding and getting responsive action from its elected leaders.  Until then, nonprofits should consider how they can help raise the level of public debate over issues that are central to their missions.

A great example of how this can work is Houston Communities for Safe Indoor Air, a coalition formed several years ago that brought nonprofits from Houston’s minority neighborhoods into the campaign to restrict smoking in all workplaces.  Most of these nonprofits were social services agencies without a lot of experience in policy advocacy.  But they knew their constituencies, and they understood the disproportionate impact that tobacco use and exposure was having on the health of their communities.  Individually and even more so as a coalition, these nonprofits were ideally suited to educate their constituents about the issue and the process, and the grassroots activism that resulted from this public education helped push a smoke-free workplaces ordinance through the city council.  Read more about their effort at www.hcsia.org.