Blog: Kyle Caldwell

The nonprofit sector is very broad in scope, with more than 47,000 nonprofit organizations promoting human services, health care, arts and culture, the environment and education.We’ve seen a 14 percent increase in total nonprofit organizations since 2001. Our nonprofits, especially charities, range from universities and hospitals to local soup kitchens and literacy coalitions. 

Nonprofit charities are referred to as a "safety net" providing valuable services to the community, working with every issue of concern, yet many do not understand the true impact nonprofits make to the state’s overall vitality and success.

The Michigan Nonprofit Research Program will soon release the 2008 Economic Benefits of Michigan’s Nonprofit Sector report, which will show the true breadth of the nonprofit sector. We are considered the fifth largest industry in terms of employment in the state, with one in every ten jobs in Michigan tied to the nonprofit sector. Most Michigan residents have worked with, volunteered for and been served by a nonprofit since nonprofits can be found in every subsector of the service economy, including a strong presence in health care, human services, education and the arts.

A third of the study’s reporting nonprofits are based in the six county metro Detroit region and those organizations account for just over half of the state’s nonprofit assets, expenditures and revenue. The people of Detroit are feeling and seeing the results of this economic crisis every day, but nonprofits continue to push even as demand rises and resources shrink. 

Here are a few examples: 

How will nonprofits respond to the economic downturn? We’ll do what we do best. Change and adapt to continue to provide services to the community. This does not mean that it will be business as usual. The urgency and expanding scope of needs will overwhelm the current capacities, requiring that nonprofits cut costs and create efficiencies through strategic alliances, partnerships and mergers. But make no mistake, we will not cut or merger our way to success. 

Nonprofits will also have to find new ways to fund operations by developing relationships with individuals as well as institutions. We will need to increase transparency and accountability. While we are in an economic downturn, nonprofits will continue to serve, strengthen and transform communities – just differently than we have in the past.

If you would like to receive the complete 2008 Economic Benefits of Michigan’s Nonprofit Sector when it becomes available, please email lsommer@mnaonline.org. 

Michigan also leads in other areas. Unfortunately, they are not indicators we wear with as much pride. As of November, Michigan’s unemployment rate is the nation’s highest at 9.6%. Our graduation rates are 70 - 75% in high school and our college completion rates are 55%. Michigan’s economy is structurally flawed – facing a potential $1.4 billion deficit. All these leading indicators will negatively impact the lives of those who can least afford it. 

Nonprofits often represent underserved or underrepresented populations. Now more than ever, it is important to give voice to these individuals, discuss the challenges we are facing and work toward transforming Michigan communities. For nonprofits in Detroit, the surrounding region and across the state, the task of serving increasing community needs with decreasing resources leaves little time to become further engaged in the process. There are key things you can do immediately to support the nonprofit sector and volunteers in Southeast Michigan and across the state. Email or call your elected officials about issues in your community and ask how they are addressing it, contact your local nonprofits to see how they are informing legislators of the issues that affect their organizations, write a letter to the editor of your local publication addressing the concerns of your community, and encourage nonprofits to invite elected officials to their facilities to see their work and feel the impact.  

In the next two election cycles Michigan will be undergoing nearly a complete turnover in our elected officials due to term-limits. While this turnover represents significant challenges – steep learning curves, loss of institutional knowledge, loss of the relationships built – it also represents an opportunity. Here’s our chance to engrain the habit of civic engagement. We need to create new relationships with our elected officials, position ourselves to be the experts in our communities and focus a fresh pair of eyes to the challenges we are facing. Our engagement does not stop with the casting of a ballot, it just begins. 

Now the President and Congress will complete work on an economic stimulus bill that will funnel billions to states for “shovel-ready” infrastructure projects, but what about our human and social infrastructure? What about the organizations that provide our society’s social safety net – our human care infrastructure? We as a community need to be actively engaged in helping shine a light on the infrastructure that we rely on for our quality of life and demonstrate that the nonprofit sector plays a vital role. 

All across the state individuals and organizations are mobilizing to take action and work closer with government to create vibrant communities and a sustainable future; many of those organizations are in Southeast Michigan. What will you do to invest in your local nonprofits and community? Like our new President, our work just begins

"…now is the time to make real the promises of democracy. Now is the time to transform this pending national elegy into a creative psalm of brotherhood. Now is the time to lift our nation."

