Posted By: Michael Tyson
Posted: 2/26/2011
As John Lennon said, "You may say I'm a dreamer…but I'm not the only one." I believe that a 'nonprofit utopia' could exist, and that the time is ripe for it to begin in Metro Detroit. We are at a critical juncture. We are working to redefine ourselves, and to emerge leaner and meaner, and yes even greener (as in eco-friendly). Shared resources, collaboration, and creative synergy could exist in the nonprofit community –and beyond – in and between Metro Detroit communities, including the city of Detroit. Being a visionary is about imagining the possibilities, closing your eyes and envisioning how nonprofits in Metro Detroit could work together to achieve even greater success than they do currently. But what would or could that look like? And how would it work?
The truth is, some of this is already happening through shared efforts and collaboration. Shared accounting and human resources duties exist already between nonprofits in our area. Shared office space and resources for organizations is in existence right here at NEW. There may be other collaborative efforts going on currently that are not public knowledge – or are at least unknown to most of us.
More could be done in collaboration in terms of information technology (IT), allowing nonprofit organizations to share documents, best practices, and software applications. The technology exists to allow this to happen. All it would take is recognizing the benefit of the collaboration, and reaching an agreement. It may be easier said than done, but it is possible. Shared IT professionals could manage servers, websites, and networks for multiple organizations.
It would be necessary to find funders, philanthropists, etc. who are willing to support "back office" sharing and capacity building, crucial to making this successful. Getting the people who write the checks to buy into the vision would be key!
The potential impact on the Metro Detroit area if an effective nonprofit resource-sharing network were to be developed is immeasurable. Streamlining the work we as nonprofits do and eliminating redundancy of missions could make for a more productive, dynamic and powerful nonprofit sector in Southeastern Michigan. There are nearly 50,000 nonprofits in the state. Until the economy improves, the competition for funding is extremely high. This makes the entire sector vulnerable. Donors' dollars could be used more efficiently and effectively. The focus on fiduciary responsibility is vital to the survival of nonprofits, and the ability to use those dollars more effectively and efficiently would certainly appeal to those who are giving them. We have a duty to mission and money and that includes respecting what donors want.
Are there things that NEW could do to be a catalyst to this vision? Certainly there are. What things is NEW currently doing toward this end? NEW's strength is in governance and IT capacity building. These are especially important components to making improvements in the nonprofit sector. It is important, now more than ever, to have strong infrastructure. We can help improve operations so that nonprofits can focus on mission. NEW also has the tools to help nonprofit boards focus on everything that has been discussed in this blog over the last three days!
In summary of the last three days of being a guest blogger here, I would like to say that I have enjoyed having this opportunity not only to tout the strengths of the company which I lead, but also to propose a bold vision of what could be, and to solicit input for getting there.
NEW uniquely understands the challenges of the nonprofit community. NEW is in the trenches with our clients. We understand nonprofits because we are a nonprofit. What makes us stand out is that we've embraced the philosophy that you can do good, make a difference AND make money doing it. Other nonprofits have learned this valuable lesson. Has yours?
Posted By: Michael Tyson
Posted: 2/25/2011
In today's world where success is so often defined by how much money one earns, whether as an individual or as an organization, how do you define success when your ultimate goal is not earning a profit? What does that kind of success look like?
Speaking in terms of NEW, success is defined by (1) Our ability to impact our customers, in terms of our mission to help nonprofits make a difference; (2) Our ability to earn revenue to support that mission; and (3) Our ability to strike the appropriate balance of those two things which allows us to attract the contributions that allow us to keep our fees affordable for the nonprofits we serve – in short, helping nonprofits do more with less!
Success, as defined for the nonprofit, poses challenges in a world where value is determined by one’s "bottom line." Nonprofits must heed the "double bottom line" not only of money, but also of mission. Are we as the nonprofit meeting what we set out to do? Have we lost sight of it? Are we on the right track? And how is all of this measured, anyway, if it's even objectively measurable? Do arts and culture nonprofits define success in terms of how many patrons they have, how many shows are put on, how much music is played, or how much artwork is on display? Do human services nonprofits define success in terms of how many people are served, or how well they are served regardless of number? These questions are not posed to make light of the missions of nonprofits, but rather to try to point out the difficulty of defining success for nonprofits in terms of a profit-driven culture.
Successful nonprofits have found ways to meet the double bottom lines of money and mission. They have stayed true to their mission over the course of time, or have been able to modify it to meet the needs of a changing society. They have successfully managed their financial resources. They have a history of strong leadership, well-trained board members who understand the mission of the organization, and of a strong but flexible infrastructure that can bend – but not break – during difficult times.
