Becoming the Sustainability We Seek
So focused on short-term funding for survival, the nonprofit sector is losing its ability to implement innovative solutions to the world’s problems.
“When you’re up to your ass in alligators, it is hard to remember that your original intention is to drain the swamp.”
That quote, attributed to former Atlanta Police Chief George Napper, pretty well sums up the state of nonprofits in America today. So focused on short-term funding for survival, the nonprofit sector is losing its ability to implement innovative solutions to the world’s problems.
Decreased donor giving and cuts in government spending have created a perfect storm that is wreaking financial havoc on the nonprofit sector—today, 1 in 10 nonprofits report having no cash reserve.
Chasing money is the name of the game in the nonprofit sector.
Short-term fundraising prowess has trumped the ability to effectively scale innovation as the most important skill set for nonprofit leadership.
When headhunters call me for referrals for executive directors, they tell me, “First and foremost, they’ve got to be good fundraisers.”
Nonprofit leaders know this. Ask what keeps them up at night, and you’ll often hear it’s the pressure to raise more money. As one nonprofit leader recently told me, “I feel like I’m doing the doggy paddle just to keep my head above water.”
It’s time for a new model. We need a new sustainable strategy; we need to invest early in long-term public policy that changes the entire system.
Answering one crucial question can begin the shift: “What one piece of legislation or regulation can we change that will completely transform the system so that it dramatically improves the lives of those we serve?” The answer to that question will drive sustainable solutions.
Here’s a hypothetical example that illustrates the contrast in the models:
Imagine two innovative social entrepreneur leaders who have developed a successful model to teach students in low-income communities how to start a business—we’ll call them Mr. Fundraiser and Ms. Policychange. Each receives a $500,000 grant to “invest,” allowing them to scale their innovative models nationally.
Mr. Fundraiser uses the traditional model, setting a goal of launching 20 new high schools over the next five years. His big questions are: “Who has money?” and “Who knows people who have money?” After five years, Mr. Fundraiser is considered a huge success when he reaches his 20th high school.
But instead of celebrating, Mr. Fundraiser is more stressed than ever. Each of his twenty high school sites cost around $500,000 to operate per year. He must now raise more than $10 million per year just to keep the organization afloat. Fundraising is prioritized over innovation. There’s demand across the nation for his model, but he and his staff are too busy raising critical funds to develop new sites.
In addition to raising money, he needs to keep the principals of his current schools happy. Every time a new principal takes over one of his schools he must restart the sales process of gaining their support for his program. He experiences an attrition rate of one or two high schools each year as the leadership changes.
Though he’s only meeting 5 percent of the nation’s need for his model, Mr. Fundraiser is exhausted with pleasing donors and is looking for a new career.
Now let’s compare that with Ms. Policychange. Her organization asks, “What policy might we change that would change the rules to change the system?”
She invests her funding into revising federal regulations by building her own policy team and hiring consultants to help her engage on Capitol Hill. She also trains her regional sites in the skills of advocacy.
After five years, her hard work has changed the rules. She’s added “teaching business skills” to the list of requirements in national education regulation. Today, her model is replicated at thousands of high schools across the nation. Her organization serves 60 percent of the nation’s need.
Ms. Policychange’s role has evolved as well. Instead of working on program delivery and site-by-site growth, her organization now provides consulting and training services to high schools across the country that seek to replicate her successful model.
It is time for the nonprofit sector to change the rules that change the world. It must become the sustainability it seeks from others.
Until there’s a shift from scarcity to sustainability, we will never drain the swamp.
Rich Tafel is the president of Public Squared, an organization dedicated to helping nonprofits create sustainable change. He can be reached at: rich@thepublicsquared.com.
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COMMENTS
BY Corinna West
ON July 8, 2011 11:32 AM
This is exactly the thing I am working on as I create my business model. I want to reduce the number of people with emotional distress that get labeled with “genetic” mental illness that might instead have spiritual, social, physical health, or vocational problems. I want less people treated with expensive medications that have long term problems and much less efficacy than the marketing story is telling.
