426: Underfunding Is A Design Choice with Charity Fain

Reflections from host Sarah Olivieri ... The Underfunding You Accept Is a Design Choice, Not a Destiny A belief runs quietly through much of the nonprofit sector: being underfunded is simply part of the deal. That belief feels like realism. It's actually a design choice. When funding systems are unclear, unfair, or built by people far removed from the work, organizations compensate with unpaid hours, understaffing, and low salaries. Financial sustainability doesn't fail because leaders aren't trying hard enough. It fails because many funding systems were designed poorly—and most leaders treat those systems as fixed. They're not fixed. They were designed. And anything designed can be redesigned. The Conversation That Sharpened This I recently had a conversation with Charity Fain that sharpened how I think about nonprofit sustainability. The key insight: underfunding is often downstream of rules someone else wrote. Administrative caps, reporting requirements, and grant structures aren't laws of nature. They're decisions made by people. When you treat funding rules like weather, you adapt to them. When you treat them as decisions, you start influencing them. Get In The Room Before The Rule Is Written The leaders who change their funding landscape stop waiting for grants to appear and start participating in the conversations that shape them. That means serving on committees, joining advisory groups, and helping decision-makers understand what it actually takes to do the work. As Charity put it: "I just really wanted us to be sitting in those groups that were making decisions so that people had to listen to us." Visibility in decision-making rooms isn't networking. It's infrastructure. Influence happens before the rule is written, not after the grant is awarded. Your Staff Are Part Of The Community You Serve Another damaging belief is that nonprofit employees shouldn't expect strong compensation. The truth is simple: you cannot uplift a community while keeping the people serving it underpaid. Paying people properly reduces turnover, attracts stronger talent, and builds organizational resilience. This isn't a feel-good position. It's an operational one. Nonprofits Are Businesses—And Harder Ones Somewhere along the way, nonprofits absorbed the idea that they aren't real businesses. Anyone who has run one knows otherwise. A nonprofit is often two businesses in one: • A fundraising business • An impact business Each has its own audience, demands, and measures of success. That complexity means leaders must actively look for problems rather than waiting for them to become obvious. Build The Team That Outlasts The Crisis The best executive directors eventually stop trying to be experts in everything. You were never supposed to do it all yourself. The goal is to build a team where the finance leader knows more about finance than you do, and the program team knows more about programs than you do. That's not weakness. That's capacity. Organizations become resilient when responsibility is shared. What Becomes Possible When underfunding is viewed as a design problem rather than an unavoidable reality, something shifts. You stop adapting to bad rules and start influencing them. Paying people well stops feeling risky and starts looking practical. The burden of carrying everything alone begins to lift because the team is built to carry it together. The Work That Holds This isn't about doing less work. It's about doing work that holds up. Nonprofits can have enough money. They can pay people well. They can stop accepting rules that were never built for them. Not by suffering more quietly, but by getting into the rooms where decisions are made, building strong teams, and creating systems that support the mission. About the Guest Charity Fain has more than 25 years of experience building stronger, more resilient communities in the U.S. and internationally. As Executive Director of Community Energy Project, she leads the organization's strategy, growth, and impact. Prior to CEP, she served as Executive Director of the City Club of Portland and previously worked as Country Director for Internews Network in Kyrgyzstan. Connect with Charity LinkedIn:   / charity-fain-8003234   Website: https://www.communityenergyproject.org/