Scarcity Mindsets are Expensive

Minnesota is home to over 37,000 nonprofits who work tirelessly on behalf of Minnesotans and beyond. Yet in my 30 years' experience working in and with nonprofits and boards, I've observed a few key challenges which seem to have staying power across the sector. I was curious to learn if seasoned nonprofit executives and board members would identify the same pervasive challenges I did. My mother always said, "If you want to understand something, you have to ask." So...I did.

Scarcity is the first of the insights resulting from my confidential interviews with 20 nonprofit professionals and board members. What I heard aligns with my observations over 30 years. While not research based, the insights are noteworthy and shed light on Three Pervasive Nonprofit Mindsets that have plagued the sector for decades.

“Trying to do too much with too little (time & resources) leads to burnout and drives away volunteers, donors, and people who may otherwise love to engage.”

— Nonprofit Executive Director

Where you find an organization hesitant to invest, you'll often find a culture of scarcity or deficit. Much like having a stop sign on your forehead, a scarcity mindset gives off a message that says, "don't invest here, we are not worth it." Scarcity mindsets also pummel creativity, buy-in and passion--all essential for addressing the multi-faceted challenges of the 21st Century. If you hear phrases like, "We can't afford that, we don't have the money, we've tried that before, we never have enough time....", you are hearing scarcity.

“As a board member I can see the significant role scarcity mindset has been playing in our organization. When the initial budget process begins all departments are asked to submit their budget. The first thing the ED does is whack them. It is very demoralizing and offers no opportunity for engagement, problem solving or creativity.” — Board Chair

When interviewees were asked what the top two threats were to the nonprofit sector, scarcity mindset was at the top of the list.

I heard things like, “Scarcity prevents you from reaching out and doing what you should. When scarcity is present, I hear my staff say things like, “As nonprofits, we are not supposed to have anything nice.” – it plays a huge role in what we can accomplish.”

I asked only one question around scarcity, but interviewees brought up scarcity throughout the entire interview process—identifying that scarcity touches nearly every aspect of an organization and confirming that problems associated with scarcity thinking extend far beyond money. Nonprofit professionals and board member's interviewed provide examples of other ways scarcity mindsets interfere with organizational health:

Employee engagement

·       “We focus on these aspirational visions but then are told, “We don't have the

money to get there. It creates a downward spiral thinking loop.”

Innovation and creativity

·       “There is a constant feeling of having to “prove ourselves. Like we never

achieve enough, and the problems keep coming.”

Efficiency and partnerships

·       Scarcity thinking is a large barrier to collaboration

Reputation and Culture

·       A, "We don't have enough"" mindset is very present in our lives, individuals,

teams, organizations, board members and among staff.