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Can the Nonprofit Sector Stand Up for Itself?

By Nell Edgington



There is something really interesting going on in the world of nonprofit advocacy. And I don’t mean advocacy for a specific cause. Rather, I’m talking about advocating for the nonprofit sector as a whole. Three new efforts underway in recent months are vying to be the voice of the nonprofit sector. And the firestorm brewing is interesting to watch.

Robert Egger kicked it off a year ago when he formed CForward an advocacy organization that champions the economic role of the nonprofit sector and supports political candidates who include the nonprofit sector in their plans to rebuild the economy. You can read my interview with Robert about why he launched CForward here. Robert’s video about the need to advocate for the nonprofit sector is below (or here if you are reading this in an email):

And then in the last couple of months there have been two similar movements to better advocate for the nonprofit sector. Dan Pallotta released a new book last month called Charity Case: How the Nonprofit Community Can Stand Up for Itself and Change the World where he announces the creation of his new entity, the Charity Defense Council, which is also aimed at advocating for the nonprofit sector, via five efforts:

  1. An “anti-defamation league” to respond to and rectify inaccurate reports about the sector in the media
  2. Big public advertising campaigns for the sector
  3. A “legal defense fund” to challenge unproductive laws against the sector
  4. Work to create a “National Civil Rights Act for Charity and Social Enterprise” to support the sector
  5. Grassroots organizing of the sector as a whole, including a national database of every nonprofit in the country

And then the third grand effort to advocate for the nonprofit sector comes from Independent Sector, the organization formed in 1980 to “advance the common good by leading, strengthening, and mobilizing the nonprofit and philanthropic community.” Their new report “Beyond the Cause,” which interviewed 100 nonprofit organizations, recommends the creation of a national organization (probably run by Independent Sector) to push a nonprofit agenda, costing $20 million over 4 years. For Independent Sector the key issues that such an entity would address are:

  1. Changes that could limit the organizations eligible for charity status
  2. Threats to charitable tax deductions for donors
  3. A need to clarify advocacy and lobbying rules for charities and private foundations
  4. Changes to Internal Revenue Service disclosure forms that could hamper nonprofit operations
  5. Burdensome paperwork and red tape involving government contracts with nonprofits
  6. Lack of government-financed research on the nonprofit world

While CForward seems to be largely supported in their work, both Pallotta’s and Independent Sector’s efforts are drawing fire. Phil Buchanan, president of the Center for Effective Philanthropy, writes a scathing review of Pallotta’s new book and advocacy effort and concludes that “Mr. Pallotta is selling is himself—as both the nonprofit world’s messiah and its advertising agency,” and suggests that people support CForward and Independent Sector instead of Pallotta’s Charity Defense Council.

Similarly, Pablo Eisenberg, senior fellow at the Georgetown Public Policy Institute, dislikes Independent Sector’s effort to coalesce the nonprofit sector arguing that “nonprofits will never share a broad consensus about which issues are most important. The best that nonprofits can accomplish is to strengthen their individual advocacy and lobbying activities and join with other organizations in coalitions that fight for specific policy changes.”

It is really a fascinating and multi-layered debate. I strongly agree that the nonprofit sector is often dismissed in the policies of the day. But if organizations like Independent Sector have been working to create a common voice for the sector for more than 30 years with little improvement, I’m not sure what will change. Especially if 3 separate entities are all singing different verses of the same tune. They will be competing for dollars, mind-share, and the ears of policy makers. But I am a huge advocate for fixing a broken sector, so let’s see how this all plays out.

What do you think? How do we get policy makers to recognize the importance and value of the nonprofit sector?

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About the Author: Nell Edgington is President of Social Velocity (www.socialvelocity.net), a management consulting firm leading nonprofits to greater social impact and financial sustainability. Social Velocity helps nonprofits grow their programs, bring more money in the door, and use resources more effectively. For more information, check out Social Velocity consulting services and clients.


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7 Comments to Can the Nonprofit Sector Stand Up for Itself?

robert egger
October 11, 2012

This is a big discussion, and I’m glad you are shining a light on it Nell, as YOUR generation of nonprofit leaders needs to bust free of some of the older ideas, limited focus and negligible impact that historic nonprofit advocacy has generated.

