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Making the Case for the Nonprofit
in a Shrinking Economy
dialogue...with Audrey Alvarado
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Executive Director of the National Council of Nonprofit Associations (NCNA) Audrey Alvarado works zealously to build the organizational capabilities of nonprofits and to advocate on their behalf. In this issue of dialogue, Alvarado discusses several organizational issues nonprofits must address: communicating and promoting the value of the sector and its workforce; developing new leaders for the sector through succession planning and the grooming of a special group of diverse leaders; and strengthening the nonprofit infrastructure. Communicate Nonprofit Value
If there is one truth that government, business, donors, and other nonprofit stakeholders should understand, it is this: the nonprofit sector is one of the best investments around. �Nonprofits have always provided a dollar�s worth of service for 50 cents� of funding, says Alvarado. �We�re now being asked to provide that same amount of service�if not more�for 20 cents.� Where else can any investor receive that type of return? Nowhere. Yet, in spite of its tremendous yield, �the sector has historically been under-funded,� and therefore under-supported, according to Alvarado.
�Nonprofits have always provided a dollar�s worth of service for 50 cents�we�re now being asked to provide that same amount of service�if not more�for 20 cents.�
In large part, stakeholders simply do not have a full understanding about the extent to which nonprofit services are an integral part of our society, the value their workforce provides to the citizens they serve, and how much the sector influences the daily lives of all community members, from the affluent to those who are most vulnerable and in greatest need. Paid and volunteer staff have done such a good job of doing more for less for so long that it has become culturally acceptable to take the sector for granted. Additional cuts in funding are typically announced without any discussion or negotiation about how service delivery might be adversely impacted, or possibly eliminated. The public�including government officials, the funding community, and residents in the communities served�relies on the presumption that the sector will manage its resources to meet growing demands even when nonprofits have fewer resources at their disposal. But you can only stretch the sector so far before the stress begins to show. In fact, Alvarado says that the infrastructure is already showing troubling signs of strain. She projects that the fallout from the economy is going to reach such a critical mass that many nonprofits will be forced to merge or close their doors over the next few years. So, the central question is:
What can be done to preserve the integrity of services
and the mission of the sector?
Promote Public Education
Alvarado believes that public education is one of the best lines of defense for our undercapitalized sector. The sector must be able to assess the value it provides and communicate that value to all its audiences. It is a priority that Alvarado�s organization is diligently working on. �NCNA�s goal is to come up with some clear messages that we can help our members deliver to the general public, as well as to elected officials, about the true impact and presence we have in local communities,� Alvarado emphasizes. She adds, �our position has been that nonprofits have saved millions of dollars�if not billions�across the country� for taxpayers. She says that nonprofits are on the front lines addressing problems which, if left unattended, would escalate and cost society much more in the long term. There is no doubt in her mind that the sector is one of the best values around.
�Our goal is to come up with some clear messages that we can help our members deliver to the general public, as well as to elected officials, about the true impact and the presence we have in local communities.�
Volunteers are a fundamental reason why the sector is able to do so much for so little. Volunteer labor has always helped the sector-at-large leverage its precious resources, according to Alvarado. But she says that funders and society cannot expect nonprofit organizations or volunteers to shoulder the increasing weight of reduced funding and greater demand alone. The sector must deliver a clear message on behalf of the citizens it serves that there is a threshold of financial support that must be maintained, and that threshold is higher than current funding levels presume. Additionally, the sector has to hold the line and deliver the message that if volunteers are going to be expected to provide more services and to help the sector fill in the gaps left by projected cutbacks, adequate staff support must be in place to manage and leverage those volunteer resources as effectively as possible.
Alvarado stresses that nonprofit leaders must become skilled in showing taxpayers how much money the sector saves them, and how nonprofits help to raise the quality and vitality of life in the communities they serve. �There are tremendous opportunities for us to be much wiser about the messages we put out and how we get those messages out there. The old ways of not communicating our value do not serve the sector. We�ve got to communicate in new ways,� says Alvarado.
