Nonprofit Survival Requires Philanthropic Advocacy Funding
posted on: Friday, April 01, 2011
By: Christine Reeves
This past week, the Hudson Institute’s Bradley Center for Philanthropy and Civic Renewal and The Nonprofit Quarterly hosted an interesting panel discussion, titled: “Crunch Time for Nonprofits.” The panelists included Tim Delaney, president and CEO of the National Council of Nonprofits; Eugene Steuerle, fellow at the Urban Institute; Ivye Allen, president of the Foundation for the Mid South; and Steven Malanga, fellow at the Manhattan Institute.
The panelists and active members of the audience discussed issues directly and indirectly related to a recently published series of articles in the latest The Nonprofit Quarterly, with a particular emphasis on one article: “An Uncomfortable - but Necessary- Conversation,” authored by Delaney.
During his speech, Delaney illustrated the dismal and disquieting state of America’s nonprofit topography. Then, he made several important points about changes that must be made. As of 2011, Americans in all 50 states currently endure a total of $430 billion in budgetary shortfalls. Another $112 billion in budgetary shortfalls are predicted for 2012. This means, among numerous other crippling consequences, that most nonprofits’ budgets are being slashed (at best) and obliterated (at worst). This situation leads to yet another consequence: nonprofits are unable to provide support for communities and causes that are in need. Further compounding this epidemic of a problem, Delaney explained how the government is “abusing the contract relationship with nonprofits… withholding money legally and morally owed to nonprofits.” In fact, 68 percent of nonprofit human service providers do not receive the funding promised to them in their signed and legally binding government contracts.
Delaney also offered more specific examples of how “governments starving for revenue shift the burden to nonprofits.” Three nearly identical nonprofits (located in Wisconsin, Louisiana and Maryland, respectively) received identical amounts of federal funding for administrative overhead costs. However, none of the three will actually receive the same amount of that identical funding, since each state keeps a certain amount of the federal funds for itself. The Wisconsin-based nonprofit received 14 percent of its administrative overhead funding; meanwhile, the Louisiana-based nonprofit received 6.8 percent, and the Maryland-based nonprofit received none.
Now let us consider the board room of a nonprofit, a place where many smart and dedicated nonprofit leaders are worried about the words “advocate” and “lobby.” Delaney explained that it is “shameful … and malpractice when attorneys on boards say you cannot lobby.”
Nonprofits do not receive government-issued invitations for a reserved seat at the decision-making table, but they do have the right and obligation to claim a seat for themselves. Nonprofit workers, who comprise 10 percent of the American workforce, do not have a single legislative committee or subcommittee at the federal government level or at any state government level. If nonprofits don’t claim a seat, who will look after the best interests of all the people they serve? Who will speak for the poor, underserved, unprivileged, marginalized people in our communities? Who will offer crucial perspectives that can end up saving taxpayers money, improving efficiency, providing on-the-ground knowledge, and revealing inequities in the system?
If the government reneged on a contract with a defense contractor, the defense contracting corporation would never stand for such behavior. In fact, it would probably take a matter of minutes before the CEO of the defense contracting corporation released a team of in-house lawyers to bring justice to the situation. Sadly, but obviously, nonprofits are not financially equipped with teams of lawyers to dispense that justice. Therefore, they must advocate for their own survival and for the survival of the vital services, issues and people they serve, because if nonprofits don’t, America will be weakened by the casualties of those services, issues and people.
Ivey Allen, president of the Foundation of the Mid South, summarized the situation quite succinctly: “Change doesn’t just come from addressing basic needs. It comes from addressing inequalities. Our goal is to go out of business and to go out of business, we need to advocate for more resources.”
The size of the budgetary pie is only so big, and nonprofits have finite time, resources and staff. So, nonprofit advocacy isn’t optional, but crucial. According to NCRP’s series of Grantmaking for Community Impact Project Reports, for every $1 foundations invest in nonprofit strategies of advocacy, community organizing and civic engagement, there is between $89 and $150 return-on-investment that helps the foundation advance its mission, the nonprofit achieve more results, the community prosper, the government become more efficient and effective, and the taxpayers save money. Foundations that invest in this create philanthropy that becomes a win-win-win-win-win scenario.
Let’s advocate for common ground issues that address root problems. Let’s organize for stronger, healthier communities. Let’s engage civically to ensure that all stakeholders—not just decision-makers—sit and speak at the table. It’s time for a quintuple win scenario.
Christine Reeves is field associate at the National Committee for Responsive Philanthropy (NCRP).
Labels: advocacy, Civic Engagement, community organizing, Grantmaking for Community Impact Project
By: Christine Reeves
This past week, the Hudson Institute’s Bradley Center for Philanthropy and Civic Renewal and The Nonprofit Quarterly hosted an interesting panel discussion, titled: “Crunch Time for Nonprofits.” The panelists included Tim Delaney, president and CEO of the National Council of Nonprofits; Eugene Steuerle, fellow at the Urban Institute; Ivye Allen, president of the Foundation for the Mid South; and Steven Malanga, fellow at the Manhattan Institute.
The panelists and active members of the audience discussed issues directly and indirectly related to a recently published series of articles in the latest The Nonprofit Quarterly, with a particular emphasis on one article: “An Uncomfortable - but Necessary- Conversation,” authored by Delaney.
