Wednesday, May 9, 2012

NonProfit Update Trend
May 2012

This post is the work of friend and colleague  MARILYN HOYT and is published with her permission.  She is at

Here Comes the Sun…It’s been a long cold lonely winter…
Beatles, 1969

Our Nonprofit trends are starting to creep up in 2012…but not as quickly as the needs of those we serve or the expectations of those to whom we report.   The fundamentals are getting better…but we are not feeling the tailwind yet...we need to plan for increased momentum, without spending resources we do not yet have.  A new sort of volatility!

So maybe this is a good time to share research that 1,000 milligrams of acetaminophen (2 Tylenol) actually does make us more able to maintain our focus and confidence when we are criticized or rejected.  Our liver may get grumpy if we try this every day, but it’s a good thing to keep in mind for tough interactions... J  (

Quick Overview of Funder Trends Right Now:

Major Donors – I’m hearing often that new major gifts are expected, but timing is unforeseeable as donors  continue to hesitate in a volatile environment. I’m also still hearing about unfulfilled pledges. (Robert Frank, the Wall Street Journal wealth columnist, reports that half the 1% turned over since 2008.) 

Foundations – 2012 is the first year without 2008 in the 3 year average that often defines total grant making. But the market didn’t suddenly rebound in 2009, so we are not going to see a bigt rebound in grant making. We are seeing signs that funding priority changes made in the tough years are continuing. We are also seeing more forms and e-forms as foundations seek ways to streamline administration.

Corporate – Mixed.  Corporate giving staff laid off are not being replaced, so a lot of community knowledge and grant making experience has been lost.  There are repeated signals that business marketing/branding is more closely related to contribution priorities. E-forms and outsourced grants management growing in some regions.

Government – Overall weak as states and localities continue to struggle with a diminished tax base.  In addition to the impact of lower real estate values on tax rolls; in some states, business is gaining massive relief from taxation by threatening to cut jobs or move out of state. Federal funding is mixed, but generally weak in traditional areas of education, health and human services and culture.

Naïve Theories Abound and Naïve Voices Can Overwhelm Our Messages:

Hard times seem always to breed their crops of fast talkers, simple solutions and willing listeners.  We need to work really hard – every one of us -- to communicate the value of what we do and our authority as those who do it well.  Where we are as a sector ten years from now is dependent on our capacity to make our case now.

Naïve Programs Undermine Our Missions and Our Support:  Easy solutions…sound so good.  Here’s a current example --- It’s not surprising to see new philanthropists punching wells all over dry areas.  Entrepreneurs use the logic model which includes high volume “filling orders” and may see is as a superior approach to all problems. But it’s a failure of strong communication on our part over the years when even experienced resource-funding foundations fall into this simple thinking. In our reports did we include the back story of how we identify well sites and train villagers to maintain their wells?  Did we ever include context for why these extra steps are necessary -- .like references to villagers pulling arsenic-tainted water from new, flash-sited wells? ( of Social Innovation)

If snap actions could yield durable solutions, these problems would have been solved long ago. We work in  fields, where accrued experience across the field yield superior results. We need to be sure that we are touch with the best and brightest in our fields.  And we need to draw more new philanthropists onto our boards and advisory committees, or simply every so often to lunch so they can become informed problem solvers.  We need to ensure that our proposals and reports truly inform and educate our funders.

Naïve Public Policy Undermines Our Capacity to Support Our Communities:  The Payment-In-Lieu-of-Taxes (PILOT) movement is gaining steam monthly.  Hungry communities turn to us for new income.  If your nonprofit – regardless of size or field – has not yet developed a set of bullets articulating how you enhance the local community, NOW is the time.  Here are typical assets nonprofits bring to their communities.  They can be quantified.  Taxing us reduces our capacity to deliver these assets:

-          As Employers:  Private jobs you provide in your zip code

-          As Taxpayers:  Payroll taxes you pay (UBIT too?)

-          Bringing $ to town:  Grants/contracts/earned income you bring to your town/city from outside its borders

-          More services to taxpayers without  higher taxes:  Investments in schools, parks, libraries, parks, needy populations (any directly served by government agencies) provided by nonprofits using private and/or state and federal dollars

-          Public money multiplier:  How many times do you match any public dollars you receive with private dollars from earnings, grants and gifts

-          Leveraging community growth/assisting business:  Social, cultural, health and/or education services that “brand” your community as a quality place to live, shop and visit.

And we should talk about endowments.  They are in the crosshairs…even sometimes internally with our own staff and Trustees.  Endowments keep wealth in town even as business and bellwether families change through the generations.  And endowments deliver earnings that ensure opportunity for innovation or against catastrophic loss of quality and quantity of core services through times like these.   

And Sometimes We Let Ourselves Fall Into the Naïve Trap and Forget What We Know And Can Measure:

Old ways of doing things are producing uneven results.  And new techniques and media for doing our work and raising resources are still not yielding very consistent success.

We need to work so smart as more positive trends begin to emerge. What do we really understand from shrewdly watching the outcomes of our programs?  How can we change the execution of our missions to yield even better results?  Is there anything the naïve philanthropists or micro-managing authority figures, or needy-government policymakers are doing that we should consider utilizing?  Certainly in all this bathwater that’s being thrown around, there must be a baby or two.
Likewise, as many jobs begin to open, we need to be smart about our own careers:

If we remain pretty much confident in the trustees and staff with whom we work, and they in us, we should likely stay put until this first tsunami of job openings washes through over the next year or so.  Too many of these jobs are made up of a whole bunch of former positions that were downsized again and again.  Walk on water jobs are not a good next move.

On the other hand, if our sense is that we can accomplish very little in the position we currently hold…either because of dilution of confidence in us or the dysfunction of our agency, then we continue our highest level commitment at work and begin looking to move.  Life is short.  Careers are even shorter.  There is no reason to mark time where we could really make a difference if we positioned ourselves well in a new job. We need to try hard to truly assess our own strengths (and weaknesses) and avoid stereotypical aspirations (I need to become a director of development or a CEO)  In interviews, we need to engage in discussions that yield insights into the position and agency.  Is this a good fit for us?

It is Helpful to Keep Renewing Our Understanding of the Kinds of Leadership our Sector Needs:

Our work is tough and complex and sometimes we forget why. This terrific article from The Financial Times superficially references political campaigns.  Look past that – it very meaningfully addresses the nature of our work and the leadership it requires of each of us: 

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