It seems that one option is to create innovative programs that indeed teach people how to support themselves through and beyond difficulty without permanent labels. Yet it seems that as a blogger and artist I have the chance to instead teach the whole country about the need to reconcieve mental distress.
BY Kirsten Phillips, Certified Peer Support Specialis
ON July 9, 2011 07:49 AM
I agree with you, Corinna. I believe if we remove the “labels” people have been given when treated for emotional distress, then we empower each individual toward change. I also agree that often “mental illness” may and often does include “spiritual, social, physical health, and vocational problems.”
As part of teaching people how to support themselves, we need to support the consumer in identifying what pieces are missing as they step out into the community. I believe that providing Transitional Community Support is vital to both the success of the consumer and their ability to learn how to sustain their goal, wants, dreams, over time. There is such a gap of support when a consumer leaves the mental health center it boarders on setting up the consumer to return to services. This does not have to happen.
As we step up (by taking personal responsibility) and step out (of the mental health centers) back into the communities where we live, we have options. As each of us step into recovery, and start living with passion, confidence, and hope, we find out we can be and become healthy people who sustain over time outside of the “system.”
As I create my new business model, I am working on empowering each person toward change. I think this happens when we look at the skills each person has given up to the mental health system. For example: Personal responsibility: Can the individual balance their check book? If yes, great. If no, what is the issue that stands between them and doing this? Take each missing skill and redevelop the skills in a way that the individual can and does master with confidence and self esteem in place. Then, practice, practice, practice the skills until the comfort shows. This also includes support that empowers the individual to be able to step out of multiple agencies and into their own life in a way that they are successful in the community in which the live. And this is only a very small part of Community Transitional Support.
Kirsten Phillips, CPS
BY Linda D. Saffell, VP, Prince Georges Feral Friends
ON July 12, 2011 08:24 AM
Brilliant article, Rich. My micro nonprofit, a local group, unaffiliated with any national organization, saw the need for making bigger change, around 2004. We had just completed a grant funded project, and put together our report on that project. (Thankfully, our funder was stringent about reporting, which caused a lot of reflection in our organization). We saw that without changes in policies, programs like ours had a tough road ahead of them. And the individual citizens who LOVED working with us, would never feel easy about participating, without policy change. We have found no funder in animal welfare work that appreciates the need for this kind of work—in fact, most “rescue groups” also are not sure what politics has to do with animals (after all, “animals can’t vote” as we are famously told). Having operated a successfully program for over a decade, we are pretty confident about what works, and what doesn’t. However, funders want to fund what DOESN’T work, and aren’t listening to us when we try to explain what we’ve found after tweaking over those years, that helps our community. Fortunately, we have a local political administration that is compassionate and interested, however, there are plenty of alligators swimming around all of us, just like everywhere else. Thank you SO much for bringing this to people’s attention!!
BY Colleen
ON July 12, 2011 09:19 AM
Nonprofits are unquestionably constrained by the perpetual need to raise funds from outside sources. I agree that creating a supportive policy environment is one way nonprofits can advance their mission and/or innovative models that they have developed. Unfortunately, playing ball in Washington takes significant time, resources, and organizational capacity. Depending upon who the opposing interests are (and how well funded), even the most well organized and influential nonprofits may struggle to effect change in their favor.
I would argue that an additional path to sustainability for nonprofits is finding creative ways to offset the need for traditional donations. For example, integrating earned revenue streams into operations, or building mutually beneficial partnerships with private sector organizations. Nonprofits can also seek out creative and unusual funding tools that help avoid donor fatigue. For example, the Celebrated Chefs program generates philanthropy through dining. Investing In Communities (IIC) enables individuals and businesses to generate philanthropy through their real estate transactions. In both cases, nonprofits benefit from additional funding without expending time or resources to secure it. In the case of IIC, individuals and businesses direct the philanthropy to their chosen cause, but don’t shoulder the cost. Each program gives supporters a new philanthropic tool that makes giving easier and less costly (or actually free).
Whether nonprofits engage in commerce through social enterprise, or leverage it through programs like IIC, they shouldn’t overlook it as a compelling tool for financial sustainability.
Colleen
Investing In Communities
http://iiconline.org