Scarcity and What We Can Do About It (Part 1)

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Migrant Mother, Dorothea Lange, 1936

We talk a lot about the scarcity mindset in nonprofits. It is that belief that nonprofits let limitations define them. They don’t have money, time, energy, knowledge, you name it. It is a wonder that they get anything done. We try to administer the antidote to the scarcity mindset: a mindset centered on abundance and gratitude. We offer webinars, workshops, keynote speeches, and blog posts on ways to defeat the scarcity scourge.

But we don’t systematically bring research about scarcity into our work making nonprofits strong. We don’t draw on behavioral economics and psychology in constructing programs designed to change the ecosystem in which they work. We celebrate nonprofits for their vital role in community and society, but we leave the science of scarcity to global NGOs and domestic poverty fighters. We don’t connect what we know about poor individuals and their behavior to poor organizations and the decisions they make.

Imagine if we did. What if we took what the best minds teach us about human behavior and applied it to the people doing really important work. What if we took the practices that nonprofits are using with the poor and used them on the nonprofits themselves.

From Scarcity Mindset to Scarcity Trap

As much as people talk about nonprofits having a scarcity mindset, in reality most of them exist within a scarcity trap. A scarcity mindset is a way of thinking. But when thoughts lead to actions repeated over and over—and many minds repeat similar actions across a community—a scarcity trap takes shape. A self-defeating behavior increasingly narrows options to break free. The word “trap” conjures up the image of a mechanism that snaps shut and holds its victim fest. Sure—you can change your way of thinking and break free. But it is hard when outside forces keep you in place.

When you’re really desperate for something, you can focus on it so obsessively there’s no room for anything else. The time-starved spend much of their mental energy juggling time. People with little money worry constantly about making ends meet.

Scarcity takes a huge toll. It robs people of insight. And it helps to explain why, when we’re in a hole, we sometimes dig ourselves even deeper.

Hidden Brain’s Shankar Vendantam introducing
The Scarcity Trap: Why We Keep Digging When We’re Stuck In A Hole

by Sendhil Mullainathan and Eldar Shafir

The scarcity being discussed here involves poor people. But they might as well be describing the people I work with—the leaders and volunteers of small nonprofits, desperate for funding, starved of time, and worried about making ends meet. Their success is limited—or at least they perceive it to be limited—by the resources they have around them.

3 Characteristics of Scarcity Traps

Mullainathan and Shafir describe three characteristics of scarcity traps:

  1. Tunneling: Individuals have limited focus on the current challenge or problem. They show an inability to see broadly and into the distance. They see what is right in front of them.
  2. Slack: Individuals have little to no margin for change or recovery. They lack time to accommodate shifts in schedules or new opportunities.
  3. Bandwidth: Individuals can only handle so much brain effort. They experience a reduced ability to process information.

These sound so familiar to those of us working with small nonprofits. Ask almost any small nonprofit what they need, and they will answer money. If you want them to attend a training on pretty much anything, you say it is about raising money. The day-to-day reality of raising money and running programs with a minimal or all volunteer staff makes planning, reflection, and investment in systems a luxury. They have little margin around the edges to try something new, make mistakes, or take time to learn.

Just as society tends to blame poor people for their plight, we get frustrated that nonprofits underperform. We give them poor grades for board performance. I’m still cranky about the oft repeated “Nothing against nonprofits, but” refrain heard at a recent philanthropy conference. What if we reframed the question from “what is wrong with them” to “what can we do differently.” By “we” I mean all of us focused on nonprofit success: capacity building organizations and consultants, government agencies, philanthropy and communities.

A few questions to consider:

  • What about the situation in which they work contributes to their underperformance?
  • How will we change our behavior to reduce their perception of scarcity?
  • How can we design programs that respond to tunneling, that put information right in front of them when they need it?
  • How can we design programs that recognize the real limits on their time?
  • How can we reduce the bandwidth taken up by tasks outside of their core interest?

 

I have some ideas and would love to hear yours. I’ll write more on this next week.

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Time Bank – Nonprofit Style

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“But after a few weeks he noticed that he was spending an incredible amount [of time]. I’ll economise, he thought. He got up earlier, washed less thoroughly, drank his tea standing up, ran all the way to the office, and arrived far too early. Everywhere he saved a little bit of time. But on Sunday there was nothing left of all that he’d saved….

It occurred to him that there must be some government bureau, some kind of time bank where he could change at least part of his paltry seconds. After all they were genuine. He’d never heard of such an establishment but there would certainly be something of the kind in the directory under “T” or perhaps it was also called “Bank for Time”; he could easily look under “B”. Maybe he could also consider the letter “I” for he assumed it was an imperial institution; that would accord with its importance.”

 The Notebooks of Malte Laurids Brigge, Rainier Maria Rilke

timebankImagine a time bank, an institution into which you can deposit little bits of time saved now to withdraw later when you need time. It’s the kind of bank that converts a whole lot of seconds into minutes, into hours, into days, into productive lumps of time that are “genuine.”

This is the kind of institution imagined by Nikolaj Kusmitch, the “he” in the story above. Kusmitch is a Russian bureaucrat for whom time is very precious. He hoards time, saves time, and otherwise manages time in order to be able to live longer. But no matter how hard he tries, his Sunday accounting leaves him short.

The “he” could just as well be a nonprofit board trying desperately to save time around the edges and yet meeting after meeting, month after month falling short to do all of those other things that would extend their capacity to do the purposeful, community-growing work that so many want them to do.

This is where German literature and the education of nonprofit boards intersect. (No, I’m not talking about feeling trapped in a Kafkaesque bug’s body during an especially long board meeting.) Imagine if we gathered all of the seconds, minutes, and possibly hours that boards waste trying to figure out how minutes should be written, how to navigate roles and responsibilities in the absence of job descriptions, or where to find the standard operating policies that Google just doesn’t seem to have the algorithm for. We run factories, restaurants and schools through lean principles, why not boards?

The result could be revolutionary. Dividends of time would accumulate for matters of true governance. We could withdraw hours to have the kind of “sense-making” conversations that never find time in a normal board meeting. We could dive into the policy decisions that hold us back and make sure policymakers understand the experiences of the people we serve. Imagine the kind of thoughtful plans we would devise. Everything boards are told they should do, they could do.

And that time bank? If we were able to create such a thing, I would venture to say that it would be found under the letter “I” just as Nikolaj speculated. That would accord with its… Influence… to change the actions and habits of the good people volunteering their time to make something important happen.