Exploiting The Economic Muscle of Nonprofits

The nonprofit sector employs more than 10 percent of America’s private workforce, contributes about $985 billion to the economy, and produces myriad benefits that reach into every community and most homes. It’s a powerful, socially-focused engine bent on doing good. Maybe nonprofits haven’t conquered all the problems or brought equal life quality to everyone, but they’re filled with millions of hard-working people who are out there trying.

Given the oversized burden nonprofits carry, the financial data is scary. Some 97 percent have annual budgets of less than $5 million, 92 percent less than $1 million, and 88 percent less than $500,000. Even smaller, 20 percent have budgets of $100,000 or less and many are run by volunteers. About 50 percent have less than one month of cash reserves to draw on if the bottom falls out.

The strain of inadequate, insecure funding is exhausting and often sends nonprofit managers tilting at every windmill that might throw out a grant dollar. And with low pay, long hours, and demanding work, nonprofits can easily turn into socially-motivated sweat shops. There’s no easy way out of this situation. But just as a civil society is obligated to try to face down its dragons, nonprofits are obligated to try to face up to their conundrum. An America without nonprofits would be dystopian. They’re that important.

Every organization has its own pressure points and problems. But there are some commonalities throughout the sector, and for those just starting to unravel this situation, here are a few considerations:

  • Claim the power that comes from your impact. This means embracing evaluation and using data as a tool to leverage increased, sustained financial support. This might mean prioritizing smart data over other compelling needs;
  • Claim the power that comes from genuine connections with those you serve. As the community’s front-line muscle on issues ranging from homelessness and childcare to arts and culture, your influence and importance is real. Use it. Show up at the important tables with a loud, well-reasoned voice;
  • Establish mutually respectful partnerships with funders who share your concerns. Your power rests in the knowledge, passion, and focus you bring to your mission. In the words of the late Norton Kiritz, founder of The Grantsmanship Center, “You’re applicants, not supplicants. Don’t beg.” Beggars see a chance to bring in some cash, think up a project, and chase the money. Applicants see issues that need tackling, make a plan, and build partnerships with funders; and,
  • Take care of your own. Make a livable wage a priority. Support professional development. Provide adequate time off for staff to recharge and come back swinging. Maybe you’ll have to cut back on the service you provide but the long-term payoff will be a greater benefit to the community.

You’re social activists and fighters, the moral engine of our society. Be lean but strong, loud but well-reasoned, tough-skinned but caring, fair and smart. And in the words of Winston Churchill, “Never, never, never give up.” © Copyright 2019 The Grantsmanship Center.