Anna Loewer: Five & Rising says nonprofits are 5.2% of GDP but still get treated like charities. What does it actually mean to treat nonprofits like businesses, and why should that matter to us?
David Monroe: Nonprofits have two bottom lines: They need to be great stewards of donated money and create real impact in the community—improving lives, protecting our environment, strengthening the common good. That's incredibly hard. Organizations have to do the work, not lose money, and improve people's lives. If nonprofits were valued like businesses that provide services efficiently, they'd be funded differently and treated with more respect.
Here's what I mean: nonprofits aren’t these side organizations that are charities, but rather we’re vital organizations that matter just as much as a construction company. One constructs buildings, the other constructs community, and you need both. If they were treated with equal favor, staffing would be easier because people would see a career for themselves in the social sector. The funding structure is challenging, too. A lot of funding is what's called deficit funding—you get dollars to solve a problem within a year and must spend them all. Organizations can't save for a rainy day or plan for emergencies like pandemics. They can't build sustainability.
Anna: If Five & Rising's approach takes hold in Western New York, how do you see it changing the nonprofit landscape here? What would success look like?
David: Some positive things could come out of this. We could see new funding mechanisms or different ways funding and outcomes can be connected, so organizations can think about both.There's this idea of "cost of care" going around right now, and that's great. But what Heidi Milch, our Executive Director, has been talking about is the cost of an outcome? Not just what it costs to operate, but rather what it actually costs to improve someone's life. Now that would be a powerful metric.
I also hope that the nonprofit world is viewed as a valuable, meaningful, and challenging career. I've been part of this sector since 2000, and what I really enjoy is that it's genuinely challenging work. If people were allowed to build a career—not just for the sake of more money, but also to imagine being with an organization for a long time—they would find it very meaningful.
Sometimes people work for a nonprofit, and then when they want to buy a house and have a family, they can't afford to stay. Or if they do, they have to lower their expectations for their family life. You shouldn't be trading a sustainable life for a mission. It should exist where you don't have to make a choice at all.
Anna: How could Five & Rising's philosophy affect how companies like ours think about working with or funding nonprofits? What should business leaders be paying attention to?
David: I think partnering and talking to the nonprofit sector—doing shared learning—would be really powerful. There's something about the way nonprofits build community that for-profits could probably learn, and vice versa. Nonprofits could learn about processes, mission-driven focus, and especially marketing, which for-profits do incredibly well.
Here's an interesting thing: when I talk to friends in business, they can't understand how nonprofit staff, who make very little money compared to their for-profit peers, continue to stay at an organization. If retention is tough despite high salaries in the for-profit world, maybe there's something to learn from nonprofits.On the flip side, businesses have what's called externalities—things external to the business like waste or environmental impact. What if businesses started thinking about that as part of their bottom line? Instead of dumping waste or paying expensive fees for ethical disposal, they could partner with nonprofits to find creative solutions. Nonprofits can provide those solutions, we just need the funding.
The irony? A business can receive funding and be unprofitable for several years, and that's fine. However, on the nonprofit side, not balancing your budget, despite improving the community and environment for several years, is seen as a crisis.
Anna: You talk about being "done with the broken system." What's actually broken about how nonprofits operate today, and what needs to change first?
David: From my experience, there's this joke that goes around: "If you wanted to make money, you wouldn't be doing this." Everyone laughs and nods their heads. That shouldn't be assumed. There could be well-paying careers in doing social sector work.Here's something important from a business standpoint: these jobs cannot be exported. You can't export environmental work—it has to be local. You can't export mental health work. You need to speak the language, understand people's experiences, and develop trusting relationships.
There's something to be said about investing in the nonprofit sector, as it provides stable local jobs that people can build careers on. These jobs aren't going to be outsourced and relocated to another country.
Anna: If this movement succeeds, what does the nonprofit sector look like in 5-10 years? How does that benefit everyone—nonprofits, businesses, and communities?
David: I'm imagining that for-profits and nonprofits actually understand each other and learn from each other. That could be really powerful. Rather than this dichotomy of us versus them—those who run businesses and make money versus those who care about communities and don't get much money for it—maybe there's a way to build a career in either sector and they can learn from each other.
Think about Habitat for Humanity. That's a great example of an organization connected to the construction community, but doing it for the benefit of the overall community, and they're learning from each other. What happens? It changes the neighborhood. There are new affordable homes for people who couldn't afford them before. People stuck in the rental cycle are now owning, and that creates generational wealth. That house stays with the family, not just that person. That's amazing.
Those are the kinds of examples that could be really valuable, and we could work together to imagine what that might look like.
If this conversation resonated with you, if you've ever wondered why nonprofit work can't be both meaningful and sustainable, or if you're tired of watching talented people leave the sector because they can't afford to stay, you're not alone. Five & Rising is building a movement to change how we think about, fund, and support the organizations that strengthen our communities. Whether you're a nonprofit leader looking for new approaches, a business owner exploring partnership opportunities, or someone who simply believes that doing good work shouldn't mean sacrificing your livelihood, there's a place for you in this conversation.
Learn more about how Five & Rising is reimagining the nonprofit sector at fiveandrising.org.