During his speech, Delaney illustrated the dismal and disquieting state of America’s nonprofit topography. Then, he made several important points about changes that must be made. As of 2011, Americans in all 50 states currently endure a total of $430 billion in budgetary shortfalls. Another $112 billion in budgetary shortfalls are predicted for 2012. This means, among numerous other crippling consequences, that most nonprofits’ budgets are being slashed (at best) and obliterated (at worst). This situation leads to yet another consequence: nonprofits are unable to provide support for communities and causes that are in need. Further compounding this epidemic of a problem, Delaney explained how the government is “abusing the contract relationship with nonprofits… withholding money legally and morally owed to nonprofits.” In fact, 68 percent of nonprofit human service providers do not receive the funding promised to them in their signed and legally binding government contracts.
Delaney also offered more specific examples of how “governments starving for revenue shift the burden to nonprofits.” Three nearly identical nonprofits (located in Wisconsin, Louisiana and Maryland, respectively) received identical amounts of federal funding for administrative overhead costs. However, none of the three will actually receive the same amount of that identical funding, since each state keeps a certain amount of the federal funds for itself. The Wisconsin-based nonprofit received 14 percent of its administrative overhead funding; meanwhile, the Louisiana-based nonprofit received 6.8 percent, and the Maryland-based nonprofit received none.
Now let us consider the board room of a nonprofit, a place where many smart and dedicated nonprofit leaders are worried about the words “advocate” and “lobby.” Delaney explained that it is “shameful … and malpractice when attorneys on boards say you cannot lobby.”
Nonprofits do not receive government-issued invitations for a reserved seat at the decision-making table, but they do have the right and obligation to claim a seat for themselves. Nonprofit workers, who comprise 10 percent of the American workforce, do not have a single legislative committee or subcommittee at the federal government level or at any state government level. If nonprofits don’t claim a seat, who will look after the best interests of all the people they serve? Who will speak for the poor, underserved, unprivileged, marginalized people in our communities? Who will offer crucial perspectives that can end up saving taxpayers money, improving efficiency, providing on-the-ground knowledge, and revealing inequities in the system?
If the government reneged on a contract with a defense contractor, the defense contracting corporation would never stand for such behavior. In fact, it would probably take a matter of minutes before the CEO of the defense contracting corporation released a team of in-house lawyers to bring justice to the situation. Sadly, but obviously, nonprofits are not financially equipped with teams of lawyers to dispense that justice. Therefore, they must advocate for their own survival and for the survival of the vital services, issues and people they serve, because if nonprofits don’t, America will be weakened by the casualties of those services, issues and people.
Ivey Allen, president of the Foundation of the Mid South, summarized the situation quite succinctly: “Change doesn’t just come from addressing basic needs. It comes from addressing inequalities. Our goal is to go out of business and to go out of business, we need to advocate for more resources.”
The size of the budgetary pie is only so big, and nonprofits have finite time, resources and staff. So, nonprofit advocacy isn’t optional, but crucial. According to NCRP’s series of Grantmaking for Community Impact Project Reports, for every $1 foundations invest in nonprofit strategies of advocacy, community organizing and civic engagement, there is between $89 and $150 return-on-investment that helps the foundation advance its mission, the nonprofit achieve more results, the community prosper, the government become more efficient and effective, and the taxpayers save money. Foundations that invest in this create philanthropy that becomes a win-win-win-win-win scenario.
Let’s advocate for common ground issues that address root problems. Let’s organize for stronger, healthier communities. Let’s engage civically to ensure that all stakeholders—not just decision-makers—sit and speak at the table. It’s time for a quintuple win scenario.
Christine Reeves is field associate at the National Committee for Responsive Philanthropy (NCRP).
Labels: advocacy, Civic Engagement, community organizing, Grantmaking for Community Impact Project
posted by Christine Reeves at
2:42 PM
3 Comments:
Interesting take on the survival of nonprofits in today's world. The government behaves as if the philanthropic sector exists in a bubble. The sector has big names like the Ford Foundaton and the Bill Gates Foundation who don't need government funding and have a team of lawyers of thier own, but those big names reflect a very small percentage of today's nonprofits. Most nonprofts are small, unkown, and geared toward serving the immediate needs of thier communities and in closing gaps in services that are not being provided by the goverment. Unfortunately I lot them do this quietly. They need to make some noise, get political, use social media to ge thier message out, toot thier own horn, and stress the importance of funding and equality in funding to help people. Money alone cannot promote the common good, but financial resources are necessary to make good and important things happen.
By
Cynthia Y. Manick, at 10:17 AM
Cynthia, thanks for your comment. You are absolutely right that money alone cannot promote the common good. Money is power, though, as you referenced. Money has the ability to attact more attention to important causes, recruit stronger human resources talent, bring small/successful projects to a larger/even more succesful scale, and if a person/organization acquires enough money that person/organization often gains a seat at the decision-making table. However, most small nonprofits (no matter how true their cause or how hard they work) will remain small. So, if we can't always expand the size of their budgets, we can always work to make the grantmaking system as equitable and democratic as possible. It won't be easy, but it is possible.
By
Christine Reeves, at 10:42 PM
Interesting article! Thanks for sharing about this article Christine. I'd love to learn more about the Nonprofit Survival Requires Philanthropic Advocacy Funding. Thanks!
By
Engagement Invitations, at 11:16 PM
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