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Fall 2003 |
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Minnesota's nonprofit sector is facing a combination of pressures and challenges unlike any in recent memory, not the least of which are declines in funding from all sources: government, foundations, corporations and individuals. In this difficult fiscal environment, what can nonprofits and grantmakers do to effectively ensure that Minnesota continues to maintain and strengthen the health and vitality of its citizens and communities? "Giving Forum" posed this question to representatives from six nonprofit and philanthropic organizations in the state. Their responses appear below, and serve as a prelude to this fall's joint annual conference of the Minnesota Council on Foundations and Minnesota Council of Nonprofits, with the theme "What's Next for the State We're In?"
I am so glad the question is focused on the responsibility nonprofit and philanthropic organizations have to effectively support and ensure vital and healthy communities. I have sometimes gotten the impression that the survival of some organizations often becomes more important than the purpose for which they were created. This is an excellent opportunity for nonprofit and philanthropic organizations to reconnect with our mission. Adherence to mission has never been more important than it is today. It is precisely in these times of changing resources and public priorities when the organizational leadership must revisit its history, understand why the organization was founded, trace the development of each and every program and service it delivers, and make informed decisions as to which programs or services are its strengths and which are best delivered by other organizations. Having confidence in what you do well makes it easier to negotiate collaborations or alliances with other organizations exhibiting different strengths. Share your organizational strengths with other organizations doing similar but complementary work. Equally important, don't be afraid of recognizing and acknowledging your own weaknesses. Confidence in, and commitment to, your mission also helps to prevent the temptation to "follow the money." Many nonprofit organizations fail because the motive to offer programs and services is not to support their mission, but because the money's there. Unfortunately, as many of us are discovering, whether it is government budget cuts or poor stock performance, the money can disappear quite quickly. I believe exciting ideas will emerge during this current state of affairs. One example is that nonprofits with similar missions and programs are merging because they feel they can deliver a better product despite fewer resources. Another positive outcome might be that people think longer and harder before proposing the development of yet another nonprofit. It also is evident that people are recognizing that being a nonprofit does not mean you can't earn money. The services, programs, materials and skills staff deliver all have a value. Organizations that include more earned-income activities in their financial development plan are in much better shape today because they have less dependence on funders. However, in acknowledging the responsibility nonprofit and philanthropic organizations have toward ensuring vital and healthy communities, the important role of government in this responsibility cannot be forgotten. While many nonprofit and philanthropic organizations shy away from advocacy, I believe this current state of affairs will also serve to illustrate why it is important to look for policy solutions to systemic problems. We're running out of Band-Aids(r).
It's important to look at the collective nonprofit/philanthropic mission holistically. It may be in everyone's best interests - nonprofit organizations, the people we serve, philanthropy and government - to think about nonprofits not as a sector, but rather as how we all fit into the greater community, the nation and the world. A healthy community is like a well-oiled machine. To be truly healthy, many pieces - economics, education, physical and mental health, etc. - must come together effectively and efficiently. Reductions in tax-based funds on the federal, state and local levels pose a threat to healthy communities. But since nonprofits exist to create healthy communities and many for-profits depend on healthy communities for their financial success, a smaller government treasury is a problem in all sectors, not just for nonprofits. While we in the independent sector clearly have particular issues as not-for-profit organizations, we need to work ever more closely across sectors as entities with certain common goals. While the broader public tends to view nonprofits and philanthropic organizations in one big (or maybe small) grouping of "charities," there is often a big disconnect between nonprofits and philanthropic organizations because of misunderstandings of the roles and objectives of each. There are so many lexicons that we speak which are frequently misunderstood. Ask just about any philanthropic program officer how many requests they get for funding outside of their priorities. The number will probably blow your mind. It would be equally staggering to ask just about any nonprofit executive or development officer how many totally off-the-wall questions they get from philanthropic program officers. If we want to find ways for nonprofits and philanthropic organizations to work together more effectively, we will need to articulate our respective purposes more clearly, and commit ourselves to more forthright dialogue. During the 2003 legislative session, I heard a recurring message from legislators: there is only so much that we can do at the legislature; nonprofits need to get out to educate the public about community needs and how we're addressing them. While every organization works hard on communicating with the public, I agree that, overall, public awareness and understanding of what we do needs to increase substantially. The recent partnerships between the Minnesota Council of Nonprofits and The Minneapolis Foundation to inform legislators and the general public have moved us giant steps forward in this regard, but educating the public is a huge - and costly - task. We could use some more in-kind partners with expertise in public relations and communications. We might also need to craft some different messages about community issues and needs. There are too many elected officials who try to reduce the world to "haves" and "have-nots," and who contend that the "have-nots" got that way by their own accord. We know that the human condition is much more complex, and we need to find ways to get that message across to the public and legislators. Other changes need to be made in how we all approach money. Over the past couple of years, many people have said that the days of getting money just by asking for it are over. They're probably right, but it is hard for most of us to imagine other paradigms for bringing in money. It may even be time for more nonprofits to generate - and, yes, pay taxes on - income that is not mission-related, as long as we don't jeopardize our missions in the process. But while entrepreneurship is increasingly understood, accepted and implemented among nonprofits, there are huge challenges associated with changing our revenue streams from contributions to earnings, and we will need more good solid ideas, strategies and capital to spur revenue diversification.
