Since I was out of the office for a good chunk of July and August, I’ve decided to combine both months into one 10 Great Reads list. But let me be clear, there was still lots going on, I just happened to be (somewhat blissfully) missing it.
From philanthropy’s role in inequality, to climate change preparation, to what the Greek financial crisis teaches us about networks, to civic engagement, to digital’s effect on fundraising, to social impact bond results and pizza on the family farm, they were a great couple of months.
In my (limited) view, below are my 10 favorite reads from the past two months. But because I know I missed things, please add to the list in the comments.
- President of the Ford Foundation Darren Walker made a lot of news this summer, from his announcement of Ford’s shift to focusing on inequality and unrestricted grants, to his July release of a thought-provoking essay in which he took foundations to task. He argued that foundations have been “cutting the pie into smaller slices,” and he instead encouraged funders to embrace “a new era of capacity building investment.” Because, as he put it, “What civil society needs most, and now more than ever, are resilient, durable, fortified institutions that can take on inequality, fight poverty, advance justice and promote dignity and democracy.” Amen! Ford’s move kicked off an excellent Inequality and Philanthropy forum on the HistPhil blog. And Inside Philanthropy‘s David Callahan argued that Walker’s message is about significant change, which may be tough for the sector to hear.
- In a fascinating (and rather depressing) article, Eric Holthaus from Slate talks to climate scientists about how they are personally responding to the climate crisis, particularly how they have “factored in humanity’s lack of progress on climate change in [their] families’ future plans.” Yikes.
- Reserve funds are an incredibly critical (but often misunderstood) aspect of nonprofit financial strategy. But as she always does, Kate Barr from the Nonprofits Assistance Fund provides a clear roadmap to understanding.
- Paul Vandeventer uses the summer’s Greek Euro crisis to illustrate when networks (of which the Eurozone is an excellent example) thrive and when they fail. As he puts it, “Ignoring or giving short shrift to…the fundamental principles by which networks operate wastes precious reserves of time, money, and goodwill, and imperils all the hopeful good that organizations, institutions, and countries set out to achieve when they start down the path of networked action.”
- Late July saw a fascinating gathering of social changemakers around civic engagement, the “Breaking Through” conference, hosted by the Knight Foundation. Keynoter Peter Levine argued “This is the year that we can take back American politics. It’s up to us.” It was a great lineup of speakers and sessions about getting people engaged again. You can see video from the conference here.
- Is digital becoming a gamechanger in fundraising? Some think so. And in August Facebook launched a new Donate button, but is it really all that helpful to nonprofits? Some argue that Facebook is critical. Others think the Donate button is a fail.
- August of 2014 saw the record-breaking ALS Ice Bucket fundraising challenge. Many (including me) were skeptical of the campaign, but it turns out that last summer’s financial windfall helped scientists make a breakthrough in research to fight the disease.
- This August was the 10 year anniversary of hurricane Katrina. There were many great articles about where New Orleans has been and is now. But my two favorite were Greater New Orleans Foundation President Albert Ruesga’s Ten-Year Perspective on the philanthropic response, and Andrea Gabor’s New York Times article, The Myth of the New Orleans School Makeover.
- The first results came in from the New York state social impact bond experiment, and they weren’t great. Goldman Sachs invested in a Rikers Island program that attempted to reduce recidivism among teenagers.The program failed to meet its goals and Goldman lost money. But New York is not giving up, as first Deputy Mayor Tony Shorris said, “This social impact bond allowed the city to test a notion that did not prove successful within the climate we inherited on Rikers. We will continue to use innovative tools on Rikers and elsewhere.”
- I’m always a fan of examples of innovation. NPR provided a glimpse of how family farms are using pizza to reinvent their business model.
Photo Credit: Anne Adrian
In today’s Social Velocity interview I’m talking with Jay Geneske, Director of Digital at The Rockefeller Foundation.
Jay directs the Foundation’s digital strategy to engage internal and external audiences, champion organization-wide collaboration, deliver data that informs organization decisions, and pioneer new ways to hear and share innovative ideas. Jay previously served as the Director of Online Communications for Echoing Green, and has also served in digital and brand strategy roles at Carnegie Hall, Shedd Aquarium, and Steppenwolf Theatre.