One thing I’d point out…CForward isn’t trying to get big grants, make big donations to candidates or fight anybody’s battles. Like the work I pioneered at DCCK, I open doors and give people the tools they need to fight their own battles.

Case in point–CForward has identified candidates who come from the field. These are people who sweated payroll, fought for ideas and built organizations…and now they have stepped up to run for office. CForward is like KIVA. We identify the candidates, and then give 10 million nonprofit employees a way that can legally support people directly. These are candidates who, if elected, just might interject some FACT into policy debates. People who will point out how much investment dollars nonprofits bring into a community, and who will work to increase that amount by helping to coordinate grant requests or facilitate partnerships. Candidates who get the economic power of social enterprise or micro-credit, and who will forward policies to incentivize its growth, so that as much money as possible stays local. More importantly, candidates who understand that there is NO profit without nonprofits!!

Our goals are simple…start electing people at the local level. Then follow their work. Then help elect more people who will replicate their successes.

But we are just one (needed) rung of the ladder. We do need an office in DC…and every capitol city. Not to become another special interest group fighting to preserve a slice of the pie, but rather, one that promotes a bolder view of how communities thrive and the economy can grow.

People (or leaders) who think you have to play the game as it exists limit themselves to the rules that govern the game. CForward wants to change the rules of the game.

Nell Edgington
October 11, 2012

Thanks for further fleshing out CForward’s goals, Robert. I would love to understand how those fit in with Independent Sector’s and Dan Pallotta’s goals and whether the three efforts can/should connect in some way. Perhaps they will add their thoughts to this.

Kate Barr
October 11, 2012

Nell,
I’m glad that you put this question out in the blog. There have been numerous tweets about the articles, reports & books but 140 characters isn’t enough. I am not satisfied to assume that there are two choices, Dan Pallotta or Independent Sector. I agreed with both Phil Buchanan and Pablo Eisenberg’s critiques of the two “proposals”, especially the observation that both are top-down, “here is the solution”, style and ultimately self-serving. Robert Egger’s approach with CForward is much more aligned with the community led roots of the nonprofit sector. I have to question your statement, Nell, that we need to advocate for “fixing a broken sector”. Broken?

Nell Edgington
October 11, 2012

Kate, thanks for your comment, I agree this is a really important debate.

I do think that the nonprofit sector is broken in several ways, many of which are mentioned in (or inferred from) the goals of CForward, Independent Sector and Charity Defense Council. These include: stifling IRS regulations, misperceptions about overhead, burdensome reporting requirements. But I would also add things like: worn out financing techniques (fundraising that doesn’t work anymore), checked out boards of directors, and the list goes on. I say that the nonprofit sector is broken not to depress or disillusion people, but rather as a challenge that we can do better. As I say all the time, we must re-make, re-work, and re-envision this great sector that has been working on social change since long before it became cool.

Gary Snyder
October 11, 2012

The recommendation of the Independent Sector’s new $1 million report, quite simply, is an unashamed admission that IS has failed in its meeting the recommendations of its own $4 million Panel on the Nonprofit Sector Report and subsequent Principles for Good Governance and Ethical Practice.

Those “stifling IRS regulations” that you allude to were, in part, advocated by the Independent Sector Panel on the Nonprofit Sector in its March, 2005 Report to the Senate Finance Committee (page 47)

It is curious that Independent Sector wants to establish a new multi-million agency to address the very issues that it has championed yet failed to effectively address even after spending tens of millions of charitable dollars.

[...] 3 new organizations have formed trying to advocate for a stronger nonprofit sector. But will policy makers listen?  [...]

Dan Owens
October 16, 2012

I can’t say enough how important I think Robert’s points are. Everyone presumes that a Washington, DC voice is absolutely critical to the nonprofit sector, and while it is necessary, the real nonprofit regulatory action occurs at the state and local level. It is far more important to have vital state and local nonprofit associations than national ones. I would hope to have both, but if I had to choose, I want 50 on-the-ground strong and proud organizations. That’s how you get effective federal advocacy, anyway. Robert’s point is a valid one- we need a bolder way to think about and re-envision our economy away from a mindless profit-taking and rent-seeking excercise to a truly cooperative endeavor that places the appropriate value on all our contributions. And I certainly include social enterprise in that endeavor. But it all starts at the local and state level.

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