Giving Compass' Take:

• Tammy Tibbetts, writing for Medium, discusses the recent decision for charity: water to start accepting Uber stock as a way to pay for employee bonuses.

• The author takes a deep dive as to why this is a strategic move to accept stock as a donation.   Since many donors refuse to fund overhead, how can nonprofit professionals and funders work together to fill these gaps and innovate the sector?

• Read more to understand the full costs of nonprofits. 

A recent headline in the New York Times asks a provocative question: “A Charity Accepts Uber Stock as Donations. Then Uses it to Pay Staff Bonuses. Is that O.K.?”

Elite entrepreneurs — largely from the “unicorn” companies valued at $1B or more — have pledged at least 1% of their equity to charity: water, a nonprofit bringing clean and safe drinking water people in low-income countries.

These donated shares have an unusual restriction: When these companies are sold or go public with an IPO, the entrepreneurs will pay out a portion of their stock to charity: water, 80% of which will fund salaries and office rent, and 20% will pay bonuses to charity: water staff.

One of the founding members called it “an exploration into the future of philanthropy.” Others see it as a controversy over whether the employees of a nonprofit should benefit.

The strategy is smart because nonprofit employees deserve to be paid well.

Our society is uncomfortable paying nonprofit staff, but we don’t blink an eye when professionals in the for-profit sector take home a pretty good paycheck. Brigette Bugay nailed this point in her Medium response to the Times article. Why shouldn’t high-performing nonprofit employees have good salaries, quality health insurance, paid parental leave, short and long-term disability coverage, a 401k match, and access to professional development? Everyone should — including those who work for a better world. And yet, so often funders say, “We don’t fund overhead.”

My bottom line is that when business leaders attempt to innovate within the philanthropy sector, they may inadvertently complicate efforts for gender equity, diversity, inclusion, and sustainability. So I invite them into a conversation with more of us. That goes further than a critique because ultimately, we’re all learning. The future of philanthropy is ours to explore together, alongside the communities we serve.

Read the full article about sustaining nonprofit professionals by Tammy Tibbetts at Medium.