You can read past Social Velocity interviews here.
Nell: Your role as head of digital for a major foundation is a pretty new kind of position in the world of philanthropy. Obviously the Rockefeller Foundation sees a lot of value (beyond marketing) in digital. How does digital play into the Foundation’s overall strategy?
Jay: Like every other sector, digital has changed the game for social impact. At the Rockefeller Foundation, I’ve been tasked to pioneer new ways to hear and share innovative ideas and perspectives on serving the needs of poor or vulnerable people in a time of rapid change.
That’s a tall order, but an exciting one.
This remit certainly includes how we utilize digital media to tell the story and impact of our work, to bring valuable information to those working in the sector, and to elevate our staff, grantees, and partners as thought leaders.
But digital goes far beyond traditional communication or marketing.
For external audiences, our digital focus is on influence. A carefully planned Twitter campaign can influence a policy maker to prioritize building resilience to the shocks and stresses facing their city. A data-informed segmented email can make a practitioner think more innovatively about solving a social or environmental problem. A well-crafted blog post syndicated on Medium, LinkedIn or elsewhere can connect our staff members to an important partner in the private sector.
Digital also plays an increasingly critical role for our internal audience. We’re reimagining how we work with each other and our hundreds of external partners by meeting people where they are and embracing nimble digital technology. For example, we’re bringing all of our files to the cloud for easy access around the globe and on mobile devices. We’ve also just launched an internal hub that brings valuable real-time data directly to staff members’ fingertips and also more easily captures and stores the critical informal knowledge and insights—typically stuck in email inboxes—that drive strategic decision-making.
What’s most important is the connective tissue between internal and external audiences, and confronting and embracing the increasing overlap and intersection to make us more effective.
Nell: The Rockefeller Foundation turned 100 in 2013 making it one of the oldest U.S. foundations. But the Foundation obviously works hard to stay relevant amid changing social challenges, technology, modes of communication, etc. What drives the Foundation’s desire and ability to be so nimble?
Jay: Our mission has always been to improve the well-being of humanity. To achieve that mission, we must work in a way that is suited to a rapidly changing world, especially where technology and greater interconnectedness have accelerated change and altered the way people live.
This reality manifests throughout our formal initiatives, such as Digital Jobs Africa, which is connecting Africa’s rapidly growing youth population with jobs in the ICT sector. Technology has also clearly changed the game for how and where we do our work. For example, I’ve awarded grants to networks with a robust online presence with the aim to surface new ideas and connect to new people who are solving big social issues.
But in many ways, the sector is just scratching the surface, particularly around data. As David Henderson from FII recently noted, for data to change the world, we must think beyond software and data visualizations. There is a serious lack of investment and focus on how to turn data into action.
Nell: A big initiative at the Rockefeller Foundation is the 100 Resilient Cities project that works to help cities adapt to the “new normal” of continuous disruption. How are you using digital in this particular project?
Jay: Digital plays a critical role in this initiative where our digital strategy is focused on influencing policy and business leaders and practitioners to focus on building resilience to physical, social, and economic challenges facing the world.
Through this work we’ve learned that content is the key to building influence. Our multichannel editorial strategy centers on creating and curating relevant, insightful, and vibrant content that our audience will find immediately actionable. It’s amazing to see how that content then travels around the social web, especially by politicians and business leaders.
We also know that reach is not the same as influence. Although growth is important, our focus has always been on influencing a specific audience, many of whom may not have huge a Twitter following.
Nell: In your work you talk about “digital storytelling” as a critical component of effective social impact, which goes far beyond a more traditional nonprofit approach to marketing. What does effective digital storytelling look like and what is the return on investment for a nonprofit?
Jay: While there have never been more ways to reach audiences, it has also never been more difficult to really reach them. I’ve also noticed a fast increase in big brands infusing questionable social change messaging and stories into their communications, and I worry that organizations driving real social impact will be left behind.