Almost 46 years later, it is still the time to lift our nation and make real the promises of democracy. Today, January 19, we celebrate the Martin Luther King, Jr. National Day of Service. Martin Luther King, Jr. recognized the power of many, as well as the power of service. He knew that if many persons came together as a people, their influence would be magnified, their power heightened.   

"This union may never be perfect, but generation after generation has shown that it can always be perfected." President-Elect Obama 

Tomorrow, our nation celebrates the fulfillment of a part of the King legacy that many though might never come, the swearing in of the nation’s first Black President. In Southeast Michigan, and throughout our state and country, people are coming together with the express purpose of serving others and inspiring change. As someone who has dedicated my life to service, I recognize the urgent importance of building a culture of service. Today’s economic climate has left many with less, and even more with little to nothing. As I wrote yesterday, nonprofits are feeling this increase in demand, but it is through service that we can help move missions forward for so many nonprofits by giving of our time, talent and treasure.   

The University of Michigan-Dearborn, in collaboration with Lawrence Tech University, Madonna University and Henry Ford Community College, are celebrating the call to service by holding a weeklong celebration of the King Day of Service. This morning, students from each campus are heading out to 19 separate service sites throughout Southeast Michigan to work with and serve their community members. Activities range from cleaning shelters to building housing to packing food to painting schools. Participants in the Day of Service will work through until the afternoon, at which time many groups reflect on the day’s activities. 

Although today is a Day of Service, we must not forget the challenges our volunteers face each day to make a commitment to service. Higher cost of living expenses are making it difficult for volunteers to maintain their level of involvement. To ease this burden, I encourage employers to provide volunteer opportunities for their employees, and I encourage nonprofit leaders to provide incentives and support to retain volunteers in future years, and promote and instill the ethic of lifelong giving. 

In 2008, over one-half million people across the country chose not to take the day off, but to take the day on. It is my hope that even more people will choose to help their fellow citizens – not only on this celebrated holiday, but regularly.  Today, I challenge you to incorporate service into your life. I challenge you to take time out of your week and make your community a better place.  Although we may be past the primary battles that Martin Luther King, Jr. chose to fight, we’re still "moving up the highway of freedom toward the city of equality, and we can’t afford to stop now because our nation has a date with destiny.  We must keep moving."  We must keep moving if we hope to strengthen our communities, empower ourselves and others, and bridge the barriers we see. How will you keep moving?   

For more information on how to volunteer in your community, visit the Volunteer Centers of Michigan website at www.mivolunteers.org to find you local volunteer center or visit the Michigan Association of United Ways website at www.uwmich.org to find your local United Way.

Yesterday I spoke of the economic downturn and its effect on the nonprofit sector.  We are in tough economic times and nonprofits are being asked to do even more with a lot less.  Today, I want to discuss the importance of collaboration and partnerships, and how each brings an opportunity to create and renew relationships, making organizations stronger and more sustainable to ensure they meet the needs of their constituents.  Partnerships also allow organizations to leverage and save resources, helping funding dollars go further.

Since January is National and Michigan Mentoring Month, there is no better example of collaboration than the Metro Detroit Mentor Collaboration.  The Metro Detroit Mentor Collaboration is a partnership of local mentoring organizations. The founders, The ART of Leadership Foundation, Mentor Connections – Jewish Family Service, Student Mentor Partners, Vista Maria and Winning Futures, along with Mentor Michigan, developed the partnership in 2003 and have since brought together 20 local mentoring programs.  Initially, there was a hesitation about working together.  The organizations saw one another as competitors rather than a resource to succeed and help reach their goals.  However, as the organizations began to collaborate and work together, they realized the collaboration was vital to strengthen mentoring in Metro Detroit.  They have centralized their recruitment and referral process which has made the mentor matching process significantly more successful.  Before, when someone called a specific organization with interest in mentoring, but wasn’t the right fit for their programs, the service ended there.  Now, the partnering organizations are able to refer individuals to another organization’s program that is an appropriate fit.  The organizations also save money and staff time hosting one celebration for all the mentoring programs.  In honor of “Thank Your Mentor Day” on January 22, the Mentor Collaboration will host the Mentor Celebration Gala to honor one mentor from each organization.

