Greece, Illinois, and Lack of Common Sense

Does it make sense for a nonprofit arts organization to ask a homeless person to contribute to a fund to buy an expensive painting for a museum?  Does it make sense for a charity to ask a business that is going under to give a major gift to their organization?  Does it make sense to ask an individual who has lost their home to foreclosure for a donation for an animal sanctuary?  Does it make sense to ask a person who was recently downsized (laid off) at the end of their career to make a large pledge for a children’s summer program?

If you have read or watched the news over the past few months, you are aware that Greece is  in some financial hot water.  The country’s leaders have borrowed money to run their country for such a long time and at such an unsustainable rate, that they have dug themselves a hole so deep that they will probably never get themselves back in the black.  They spent more money than they had coming in, and now that spending has come back to haunt them.  They nearly left (or were forced out of) the Euro zone, and now they are  forced to comply with more austerity measures in order to borrow more money so they can make a payment to their lenders.  The fact is, they continued to spend more than they had, instead of making cuts and changes at an appropriate time, and now the chickens have come back to roost.  The Greek people are not happy, the other countries in the European Union are not happy, and the economy there will suffer for years.

The state of Illinois, my birthplace and current home, is in a similar predicament.   The irresponsible legislature and past governors have continued to spend money they did not have for years, signing contracts with scores of nonprofit organizations for human services, and provided grants for others, all the while skipping payments to their employee retirement system and taking out loans that they cannot pay back, and now their actions have come back to haunt the state.

Frustrated voters elected a new governor to turn things around, but also re-elected the same legislators who caused the mess in the first place, and problems continue here.  The Legislature proposed a new budget with a gap of over four billion dollars, and Governor Bruce Rauner refuses to sign it into law.  Many organizations have been informed that their contracts have been cancelled, and now many will have to reduce services and some will close their doors.

The financial messes in both, Greece and Illinois, have been going on for years, but many nonprofit organizations continued to exacerbate the problem by continuing to approach the governments for their financial support.  And sadly, many still do seek more support from governments that do not have money.  In Illinois, the state enacted a temporary tax hike that caused scores of businesses to leave the state for greener pastures, creating more unemployment and a lower revenue base.

I believe it is time for these nonprofit organizations to stop blaming the governor who is trying to fix a problem that has been brewing for years and years, and start blaming those who are truly responsible for their financial woes:  The irresponsible politicians in the state capitol and those who look back at them in the mirror.  They were aware of these financial issues, but refused to step away from the food trough.  In my opinion, their willful blindness has sealed their fate.

It’s something called common sense.

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About greatergoodfundraising

Richard Freedlund has been active in the nonprofit sector in a number of ways, both professionally and as a volunteer. He is the founder of Greater Good Fundraising, a business that helps schools and organizations raise money for their programs while accomplishing something positive for the community. After living in Oregon for 27 years, he has returned to his hometown of Rockford, Illinois and hopes to make his mark on the nonprofit sector there. He is the father of a talented jazz musician and the son of philanthropic parents that continue to support multiple causes. To contact Richard for consulting, fundraising, or speaking opportunities, email greatergoodfundraising@gmail.com or reach him on Twitter.com @ggfundraise
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2 Responses to Greece, Illinois, and Lack of Common Sense

  1. Richard, hope all is well. Just wanted to say, though, that it’s somewhat simplistic to suggest that Greece is in this mess because it spent what it did not have. Absolutely true that the Greeks are responsible for having fudged their numbers to get into the Euro. Italy did the same as well as a few others. Goldman Sachs got a very huge pay off to the tune of $400 million per year by “helping” them at the outset. When Greece realized they were in trouble, they asked Goldman to help them figure out a new plan, which cost them dearly because they did not have a deep economic understanding of the complicated vehicles. Too little too late.

    The issue came when the crisis hit in 2008 with the financial market implosion. The creditors then called for their money in full. Greece got shut out of the markets and then a whole saga began. To make the creditors whole, these bailouts began. Over 90% of the money went to creditors – not Greece. Bailout after bailout the vast majority of the money has gone to the creditors. It has not gone into the Greek economy.

    In the meantime, the Greek economy has endured a depression so long and severe that it makes ours look like a piece of cake. Italy has been able to hobble along (but there’s an economic bomb ticking there too) because it has a very strong manufacturing sector. They make great things. The Greeks only really have olive oil and tourism.

    As an American living abroad in Europe, I’ve seen nuances to this story that go back to World War II and even World War I. We don’t have that experience in the States, but those war wounds are still very much of the undercurrent in Europe. There’s a lot more to this story than the Greeks simply spending money they don’t have. Yes, the Greeks must reform. Yes, they need to open up their “closed” professions and a host of other things. Yes, they are responsible, but so is Brussels, the EU and Germany.

    Ultimately, the Greeks will likely leave the Euro. They should. But, this issue of the Euro does not begin and end with Greece and perceived reckless spending. This is much, much deeper than that. Italy and Spain are also a tinder box. Economics, bad planning of the EU and Euro, nationalism and national sovereignty, politics, etc. are at the core of the mess.

    • Linda,

      Thank you for your comments and insights. They are truly appreciated.

      You have an advantage of living closer to the situation that I don’t, so you make excellent points.

      What I was trying to get at is that, when a government is in financial trouble for whatever reason, is it responsible for any organization to continue to seek their money from that government and make it the main part of their annual budget? Since the budget impasse here in Illinois started, I have read many comments from nonprofits that base much of their budget on contracts and grants that the state cannot pay. I have pointed out that nowhere in the definition of philanthropy does it mention government support. I have seen many times where over dependence on government funding has closed the doors of nonprofits and their programs when the state no longer has the funds to pay for them. While some support from government entities can be beneficial, an organization should not place all their eggs in one basket. Unfortunately, that attitude has caused a great deal of ire toward me and has, in some circumstances, kept me from being hired for some development positions.

      Thank you again for your valuable input. I always like to read your thoughts on my posts.

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