The Foundation has invested in storytelling –including launching the free tool Hatch for Good— to help organizations tell stories that are strategically planned, creatively crafted, and designed to achieve measurable outcomes.
In many ways, storytelling is an angle or a focus in social impact communications and marketing. It’s a way to stand out, to inspire action and donations, to drive policy change.
We’ve had tens of thousands of people use Hatch for Good in beta, and what’s become clear is that, for all the good they do, our mission statements are preventing us from telling effective stories. We try to insert them, sometimes word-for-word, into every story. And the result is a story so crowded that our audience never had a chance to take action.
Effective storytelling shows the human consequences of the problem our organizations address—and the solutions that give people hope. Stories about the people whose lives are directly affected by the work, and about the people who join forces with us to create change. These stories exemplify our mission statement, but are not bound by it.
When done strategically, these stories can prove a return on investment, case studies of which are posted on Hatch for Good.
Note: As you know, I am taking a few weeks away from the blog to relax and reconnect with the world outside of social change. I’ll be back later this week, but I have left you in the incredibly capable hands of a rockstar set of guest bloggers. The last, but certainly not least, is Antony Bugg-Levine. Antony is CEO of Nonprofit Finance Fund, a national nonprofit and financial intermediary that works with philanthropic, private sector and government partners to develop and implement innovative approaches to financing social change. Here is his guest post…
When we asked nonprofit leaders to identify top challenges as part of Nonprofit Finance Fund’s 2015 State of the Nonprofit Sector Survey, 32% said “achieving long-term sustainability,” by far the most popular response.
What does it take to reach the promised land of sustainability? It may seem counter-intuitive, but one of the best measures of organizational sustainability is not stability but adaptive capacity, the ability to act as circumstances require and opportunities allow. A truly sustainable enterprise must have the capacity to nimbly respond to external conditions. A strong balance sheet must allow for flexibility.
In the nonprofit sector, where pursuit of a mission is paramount, the ability to thoughtfully tack toward progress as funding conditions and community needs change is a hallmark of a success. That does not change the reality that our sector is notorious for restricted funding and hampered by a lack of available enterprise-level investment capital.
So, how do organizations build adaptive capacity?
Here are a few ways that nonprofits can build their adaptive “muscle” and be better prepared to change as the environment demands and opportunities allow.
Know your costs.
Nonprofits must understand the true costs of providing programs in order to make informed decisions about whether grants or contracts are able to cover those full costs, and how much subsidy might be required from other sources to fill the gap.
Many times, we see nonprofits use a grant amount as a starting point, and try to design a program that fits with the award amount. Heights and Hills, which provides services for older adults in Brooklyn and their families, asked us to help them take a different approach. Using customized tools, leadership now understands not only the current costs of running particular programs, but also how those costs change based on a variety of factors.
Like Heights and Hills, nonprofits need to be able to answer questions such as:
- “Which programs may be too costly if they are not fully supported by direct revenue?”
- “How do our costs change if we expand a program and need to hire additional staff?”
- “What if the amount of grant funding changes?”
- “Where might collaboration with another organization serve us well?”
Just say “no.”
The social sector attracts passionate activists who have a knack for seeing solutions where others see problems, and who are often driven by a deep inclination to say “yes” to those in need. But in order to build and preserve adaptive capacity and to truly remain mission focus, leaders must protect the nonprofit enterprise and its ability to continue its work. The common practice of accepting pennies on the dollar to deliver programs perpetuates unhealthy funding patterns and expectations. Armed with data about true costs makes it easier to say “no” to opportunities that ultimately detract from an organization’s ability to move the needle on mission.
New York’s Committee for Hispanic Children and Families did just that, and declined to pursue a large government contract because it sapped too many “indirect” resources. While at first glance, it seemed that the small allotment for “overhead” was enough, the amount didn’t nearly cover actual costs associated with the time that executive, finance and administrative staff were spending to keep the program afloat.
Saying “no” to a fiscally unhealthy grant preserves the organization’s ability to serve its clients well into the future. If we want to change embedded, unhealthy funding practices — and perhaps even elements of nonprofit culture that fuel these — we must be more willing to say “no.”