A strong partnership and dialogue between nonprofits and philanthropy will be essential to meet the challenges of dwindling resources from the public and private sectors. In the times of plenty, funding decisions could be made by the numbers (i.e. who can serve more clients), or through special initiatives developed by philanthropy to target resources to specific areas such as youth programs. With more competition for less available resources, philanthropy and nonprofits need to work together to make sure that the basic safety net for society's most vulnerable is able to stay intact. Philanthropy will be challenged to not just accept proposals and make grants, but to develop a meaningful understanding of the challenges that nonprofit advocates and service providers, and communities that they serve, are facing day-to-day. From a nonprofit perspective, capacity, collaboration and wages will suffer. Many are struggling with basic operations and service delivery. Administrative capacity and program development will face cuts in order to preserve services. When these cuts are no longer adequate, already low wages will start to decline. The focus on collaborative partnerships will also suffer, because the reality for the nonprofit community is that collaborative efforts are staff-intensive for a generally smaller amount of funding. Many collaboratives will be nearly unsustainable during these tough times, when hard decisions need to be made about preserving the funding that supports direct services and basic operating support that keeps agencies open. Collaboratives do have a useful role in helping philanthropy identify priority needs for communities and for having agencies with a common purpose plan and operate in concert with one another. In order for these efforts to be sustained, they need to be made more attractive financially for partner agencies to be able to participate. Philanthropy would benefit from a census that can identify the menu of services available in each community and identify gaps in service or services at risk. Grantmaking and other support can then be targeted to help alleviate the worst symptoms of poverty for the families. Strategies can be developed which allow nonprofits to weather the current economic storm to help them have sustainable agencies, and not chase the dollars by constantly developing new programs. If a program works, fund it at an adequate level to keep qualified staff and pay for the true costs of the program. It is also important to look at new and innovative ways of providing services. The nonprofit sector is a viable alternative to many services currently provided by the public sector. There are many barriers that would need to be addressed, and we need to be open to trying things that can be done in new ways. Given economic hardships, all alternatives should be looked at with an eye to providing the best services in a competitive environment. The nonprofit/philanthropy sector will be challenged in the next five years in ways that it has never been challenged before. If the sector assures stakeholder input and keeps the needs of the community foremost, hopefully good decisions will be made that assure the basic standards of living that we have come to expect in Minnesota.
"Be the change you want to see in the world." M. Gandhi. In the midst of significant challenges, it's easy to think about what others should do. It's more difficult to take a hard look at changes we can make as individuals or in our own organizations. Today's challenges are certainly disorienting, confusing and frustrating. In many of my conversations with people I hear about strategies and actions that they think others should take. While it may be true that there are important actions others should take, I want to encourage everyone to first focus on the steps each of us, and the organizations we work with, can take to address the current challenges. Questions we should ask ourselves: Are we listening as much as we could? Are we asking nonprofit organizations to share how the state's budget-balancing choices are impacting not just the organization, but their clients and program participants? What are we learning about effective ways that individuals, families and organizations are dealing with these challenges? Are we sharing what we learn within our organizations and colleagues on a regular basis? Are we sharing what we are learning with our own friends, family and neighbors? By understanding the challenges in clear and concrete ways, by looking for leadership and creative problem-solving where we least expect it, solutions will be revealed. Wells Fargo has 16,600 team members in the state of Minnesota alone. Thousands are already engaged and involved in their neighborhoods and communities, but harnessing team member skills and expertise to address these new challenges is a strategy we can focus on. What if every Minnesota company encouraged team members to contribute their unique expertise to address community challenges and help maintain community vitality? The results would be powerful. Wells Fargo has consistently contributed 2 percent of its Minnesota pre-tax profits to charity since the founding of the Minnesota Keystone Program at the Greater Minneapolis Chamber in 1976. Wells Fargo's challenge is to maintain that commitment. But what if more Minnesota businesses that benefit from the vitality of this community, but do not currently give back to the community, started to do so at whatever level they were able? I know that customers and employees prefer to live and work in a prosperous, vibrant community. And they prefer to do business with, and work for, a company that gives back to the community. Even if individuals and businesses contribute more time, talent and financial resources to the community, we do not have the luxury to continue business as usual. Organizations are going to have to serve more people with less money. It will take everyone's creative efforts to maintain healthy, strong and vibrant communities. Being a better listener, sharing what I learn, suggesting meaningful solutions and asking others to be involved, are a few of the things I can do. I hope that each of us reassesses how we can leverage our own time, talent and resources to work together to creatively address today's challenges, in the hope that every one of Minnesota's citizens thrives.
