How We Fund Things
A recent meeting shows how efficiency and effectivness aren't always the goal
I was in a meeting at a local community center with a couple dozen of the community’s most dedicated leaders — some from government, others from foundations, others from front-line nonprofits. These are the environments where I feel most at home. My experience in local government as a former elected official and in the nonprofit world as the leader of one of the largest nonprofits in my home county lets me keep both feet firmly planted in both worlds. I know the people, I know their work, and I speak their language.
Near the end of the meeting, a local foundation leader mentioned the development of a potential new nonprofit and said, almost in passing, “We fund over thirty-one feeding projects in this county.”
The meeting moved on, but I couldn’t.
Thirty-one. I live in a county of about 108,000 people — not large, but not exactly rural either. To put that number in context: there are more feeding programs in this county than supermarkets, grocery stores, and maybe even gas stations combined. That’s a lot.
Thirty-One Programs and Not a Drop to Drink
Food insecurity is a pressing issue here. Supermarkets and grocery stores exist, but they’re largely inaccessible to people without a vehicle, and our county’s public transit doesn’t run on a fixed-route system. So the need is real — I’m not questioning that.
What I kept turning over in my mind was how a funder decides which of those 31 programs to support. My gut says that nearly every feeding program that asked for money from this foundation got it. Maybe I’m wrong, but 31 feels less like a curated portfolio and more like an open door.
And if we’re honest: are all 31 programs serving the same number of people? Of course not. Are some serving special populations? Perhaps. Are some serving overlapping ones? Almost certainly.
So how do funders decide? Is it easier — politically — to fund everyone? Do the metrics that executive directors labor over in year-end performance reports actually influence anything?
Price’s Law in Action
I’ve written about Price’s Law here before. Briefly: half the output in any system comes from the square root of its participants. Think of a 25-man baseball roster — collectively, the top five players account for most of the team’s hits. Got sixteen spices on your rack? You probably reach for four of them most of the time.
Why would feeding programs be any different? With 31 programs, roughly five of them are doing the lion’s share of the work. What about the other 26? Are they funded out of convenience? Out of relationships? It’s hard to argue they’re being funded strictly on effectiveness.
Are We Funding for Effectiveness?
If five of those 31 programs are producing half the results, are they receiving half the money? I honestly don’t know — but I wouldn’t be surprised if the answer is yes. The real problem is what happens to the other half: spread across 26 organizations we know, statistically, aren’t performing at the same level. Are those checks calculated investments in the community, or participation trophies?
A better approach might be to direct 80–90% of dollars allocated for a specific activity to the top-performing organizations, and reserve the remainder for new or innovative programs that emerge over time.
I know it sounds harsh to say that 26 programs shouldn’t be funded. And there may be legitimate arguments for occasionally supporting a less-efficient program — a new model worth incubating, a population no one else is reaching. I also understand that funding a wide array of organizations lets foundations demonstrate broad community investment. That’s a real consideration.
But the workhorse organizations — the ones that have shown up year after year delivering real results — aren’t well-served in a participation-trophy world.
Funders should be in the business of funding programs … not organizations.