Ultimately, the benefit of adaptive capacity is the freedom to pursue what works. Some programs are more easily measured than others, but nonprofits and our funders need to invest in understanding impact. This is especially critical as we move toward an outcomes-based funding environment.
Scenarios USA, a nonprofit that uses storytelling for youth sex education, found a rare partner in the Ford Foundation when it decided to dramatically change its approach. Scenarios was open to asking, “Are our programs working?” and accepted that its core assumptions were inaccurate. With the Ford Foundation’s support, the organization revamped its program to focus on fostering critical thinking, which has tremendous influence on youth behavior.
Evaluating programs, experimenting with new ways of meeting mission and measuring outcomes over time are necessary to positive social change.
Seek support for major changes.
Money for programs is far more plentiful than money for enterprise-level change. Our survey found that nearly half of nonprofits report that they can have an open dialogue with funders about expanding programs, but just 6% feel comfortable conversing with funders about flexible capital for organizational growth or change.
There are exceptions. The California Community Foundation has partnered with Nonprofit Finance Fund and several others to offer strategy, management, and financial services aimed at strengthening the region’s nonprofits and building the durability of the sector. New York Community Trust has launched an initiative to help small arts organizations navigate various transformations and milestones such as leadership succession, business model changes, and facility renovations or moves. And New York’s Change Capital Fund is a collaboration of 17 foundations and financial institutions that is funding five New York community development organizations to help them refocus their strategies and develop new business models to address persistent poverty more effectively.
It is time to challenge the notion that funders aren’t willing to talk about money for adaptation and adaptive capacity, and to make the case for the right kinds of support.
It is hard to know what will be required of our sector in the years to come, but a steady trend of increased demand seems to indicate that the answer will be, “more.” Limited resources make doing more of the same nearly impossible. We must change the way we approach the challenges of our day, and organizations with adaptive capacity will lead the way.
June was an amazing month in the world of social change.
Most notably, the long fight for marriage equality was won with the Supreme Court’s ruling in Obergefell v. Hodges. It is moments like these where the long, arduous road towards social change makes sense. But that wasn’t all that was going on in the busy month of June. From “new” tech philanthropy, to the orthodoxies of philanthropy, to the oversight of philanthropy, it was all up for debate. Add to that some fascinating new ideas for museums, new data on how Millennials get their news, and a fabulous new blog about the history of philanthropy. It was a whirlwind.
And if you want to see past 10 Great Reads lists go here.
- The biggest news by far in June was the Supreme Court’s 5-4 ruling in Obergefell v. Hodges making gay marriage legal. In the ruling opinion Justice Kennedy writes: “As some of the petitioners in these cases demonstrate, marriage embodies a love that may endure even past death…Their hope is not to be condemned to live in loneliness, excluded from one of civilization’s oldest institutions. They ask for equal dignity in the eyes of the law. The Constitution grants them that right.” While this is a huge win for equality, I think the two really interesting parts of the story are 1) how relatively quickly gay marriage went from banned to law and 2) the various actors that made that social change happen. Some argue that Andrew Sullivan’s 1989 landmark essay in New Republic started the intellectual case for gay marriage. This New York Times interactive map shows how gay marriage went from banned to legalized state by state over time. And Evan Wolfson, founder of Freedom to Marry, describes the decades long struggle of nonprofit reformers and their donors, including the Haas Fund in San Francisco, to make marriage equality happen.
- A new blog, the HistPhil blog, launched in June to much acclaim. There is an enormous need for a historical perspective as we work to make nonprofits and the philanthropy that funds them more effective. HistPhil has already begun to provide that in spades with excellent posts on the Supreme Court ruling, among many other topics you will see below.