Those who fund the nonprofit organization can sometimes define success for the nonprofit. In speaking of donors, success for the nonprofit may be defined in terms of whether they believe their dollars have been used effectively. Has the outcome the donor hoped for, which hopefully resembles the mission of the nonprofit, been achieved? Was there a specific purpose intended for their donation, and was that purpose met? In terms of grants received by a nonprofit, success would likely be defined in allocating the grant dollars to achieve the purpose and outcome in the grant proposal, which must often be reported back to the granting body.
There are organizations that recommend and rate nonprofits based on a variety of criteria. Some may view these organizations as defining a nonprofit's success. Charity Navigator, GuideStar, and the American Institute of Philanthropy are a few. Crain's Detroit gives an annual award for the Best Managed Nonprofit in the Metro Detroit area. These are certainly helpful to philanthropists, corporations, and individuals when determining which charitable nonprofit to which they'd like to contribute, but they do not necessarily define whether a nonprofit is successful or not because a nonprofit could still be meeting its mission and not be recognized by any of these organizations. To provide a list of successful nonprofits in Detroit would be an exhaustive task, because success in the nonprofit world can be nebulous! So I would like to approach it from a different point of view.
In soliciting input from my colleagues at NEW for this blog, NEW's Diana Kern formulated the following questions on defining success for nonprofits. Should success be measured by:
- Mission accomplishment based on outcomes?
- A growing budget every year instead of a shrinking budget?
- A magic number for overhead and fundraising percentages versus money spent on programs and services?
I invite you, the reader, to post your feedback to these questions! How do you define success?
Next post: The Nonprofit Utopia
Posted By: Michael Tyson
Posted: 2/24/2011
In creating a snapshot of today's nonprofit, it first helps to paint a picture of Nonprofit Enterprise at Work (NEW) from my perspective as President/CEO. NEW itself is a nonprofit with humble beginnings in 1993 as a home to other nonprofits. That "home," the NEW Center in Ann Arbor, was built on a site that was originally an unsightly junkyard!
NEW's current programs evolved as a result of getting to know the nonprofit community, its needs, and eventually developing the programs we offer?and have offered over the years – by responding to those needs. From 2001, when NEW helped over 100 nonprofits, until 2010 when NEW helped over 560 nonprofits, the number of nonprofits served by NEW has grown exponentially. These nonprofits function in a wide variety of arenas including human services, education, religion, the environment, and the arts and culture, and impact tens – if not hundreds – of thousands of people. If you're reading this blog and live in Southeastern Michigan, chances are good you have been impacted by the work that NEW has done and may not even be aware of it!
In recent years, it has been no secret that the economy in Metro Detroit has been hard hit, to put it mildly. The nonprofit community as a whole has been forced into a drastic shift because of this downturn. According to the Associated Press, charitable giving from the American public decreased 11% in 2009, the largest decrease in 20 years. Many nonprofits have had to close their doors as a result.
However, the news is not all doom and gloom. Nonprofits that have a focus on basic human needs (food, clothing, shelter) have seen a surge in requests for their services, as well as increases in charitable giving. People have been stepping in to "fill the gap". Mission-focused groups and those with strong, engaged boards are doing well in this environment. Some start-ups are also hanging in there because they have been used to struggling and had little financial support to begin with. Faith-based groups that are continuing to be supported by places of worship are holding their own in this economy as well.
Nonprofits that are "making it" in Metro Detroit are those who have history and experience – those who have survived hard times before. They have leaders and boards who are trained to make tough decisions on how to best allocate increasingly limited resources. And they also have dedicated fundraisers – people who are willing to go out and appeal to funders for help. Without these, nonprofits faced with economic hard times will flounder at best, and often will fail.
Economic hardship has also had a positive effect on many Metro Detroit nonprofits in that it has necessitated collaborative efforts between nonprofits where none had existed before. Organizations with common missions are reaching out to each other to share resources such as space, information, and in some cases dollars. The difficulty in continuing collaboration lies in lack of time and infrastructure, which are often problems nonprofits face to begin with.
Looking at the history of the nonprofit community, one can see the story of Metro Detroit being told in both good times and bad. When times are good, nonprofits supporting arts and culture often thrive. When times are not good, those meeting basic needs of food, clothing, and shelter are enhanced. NEW's Yodit Mesfin Johnson put it best when she said "When it's all said and done, they (nonprofits) unified around their commitment to the community."
The perspective at NEW is similar to other nonprofits in that we, too, have been impacted by the economy. Clearly we are having to live by our own mission of "doing more with less". However, a key difference that may be observed about NEW is that we rely on earned revenue from our programs and products much more than traditional nonprofits do. NEW has also focused on what we do best rather than trying to be "everything to everyone," despite the diversity of nonprofits we serve. Our confidence and success, even in the face of adversity, lies in the fact that we practice what we preach, and our goal is to teach other nonprofits what we know, ultimately enhancing communities in and throughout all of Metro Detroit. NEW is the nonprofit's nonprofit!
Tomorrow: Defining the Successful Nonprofit