Return to the business of shaping our future

“During these troubled times, what lies in store for the non profit sector…” begins an article by Dr. Paul C. Light , NYU Wagner’s Paulette Goddard Professor of Public Service and founding principal investigator of the Organizational Performance Initiative.   Dr. Light spoke on this topic recently as part of the Continuing the Dialogue(tm) series of the Nonprofit Services Center (NSC).  Over 60 non profit leaders, from both the agency and funder side, were enlightened, educated and entertained by his presentation.  With anecdotes we can all relate to, Dr. Light shared his perception of four different futures; (1) the miraculous rescue or a “Wall Street-esque”  bail-out for the non profit sector, (2)  general withering or the quiet dissemination of smaller NFP’s, (3)  arbitrary winnowing, eliminating the “middles class” of non profits or (4) rejuvenation.  Practical advice on how to proactively pursue option four, rejuvenation, followed including the need to focus on your own organization’s theory of change and transparency.  But, most importantly Dr. Light stressed the importance of  shaping our own future and quoted economist Paul Romer by reminding us that, “a crisis is a terrible thing to waste.”

Dr. Light encouraged nonprofits to not “hunker down” and ride out this economic downturn, but use it to our advantage.  It is Dr. Light’s recommendation that now is the time to invest in three key areas: human investment, innovation (where appropriate) and capacity building.   It is his opinion that these investments will help nonprofits survive; and it is those nonprofits that will help shape the future.

I was humbled to be one of three panelists who spoke following Dr. Light’s presentation.  Joining me were Judy Berkowitz, Executive Director of Kids in the Middle and Bridget Flood, Executive Director of Incarnate Word Foundation.  As panelist, we were each charged with the daunting task of following Dr. Light but also sharing our own perspectives on what we are doing now organizationally to prepare for life after the recession.  I cannot do justice to all of the information shared but in summary, we had perspectives on outsourcing for strength, collaborating across what may have previously been viewed as competitive lines and advocacy ~ becoming that voice for the change needed for a stronger, more cohesive sector.

I applaud those who took the time even within these troubled times to attend; investing in ourselves and organizations is one of the pieces of practical advice shared for rejuvenation.  And I applaud Nonprofit Services Center and Gateway Center for Giving for making it possible for us to learn from such inspiring national thought leaders.   Thank you to Wells Fargo Advisers for underwriting such an important discussion.

To quote Dr. Light, “I am not for profit and proud of it!”

post by

Kimberly McKinney

Kimberly McKinney, CEO
Humanity Saint Louis

Ms. McKinney serves on the board of NSC.

Downturn by boywonderky_2 on flickr.com

Sluggish Economy.  Economic Downturn.  Harsh Economic Times.  Weak Economic Climate.  Uncertain Economy.  Any way you say it – it ain’t pretty!

Let’s go back in time a little further and its easy to see how the climate can change so quickly – and the importance of being prepared when it does…

NSC recently released a study completed through IFF, Missouri Nonprofits: Building Capacity in the 21st Century, that suggests Missouri nonprofits are adept at managing the constant challenges posed by uncertain and restricted income but are challenged to grow their programs without additional resources.  The same respondents said at the time of the survey that they perceived their organizations to be financially healthy.  Of course, this benchmark study was conducted in 2007 covering the years 2004 – 2006, prior to the current economic downturn.

So what now? Kim Klein in her book Fundraising in Times of Crisis suggests that although the news on the economic climate is not good she believes that it is possible to continue to raise money during these times.  To do so, she states “your fundraising must be built around two concepts – diversity and flexibility.  Beyond those you will need to pay more attention to your donors and develop a highly functioning fundraising team. One bright spot on the horizon? You will have an opportunity to hear from Kim Klein on November 11 either as a Nonprofit Board President at the Nonprofit President Breakfast Speaker Series or in an interactive workshop for nonprofit staff in the afternoon.

And, where it is usually comforting to hear that “you are not alone” this is one time where comfort is no where to be found because times are no different for corporate funders. In a June 30, 2008 blog post, Navigating An Economic Downturn, on the Cone, Inc. blogsite lists suggestions that came from a convening by the Northern California Grantmakers Association. They recently held a conference devoted to helping companies responsibly navigate their giving strategies during an economic downturn. Where the companies at the conference did not see a decrease in their giving at the time they did know it is coming soon.

Add to that, in a September 23, 2008 blog post by Rick Cohen in Nonprofit Quarterly, What the Financial Sector Meltdown Really Means for Nonprofits and Philanthropy, Cohen states “nonprofits should not look to philanthropy from commercial banks and investment firms to soften the blow of the ailing economy and the inevitable impact on the nonprofit sector.”   

Your turn – Are you surviving the economic downturn? Where are you and your organization in this maze of financial dire-straights? Are you seeing more individuals/families accessing your programs? Are you keeping up with the demands of your budget vs. increased demands on your services? Where have you been going for help/ assistance/ information?   Here is your opportunity to sound off and express your concerns about our economic future. 

Photo: Downturn by boywonderky_2 on flickr.com

Photo provided by Sarah Solie through Flickr

A Sacramento Bee article on June 24, Pressed by legislator, nonprofit foundations agree to invest in minority-led organizations, stated that Assemblyman Joe Coto’s (D-San Jose) proposed legislation AB 624 has led ten major California foundations to agree to commit to increased grantmaking and investment in minority communities. As a result to this agreement, Coto has dropped his legislation which would have required foundations with more than $250 million in assets to publicly disclose the number of grants and dollars awarded to minority organizations and the ethnic, racial, and gender composition of their boards and staffs. This issue came about from the Greenlining Institute’s 2006 research that found “only 3.6 percent of grant dollars from the nation’s top 24 private foundations went to minority-led organizations.”

Does this government involvement help or hurt the nonprofit sector in California?  Some readers of the article have commented that this is “another example of extortion,” and that the “government is getting out of hand.”  However, others have expressed that this “public benefit tax-exempt status can build capacity for [their] community based organizations that mirror California.”

In reaction to a post by Rick Cohen in The Cohen Report, Negotiating Diversity in Foundation-land and What it Means for the Rest of Us readers have commented that it is “pretty sad that it took a scare like that to actually force these foundations [to work on] diversity and inclusion.”   

Will this cause foundations to look within and change the ethnic composition of their staff and board?  Will it cause added racial tensions or start tensions in an area where there weren’t any to begin with? 

Could this be the beginning of a “trend” in legislation in other states? If its any indication there was a comment by the Florida Minority Community Reinvestment Coalition to their listserv on the topic of AB 624 stating, “Question To Florida Legislature: What about Florida Minority Organizations?” 

So, what do you think?  So many questions.  I’m sure that they will continue to be asked as the conversation continues.