- Sean Parker, co-founder of Napster and founding president of Facebook, launched a new foundation and wrote a controversial piece in the Wall Street Journal about his “new” vision for philanthropy. Some found his ideas full of hubris, while others found him to be “an articulate evangelist for tech philanthropy.“
- And if that wasn’t enough philanthropic controversy for you, there were two other debates waging in June. First was the response to David Callahan’s New York Times piece, “Who Will Watch the Charities?” where he argued that we need greater oversight on nonprofits and their funders. Phil Buchanan of the Center for Effective Philanthropy quickly shot back that while Callahan raised some important questions, he ignored the complexity of the sector and reform efforts already under way. And then the two got into an interesting back and forth. Finally, Callahan wrote a follow up piece for Inside Philanthropy. Good stuff!
- Along the same lines, the other point of debate in June centered around a Stanford Social Innovation Review article where Gabriel Kasper & Jess Ausinheiler attempted to challenge the underlying assumptions in philanthropy. But now that we have a new expert on the history of philanthropy on the block, Benjamin Soskis from the HistPhil blog gave us a more accurate historical perspective about just what is and isn’t philanthropic orthodoxy.
- Michael O’Hare, professor of public policy at UC Berkeley, wrote a great long form piece in the Democracy Journal arguing that museums could become much more relevant and financially sustainable if, among other things, they began selling their stored artwork. Crazy controversial, but fascinating, ideas.
- Writing in the Stanford Social Innovation Review, Matthew Scharpnick cofounder of Elefint Designs, argued that recent ProPublica investigations of the American Red Cross uncovered our double standard for nonprofits. As he writes: “We are asking organizations to meet competing demands—many of which are at odds with how they are funded. We want nonprofits and NGOs to solve problems as effectively as private-sector organizations, and we want them to do it without any of the advantages and with far more constraints.”
- The Ford Foundation announced a sweeping overhaul in their grantmaking strategy. They will now focus solely on financial, gender, racial and other inequalities, and double their unrestricted giving. Larry Kramer, president of the Hewlett Foundation, described how he is closely watching this historic move. And Brad Smith, president of the Foundation Center, offered a view of how philanthropy has approached inequality.
- The Hewlett Foundation’s Kelly Born provided some interesting thoughts about what a new Pew Research Center report about how Millennials get their news means for civic engagement.
- And finally, on an inspirational note, Steven Pressfield articulated how “artists,” or really anyone hoping to bring something new into the world (a painting, a novel, a solution to a social challenge), should think: “As artists, [we believe]…that the universe has a gift that it is holding specifically for us (and specifically for us to pass on to others) and that, if we can learn to make ourselves available to it, it will deliver this gift into our hands.” Yes.
As I mentioned earlier, it is so important to take time away to rejuvenate and reconnect with your passions, family and friends. So I am taking my own advice and taking some time off later this summer to connect with the world outside of social change.
And so for the second summer in a row I’ve asked a group of social change thought leaders to write guest blog posts in my absence (you can read last summer’s guest blog posts here).
I am so excited about this year’s group of amazing social change thinkers. They are experts in social change finance, philanthropy, political reform, outcomes data, organizational effectiveness and much, much more. They are smart, thoughtful, engaged and visionary leaders. And they are all helping to move social change forward in big ways.
Below is the lineup of guest bloggers with background information on each of them. Their posts will begin in late July. Enjoy!
Antony is the CEO of Nonprofit Finance Fund (NFF), a national nonprofit and financial intermediary where he oversees more than $340 million of investment capital and works with philanthropic, private sector and government partners to develop and implement innovative approaches to financing social change. NFF also creates the annual State of the Sector Survey. Antony writes and speaks on the evolution of the social sector and the emergence of the global impact investing industry. Prior to leading NFF he was Managing Director at the Rockefeller Foundation. He is the founding board chair of the Global Impact Investing Network and convened the 2007 meeting that coined the phrase “impact investing.” You can read my past interview with Antony here.
UPDATE: Here is Antony’s guest post.
Kelly is a program officer at the Hewlett Foundation working on their Madison Initiative, which focuses on reducing today’s politically polarized environment. Before joining Hewlett, Kelly worked as a strategy consultant with the Monitor Institute, a nonprofit consulting firm, where she supported a range of foundations’ strategic planning efforts. In addition to her experience as a strategy consultant, Kelly has worked with various nonprofit and multilateral organizations including Ashoka in Peru, the World Bank’s microfinance group CGAP in Paris, Technoserve in East Africa, and both The Asia Foundation and Rubicon National Social Innovation in the Bay Area. Kelly guest lectures on impact investing at Stanford’s Graduate School of Business and often writes for the always thoughtful Hewlett Foundation blog.