Michigan Nonprofit Association went through our own merger in 2007, with the ConnectMichigan Alliance.  Our merger provided the opportunity to join the nonprofit and volunteer sectors to create a more powerful, effective and innovative support structure for nonprofit organizations, higher education institutions and volunteer centers. It also created the nation’s single largest nonprofit association in terms of scope and budget. 

Even with the successes of these mergers and partnerships, we know that we will not merge or partner our way out of our financial crisis.  Still, with the current state of the economy, nonprofits need to rethink, re-assess and retool where they are both financially and in their missions.  Are there organizations in your community or throughout the state doing similar work?  How can you support one another? Are there relationships established currently that could be developed deeper to strengthen your organizations?

The country has officially been in a recession for 13 months, the state fiscal year 2009-10 budget estimates call for a shortfall of about $1.4 billion, and it is no secret that Michigan will continue to face tough economic times well into 2011.  What is less obvious to the general public is how the economic downturn has affected the nonprofit sector. 

This week I intend to blog about the economic impact of Michigan’s nonprofit sector and its struggle with the economic downturn.  Nonprofits are seeing an increase in demand for their services and are being pressed to find new or revitalize old ways to support this increase.  Before I can focus on strategies and solutions, I want to share with you the findings of a recent survey.  In early October, the Michigan Nonprofit Association teamed up with the Johnson Center at Grand Valley State University to conduct the first ever “Critical Issues Affecting Michigan’s Nonprofit Sector” survey.  With more than 300 participating organizations, our goal of the survey was to assess how the struggling economy is impacting nonprofits throughout the state. 

We found that over the past 12 months there has been a surge in demand for nonprofit services across the state.  Ninety four percent of nonprofits agreed that the economy was the primary reason behind this growth. Other contributors? Cuts in the state budget, foreclosures, and the rising costs of fuel and food. While two out of three nonprofits currently have been able to meet the growing demand, we can only speculate how much more nonprofits can handle as domestic auto manufacturing dips further or goes under. 

What I find more troubling is that while 71 percent of responding nonprofits stated that demand for their services has been increasing, half of nonprofits have experienced a decrease in their financial and in-kind support over the past 12 months.  Again, the economy appears to be the main factor.  Changes in financial and in-kind donations have had varying affects on organizations around the state.  Southeast Michigan has been the hardest hit with more than 63 percent of nonprofits reporting a decrease in support during the past year.  Finally, with the forecast for even harder times on the horizon for the Rust Belt States and Automotive Manufacturing Industry, we have to ask ourselves some hard questions.

What does the future hold?  Michigan nonprofits forecast even stronger demand for services in 2009 and expect financial and in-kind support to continue to decrease.  Nearly 80 percent of responding nonprofits expect to see an increase in demand for their services in the next year.  And I should share that 96 percent (yes, nearly all) of Human Services nonprofits who responded to the survey anticipate a growth in demand.  Although many nonprofits are anticipating an increase in demand, the survey found 31 percent of nonprofits with budgets over $6 million have experienced a growth in financial/in-kind support during the past year.  This demonstrates the largest nonprofits in Michigan are adapting to the changing economy.

There is no doubt Michigan nonprofits have been affected by the struggling economy in several ways and it will be important to follow these trends in the coming months.  However, the nonprofit sector is strong and will need to adapt to the economic changes.  Also, Michigan historically has a strong tradition of giving and volunteering.  According to MNA’s 2007 Giving and Volunteering survey, almost half of Michigan’s residents volunteered in 2006, and nine out of ten residents made a charitable contribution in the previous year.  Specific to Southeast Michigan, 43 percent of residents volunteer and nearly 90 percent made a charitable contribution.  We hope to see this giving spirit continue as we see more of our neighbors turning to nonprofits for assistance.

If you work for or volunteer with a nonprofit, have you noticed an increase in demand for services? What strategic changes are you making to evolve with the current economic realities?

To download the full Economic Downturn report, visit www.mnaonline.org.

Kyle Caldwell is the President and CEO of Michigan Nonprofit Association.  You can read more about Michigan’s nonprofit sector through the Michigan Nonprofit Association blog.  Research was compiled and analyzed by Wesley Miller, a graduate assistant at Grand Valley State University working with the Michigan Nonprofit Association.