�Our position is that nonprofits have saved [taxpayers] millions of dollars�if not billions�across the country�.
Develop New Leaders
Just as external education is needed to demonstrate the value of the sector, Alvarado points out that internal education and communication is also needed to prepare a new cadre of leaders for service. Re-supplying the leadership ranks and having a pool of effective leaders who also more accurately reflect the diversity of the communities they serve is a management challenge that requires an investment of time and attention by current leaders. �We need to have people prepared and groomed to take over,� Alvarado says.
Succession Planning: Writers for the Winter 2003 issue of Nonprofit Quarterly project that the sector could face an impending leadership vacuum over the next five to seven years as veteran executive directors, many of whom are baby boomers and perhaps founders of their organizations, depart the field. (See Resources section below for more information.) This situation suggests the talents and experiences of emerging and potential leaders must be developed with all deliberate speed to close this looming gap. Succession planning is a critical element of leadership development and an issue not only for staff leadership but also for nonprofit boards. The sector must plan for the transition of new leadership in order to maintain the strength and capacity of the sector, especially during economically challenged times when many veteran executive directors could elect to take their leave.
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Train Diverse Leaders: Alvarado emphasizes that leadership development in the sector is about much more than simply identifying and grooming the next cadre of leaders. She believes an investment in leadership development must also include a commitment to increasing leadership diversity to reflect the demographics of the multicultural communities in which most nonprofits serve.
Overall the current environment is encouraging because the nonprofit sector serves as a land of opportunity for many underrepresented groups. In particular, women fair quite well in the sector. Alvarado references a 2002 CompassPoint study, �On the Rise: A Profile of Women of Color in Nonprofit Leadership,� that reports that women of color in California are holding more executive positions in nonprofits of all types and sizes, including mainstream organizations. However, Alvarado says the study also points out, and she concurs, that women of color still struggle against stereotypes within the sector and that they may need to attain a higher level of education than their male counterparts in order to be hired for comparable positions.
Alvarado believes that while there are more leaders who are women of color in the nonprofit sector than may be found in other professions, she suspects that many �women of color tend to be focused on (and work in) their particular group of ethnicity.� And, Alvarado points out that in general people of color are still largely absent from the leadership ranks at either state or national level nonprofit organizations. Alvarado has experienced this frustration first hand. She notes that she has encountered challenges in generating interest and involvement from the minority nonprofit community within NCNA. �We have 37 state associations. Of those�less than three leaders are from the minority population.� So, while the sector provides great opportunity for women and people of color, the challenge and measure of success is their rise through the mainstream management pipeline. It will not simply happen spontaneously. Admittedly, the sector must become better informed about the importance of leadership diversity. But given its positive performance so far, this is an arena in which the nonprofit sector could lead the way and chart a path for other sectors to follow.
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Resources
For more information on leadership transitions and succession planning, see:
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Close the Infrastructure Gap
Elements: Infrastructure is a term that has received a great deal of attention within the sector. It can be loosely defined as those elements and resources that enable the development and execution of an organization�s day to day operations in pursuit of its mission. Infrastructure also incorporates a nonprofit organization�s ability to access appropriate technical assistance and other resources to improve its capacity and ability to manage the organization. Alvarado foresees additional stress to the network of nonprofit
infrastructure resulting from a nationwide push to increase the number of citizen volunteers, newly spun variations on existing volunteer initiatives, and an increased demand for access to program services.
Challenges: Alvarado offers her opinion that President Bush�s Universal Call to Service for Americans to serve 2,000 volunteer hours over their lifetime is a laudable goal. She suggests that the notion of a national 211 number to refer citizens to social programs and other urgent services within their geographic area may also be a good idea, in theory. However, if the sector does not have adequate infrastructure (programs or volunteer resources management professionals and other management resources) to incorporate these initiatives into their operations, and the initiatives are either unfunded or under-funded, the consequences could be overwhelming. The sector can ill afford for anyone to levy such a call to action or recommend such a broad based new initiative without providing additional support to implement those new ideas. If stakeholder expectations for the call to service and the 211 number are set and then cannot be met because of a lack of infrastructure or resources, the weight of blame will not fall on government or philanthropy. It will fall at the feet of local organizations and the sector overall. In Alvarado�s view, being presented with funding cuts while facing an increased call for services is both illogical and incompatible.