UPDATE: Here is Kelly’s guest post.
Phil is President of the Center for Effective Philanthropy (CEP), a nonprofit that is the leading provider of data and insight on foundation effectiveness. CEP helps bring the voice of grantees and other stakeholders into the foundation boardroom and encourages foundations to set clear goals, and coherent strategies, be disciplined in implementation, and use relevant performance indicators. Phil writes and speaks extensively about nonprofits and philanthropy and rarely pulls punches when he does. He is a columnist for The Chronicle of Philanthropy and a frequent blogger for the excellent CEP Blog. He was named to the 2007, 2008 and 2014 “Power and Influence Top 50” list in The Nonprofit Times. You can read my past interview with Phil here.
UPDATE: Here is Phil’s guest post.
Kathy is Organizational Effectiveness and Philanthropy Director at the David and Lucile Packard Foundation where she helps grantees around the world improve their strategy, leadership, and impact. Her team makes grants on a broad range of organizational development issues, from business planning to social media strategy to network effectiveness. She also manages the Packard Foundation’s grantmaking to support the philanthropic sector. Prior to joining the Foundation, she worked in a non-profit, on Capitol Hill, and in state and local government in California. Kathy serves on the board of Grantmakers for Effective Organizations and on the advisory committee for the Center for Effective Philanthropy. You can read my past interview with her here.
UPDATE: Here is Kathy’s guest post.
I asked David to be a guest blogger again this summer because he is so insightful and often points out things that few others in the sector are willing to acknowledge. He is Director of Analytics for Family Independence Initiative, a national nonprofit which leverages the power of information to illuminate and accelerate the initiative low-income families take to improve their lives. David is also the former founder of Idealistics, a social sector consulting firm that helped organizations increase outcomes, demonstrate results, and organize information. He writes his own blog, Full Contact Philanthropy, which is amazing. You can read his past guest blog post here and my interview with him here.
UPDATE: Here is David’s guest post.
May was another busy month in the world of social change. For a start there was: a behavioral economics approach to social change, continued focus on civic tech, a tool for calculating a nonprofit’s true costs, new definitions of membership in the digital age, the evolving public library, digital sabbaticals, and much more.
Below are my 10 favorite reads in the world of social change in May, but feel free to add to the list in the comments. And if you want a longer list, follow me on Twitter, LinkedIn, Google+, or Facebook.
You can also read 10 Great Reads lists from past months here.
- Perhaps some solutions to social problems lie in behavioral economics. Writing in The New York Times, economists Erez Yoeli and Syon Bhanot and psychologists Gordon Kraft-Todd and David Rand argue that the opinion of others, in this case regarding the preservation of natural resources, is a strong social change motivator.
- Civic tech, (the use of new technology to better engage citizens in democracy) has become quite the buzzword lately. But how do we know which civic tech solutions are actually creating change? Anne Whatley from Network Impact offers some tools for assessment in that arena.
- And another nonprofit tool comes from Kate Barr of the Nonprofits Assistance Fund. She provides a great tool to help nonprofits calculate and then articulate to funders the full costs of their work.
- Daniel Stid from the Hewlett Foundation writes a thoughtful piece on what separates good strategic planning from bad, because as he puts it “The real benefit of planning is not the final document but rather the discipline the process imposes, the new information it generates, the working relationships it fosters, and the conversations, insights, and commitments it sparks.” Amen to that!
- In this age of social media and technological connectedness, how do we create more formal structures for belonging to institutions? Melody Kramer, formerly of National Public Radio, is a Knight Visiting Nieman Fellow working on that very question, and she offers some beginning thoughts on the project, including, “Imagine if public radio stations functioned as Main Streets…or in the same way that local public libraries do? It would transform the way people could interact — and participate — in the local news process, and would enhance the stories stations put out on air.” Fascinating.
