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Sunday, 24 November 2013 18:02

Nonprofits focus on collaboration to meet heightened demand for services

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Diana Sieger Diana Sieger

The leaders in Michigan’s nonprofit sector say they must identify novel approaches to help their organizations meet an increased demand for services related to the lingering aftermath of the economic downturn.

In West Michigan, nonprofit executives say that’s meant placing greater emphasis on collaboration among their various organizations.

Diana Sieger, president of the Grand Rapids Community Foundation, said the trend in the nonprofit sector is for greater collaboration which comes down to an alignment of programs and services. Sieger said she thinks it’s important for people to understand that when references are made to the nonprofit sector, it is like referring to the business/for-profit sector.

Nonprofits are corporations and each one is unique with focus areas such as the arts, the environment, education, health and human services, community and economic development, Sieger said.

“There isn’t really a push for mergers or having organizations fade away unless there is a good reason. Just to eliminate organizations in order to eliminate organizations doesn’t accomplish anything,” Sieger said. “In Grand Rapids, we are creating an organization called KConnect that demonstrates collaboration, and then some. It will bring together organizations and programs to align together to have a greater positive impact on areas like: academic achievement, family stability, improving living conditions for all in our area, the need for embracing change and inclusion.”

The federal government budget sequester and 12 years of deficit budgets in the state of Michigan have served as the major drivers of collaboration among nonprofits, said Suprotik Stotz-Ghosh, vice president for community investment with the Kalamazoo Community Foundation. Financial hits to state and local governments like these have continued to erode the level of services being provided in communities at a time when the demand for these services is increasing, he said.

“While unemployment is going down, we have a significant increase in the number of people who are going to our daytime homeless shelters,” Stotz-Ghosh said. “The number of people at the lower end of the economic scale who are being served by these organizations is unprecedented.”

In addition to the unprecedented shift, many of these people don’t fit the stereotypical profile of those who seek assistance from nonprofits.

“Because of the economic pressures, those needing food assistance are not like the people we’ve seen before,” said Donna Murray-Brown, president and CEO of the Michigan Nonprofit Association. “These are people who may not feel comfortable or know the traditional chains of service.

“Nonprofits have to retool because everything around them is changing. The race and ethnicity makeup of those they serve is changing, and they need to be thinking about how they can serve the needs of those people.”

Matthew Downey, nonprofit services program director for the Johnson Center for Philanthropy at Grand Valley State University, said he thinks nonprofit organizations will find innovative ways to collaborate structurally but may not engage in mergers the way many funders anticipate they will.

Nonprofit leaders see great hope building organizational capacities through sharing administrative functions, such as evaluation, fundraising, executive staff and financial management, Downey said.

These collaborative arrangements, Downey said, require great care in their construction.

“Mergers are merely one option in a wide range of collaborative opportunities,” he said. “For many organizations that provide culturally sensitive services to vulnerable populations, the assumption that mergers are necessary can lead to more harm than good. Having said that, some organizations will make their way to mergers when it is appropriate and in the best interest of their missions.”

In addition to finding areas of commonalities, Murray-Brown said she thinks more attention is being given to the notion of cross-section collaboration where nonprofits work with for-profit entities to raise money and awareness. She said ArtPrize in Grand Rapids is an example of the benefits of such a relationship.

“It has become a real economic driver for that community, and it also becomes a destination for uplifting artwork and a way to highlight the work of the city’s nonprofit sector where much of the art is exhibited,” she said.

Ian Bautista, president of the United Neighborhood Centers of America, said he thinks 2013 is a breakthrough year for this cross-sector collaboration that will involve the corporate, public and nonprofit sectors forming unlikely partnerships and meaningful results for the people who most appreciate them.

Sieger said the Grand Rapids Community Foundation is focusing on alternative ways to help fund programs such as “program related investments” that essentially provide funding by using assets versus income and creating a loan that is repaid below market rates.

Funding is always a challenge, Sieger said.

Another trend has people putting funds earmarked for charitable giving into investment firms such as Fidelity and Vanguard. That could make funding challenges for foundations even more difficult, said Keith Hopkins, president of Hopkins Fundraising Consulting LLC in Ada.

“As the population ages, more and more people are setting up donor-advised funds to give to charity. These are funds which used to be given to a foundation,” he said. “Now more and more people are putting these funds into investment firms that are becoming the largest recipients of charitable money in the United States.”

In 2012, Fidelity had $3.2 trillion in charitable funds and the country’s United Way organizations had a total of $3.9 trillion.

This doesn’t make a lot of sense, Hopkins said.

“The staff at community foundations are more in tune with the local charitable factors and can still manage the funds,” he said.

Finding ways to get that message out to donors through personal connections will be a challenge for nonprofits as people drop their landlines in favor of cell phones. Hopkins said it’s always challenging to connect with the next generation of donors and to develop ways to get those younger donors engaged with a nonprofit.

Downey said the emergence of a new generation of nonprofit leadership may effectively address ways to get the next generations of donors actively engaged in the work of the nonprofit sector. As baby boomer nonprofit leaders begin retiring at greater numbers, Downey said they will be replaced by younger professionals who have received formal education in nonprofit management by way of university bachelor’s and master’s programs.

“This is a new phenomenon,” he said. “Historically, nonprofit leaders have transitioned into their positions after careers in other sectors. The impact of this shift on performance is yet to be seen, but there are hopes from a stronger, more strategic sector. This is augmented by the fact that many of these younger professionals are gainingquality experience through Americorps opportunities.”

Murray-Brown said the leadership of nonprofits must speak up and be a voice for that sector. She said the city of Detroit’s July bankruptcy filing followed by the shutdown of the federal government was a one-two punch that highlighted the importance of looking for strategies to advocate for the existence of nonprofit organizations because of the great work they are doing.

“We need to coalesce and become co-listeners to speak up and be the voice of that sector and not necessarily be in a position where we’re just the victims of what’s happening,” Murray-Brown said. “We know there are critical needs in the city of Detroit, and we’d like to be a part of that discussion.

“We have to be proactive. This is not a time to be reactive. These things are happening in real time and they need to be addressed in real time.”

Read 4254 times Last modified on Friday, 22 November 2013 14:06

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