��the sector has historically been under-funded�
Advocacy Alert: Alvarado says even the most �incredibly committed and passionate� nonprofit workforce of professional and volunteer workers cannot continuously fill the growing infrastructure gap. She is concerned about the impact that funding cuts and the demand for more services will have on the morale of this unique workforce, and the impact that the push-pull of less resources and greater needs will have on local communities. Alvarado believes that organizations such as NCNA and AVA must advocate on behalf of all parties in this impending tug of war to ensure the integrity of the sector and to protect citizens. But, it will take a united effort beyond the memberships of these two organizations to make a difference for the sector. Staff and volunteer leaders from individual nonprofits must also carry the message about the need to support the sector from town councils to the halls of Congress. The hearts and minds of the publics served by the sector must also be armed with a working knowledge of nonprofit needs in order to advocate for the preservation of nonprofit services. �We need to collaborate to find ways to support good ideas for the sector�and find ways to provide training and support to the paid and unpaid staff� who implement the broad spectrum of nonprofit services in this country, according to Alvarado. These are the citizens who walk the talk of democracy in a very pragmatic way and who help maintain a more civil society for us all.
| Communicating Nonprofit Value
(Questions to Ask & Answer) |
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Message Development |
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What successes sell the value of your organization? |
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What three key messages would appeal to funders? To taxpayers? To elected officials and community leaders? To volunteers? To customers and clients? |
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Marketing |
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Do you have a �friend-raising� plan? |
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What access or relationship do you or your organization have with elected officials or community leaders who have influence over local or state policies, public opinion, or funding for your issue? |
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How often do you speak with and engage stakeholders? Testify at hearings? Convene meetings to elicit testimony? |
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Can you activate your core supporters to advocate for you? |
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Quantifying Your Impact |
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How many ways can you quantify or add-up your success and impact on the community you serve? |
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What did you do to save your community? Improve its quality of life? |
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What changed because of the service you provided, and to what degree? |
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What would your service have cost the community had you not been there to provide it? Is there a fair market value you can assess? |
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What economic impact do you have locally? Statewide? Regionally? Nationally? |
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Who can you partner with to collect this data? |
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Audrey Alvarado is the Executive Director of the National Council of Nonprofit Associations. Prior to her appointment with NCNA, Alvarado served as the associate dean for student and external affairs at the University of Colorado at Denver, Graduate School of Public Affairs. Among her duties, she oversaw the nonprofit management academic areas for both masters and doctoral students. Some of her other previous positions include: Executive Director of the Latin American Research and Service Agency in Denver, Colorado, and Program Director of the Hispanic Office of Planning and Evaluation�s Talent Search Program in Boston, Massachusetts.
NCNA is a network of 37 state and regional associations of nonprofits representing more than 21,000 nonprofits throughout the country. NCNA serves as the eyes, ears, and voice of the state associations, assuring that key national information is disseminated at the local level and local concerns are raised at the national level. For more information on NCNA, please visit their web site at: www.ncna.org.
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dialogue is a free, on-line monthly publication of the Association for Volunteer Administration (AVA), the international professional organization promoting excellence in the effective management of volunteer resources. The dialogue series is funded under a generous grant from the David and Lucile Packard Foundation. The series provides AVA the opportunity to dialogue with authors, advocates, and leaders across multiple sectors about the profession of volunteer resources management, and their mutual goals to build a more engaged and sustainable society.
In keeping with its name, this publication was created by AVA to stimulate thought and discussion, and to present viewpoints to practitioners from thoughtful individuals they may not otherwise hear from on this topic. Please feel free to forward dialogue on to your colleagues, executive directors of nonprofit organizations, and other nonprofit advocates whom you believe would value its content.
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In the next dialogue...
AVA talks with Steven Culbertson, Executive Director of Youth Service America. [August 2003]
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