- Speaking of libraries, NPR writer Linton Weeks provides a history of the public library and how it continues to (and must) evolve in the digital age.
- Great philanthropic futurist Lucy Bernholz has been offline for a bit, and it turns out she took a digital sabbatical. She reports that “without the addictive stimulation and distractions of digital life it feels like my brain grew three sizes.” What a great (and necessary) idea!
- Writing on the UnSectored blog, Marie Mainil describes the importance of building and supporting social movements to create global social change. As she puts it “Collecting data on the dynamics of local, regional, national, and international social change campaigns is the next frontier of organizing for social change. With a visual multi-level collection of ladders of engagement from across the world, social change actors would be able to better plan and coordinate tactics and actions at scale, thereby increasing their chances of success.”
- In May the Center for Effective Philanthropy held their biennial conference. Ethan McCoy provides great roundups of day one and day two. I almost feel like I was there!
- Never one to put things lightly, William Schambra cautions against what he sees as the hubris of tech philanthropists and his fear that they desire to “fundamentally…reshape the social sector in their own image, based on their supreme faith in advanced technology.”
Photo Credit: Erin Kelly
Earlier this week the Nonprofit Finance Fund released the results of their 7th annual State of the Sector survey about the financial health of the American nonprofit sector. This on-going survey, now in its 7th year, has become a fascinating marker to gauge how the nonprofit sector is evolving amid a changing economic climate.
The Nonprofit Finance Fund launched the survey in 2008, when the economic crisis was just beginning. This year results from 5,451 respondents show some positive signs of adaptation and growth, but also recurring challenges that continue to face the sector.
Nonprofits are unable to meet a growing demand for their services:
- 76% of nonprofits reported an increase in demand for services – the 7th year that a majority have reported increases.
- 52% couldn’t meet demand, the third year in a row that more than half of nonprofits couldn’t meet demand.
- Of those who reported that they could not meet demand, 71% said that client needs go unmet when they can’t provide services.
Nonprofits still (not surprisingly) struggle to make ends meet. While some nonprofits are achieving financial sustainability (47% ended 2014 with a surplus, the highest in the history of the survey), many still face real challenges:
- 53% report three months or less of cash-on-hand.
- 32% find achieving long-term sustainability a top challenge.
- 25% struggle to be able to offer competitive pay and/or retain staff.
- 19% can’t raise funding to cover their full costs.
And these financial challenges are due in large part to the catch-22 funders place nonprofits in by routinely covering only a portion of the full costs of the programs they intend to support:
- 70% of survey respondents receiving Federal funding report that the government never or rarely pays for the full costs of delivering services.
- 68% of respondents who receive state funding say the state government never or rarely pays for the full costs of delivering services.
- 47% of respondents who secure foundation funding report that foundations never or rarely cover their full costs.
- While 89% of nonprofits are asked to collect data to capture the effectiveness of programming, 68% of funders rarely or never cover the costs associated with measuring program outputs or outcomes.
So we still have a long way to go.
But those nonprofits who are faring well in this environment are those being strategic. As one human services nonprofit leader put it:
“Sustainable funding continues to be our greatest challenge. Our actions to address this challenge include developing and adhering to a strong and dynamic strategic plan; diversifying our program funding streams as much as possible; developing and communicating a strong community impact statement for our programs; and focusing on increased donor engagement in order to increase fundraising dollars.”
You can dig further into the data from this and past years’ surveys here.
Photo Credit: Nonprofit Finance Fund
I’ve gotten a few requests lately to participate in social change podcast series (see my podcast with Panvisio). I love discussing the many issues in social change work, so I’ve really enjoyed being part of these discussions.
In the podcast, among many topics, we discuss:
- How leadership is the best ingredient for social change effectiveness.
- What true leadership means.
- What a Theory of Change is and why it’s crucial to any social change organization.
- How to develop a Message of Impact and create a Case For Investment.
- The importance of moving from fundraising to financing and what that shift looks like.
- Debunking the “overhead myth.”
- And much more…
Below is the podcast, or you can click here to listen to it.
Photo Credit: Ilmicrofono Oggiono