There is no question that the downturn in the economy has had an impact on both the nonprofit and private sectors. The Southwest Minnesota Foundation has found it necessary to get creative in the way it conducts its grantmaking, loan programs and development services. We are continually looking for ways that we can accomplish our mission and benefit the people and communities of southwest Minnesota without having to spend a tremendous amount of money. Internally, we have had to tighten our belt. One example is the phone cards that our field staff now use to make long-distance phone calls. We also had to limit pay increases for staff this year and investments in new equipment, technology and office supplies are carefully evaluated and, where possible, postponed. In the area of grantmaking, we have adopted a highly strategic and proactive approach. We have identified specific priority areas and have proactively invested in programs to positively impact our region. One example is our Nonprofit Management Institute and Technical Assistance Fund. We are now entering our fourth year of offering the training, which assists nonprofit leaders in building stronger and more sustainable organizations. Since many nonprofits have lost funding this year and small, grassroots organizations seem to be the hardest hit, we chose to offer the Institute for the first time to organizations with no more than one paid staff and operating budgets from $25,000 to $150,000. Obviously, it is impossible for the SWMF to provide replacement funds to organizations who have lost their funding or been severely impacted by the economy, but by offering the Institute we can help sustain these worthwhile organizations through education and skill development. Another example is our grantmaking in the area of inclusive communities. In 2001, the SWMF funded a research study to identify what factors lead to community attachment. One of the key factors identified in that study was schools and teachers. Rather than taking a more reactive approach and waiting for grant proposals to arrive that will help us meet our goal of creating more inclusive communities, the SWMF is releasing an RFP that will seek projects that specifically respond to the findings of the school attachment research study. Other examples of proactive grantmaking can be seen through our work with intergenerational programming and parish nursing. In both cases, consultants have been retained to work with communities and groups of people to create innovative, outcome-based and sustainable projects. In the area of fund development, the SWMF has felt the impact of the economy as well. Thankfully, people still seem to be giving, but the most noticeable change has been the decrease in city and county contributions. The four principles outlined in the SWMF's mission statement have been key in helping us get through a time like this - collaboration, innovation, leadership and philanthropy.
Nonprofit leaders must stop thinking about the glass being half empty. Rather than seeking to continually fill that leaking glass, our new philosophy has to be to get another glass! This is the worst of times in recent capitalist history and nonprofits have been dramatically affected in the fall-out. Our leaders are pressured by the growing problems of our constituencies, while the resources for response are diminishing. As we are pushed by the tides of despair and pulled by the winds of extinction, we have got to see a different future if we are to lead during these challenging times. Yet nonprofit leaders continue to believe in the good of humankind while we seek new rays of hope. What has kept me going lately has been the tenacity of our staff, volunteers and clients, their sheer personal drive to do more than just survive, but to thrive. To keep their dreams alive, they develop new relationships, skills and tools and keep finding new ways to respond. I admire them. Our foremothers gave us an entrepreneurial spirit and the women that we serve have kept that spirit alive. That entrepreneurial sprit gives us the ability to make something happen, whether it is reinventing ourselves, creating a business, or making a profitable professional venture. We help them build capacity and teach women ways to apply their resources strategically for their future economic success and prosperity. Nonprofits provide valuable services that increase the capacity of our entire citizenry, contribute to the common good, and expand the prosperity of our communities. We operate small nonprofit businesses that provide services and products that satisfy the needs of our customers and contribute value to the social and economic vitality of our communities. Like all business leaders, we must enhance our ability to help our agencies overcome the current challenging barriers of doubt and despair and keep our eyes focused on the future possibilities and rewards. In increasingly competitive markets, our for-profit business colleagues continually tell us to know our organizational strengths, improve our operational excellence, and ensure that our services and products are the best in the market. Our leadership must learn to excel in this new market-driven economy without losing our compassion and our mission over the margin's bottom line. To help expand the possibilities for creating more nonprofit enterprise, for-profit and philanthropic leaders must help nonprofits understand the lessons of business creation, growth and survival. The for-profit sector has learned the lessons of providing a service that meets the needs of its customers and provides value to ensure its economic success and prosperity. It's time that the nonprofit sector does the same. The philanthropic community can help us by facilitating the learning process for this new nonprofit entrepreneurial leader model. They have the resources and relationships to create innovative opportunities to bring our leadership together for meaningful exchange and expansion of entrepreneurial knowledge. Through this entrepreneurial process we will find the other glass! Our organizations and communities will be better for it. |
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