Helping Nonprofits Help Us

By Cynthia Gibson

If there was a silver lining to the dark cloud of the September 11th attacks, it was the quick and compassionate response of hundreds of nonprofit organizations to this tragedy. Just hours after the planes hit the Twin Towers, scores of New York City's social and human service agencies were providing food and shelter, offering counseling and support services and organizing thousands of volunteers. Arts and cultural organizations, nearly all of which are nonprofits, offered much needed diversion and expressed the shock and pain many felt but could not put into words. Philanthropic institutions raised millions of dollars for nonprofit-led relief efforts for thousands of New Yorkers, their families and their communities.

This is not the first time that nonprofits have stepped up to the plate in times of crisis, nor will it be the last. But events like September 11th are important reminders of the pivotal role nonprofits play in our communities-a role that is sometimes forgotten when crises subside. Every day, across this country, nonprofits provide assistance to the disadvantaged and offer opportunities for millions of Americans to pursue an array of diverse cultural, social political, and religious interests and beliefs. Imagine a community without churches, health care clinics, museums, soup kitchens, hospitals, universities, or civic groups and it is clear how deeply ingrained nonprofit organizations are in our social fabric and how critical their work is to American life.

Today, the nonprofit sector comprises nearly 1.6 million organizations and generates more than $670 billion-about 9 percent of the gross domestic product. It also employs nearly 11 million people (7 percent of total paid employment), and works with nearly 6.3 million volunteers (11 percent of total paid and volunteer employment).1 In New York City, there are more than 8,000 nonprofits with assets over $278 billion and $99 billion in expenses. Of these, nearly a quarter are human service organizations.2

Many of these organizations are small or mid-sized, and, in the best of times, are undercapitalized, understaffed and stretched to the bone as they continually struggle to find and secure the financial and administrative resources they need to carry out their missions. Since September 11th, this situation has only intensified, with many nonprofits facing financial uncertainty while, at the same time, being asked to respond to rapidly increasing needs. They also are grappling with revenue losses, client populations with multiple problems, staff burnout, and the backlash from negative publicity surrounding the allocation of disaster relief monies.

These are issues, says Alisa Baratta, executive director of the Nonprofit Connection, that confronted nonprofits even before September 11th. At the same time, they have shouldered more responsibility for providing human, health care and social services that were once part of the federal social safety net but, since 1996 welfare reform legislation, have shifted to state and local governments. Despite these challenges, nonprofits rarely think twice about diverting their scarce and precious resources toward responding to community needs, especially in times of crisis. "It is a consistent characteristic of our sector that if you are good at what you do, you extend yourself, no matter what," says Fran Barrett, executive director of Community Resource Exchange, which provides technical assistance and management support to small New York City-based nonprofits.

Recognizing the growing demands on the sector, many nonprofit leaders have begun to educate donors, as well as leaders in the public and private sectors, about why it's important for these organizations to have access to the technological, accounting and management resources they need to fulfill their missions without having to face the constant threat of demise. Specifically, nonprofits need help in strengthening their internal systems, diversifying their funding bases, improving their management practices, and incorporating into their operations sophisticated contracting, marketing and fundraising strategies. They also need tools to document their impact, which because nonprofits are mission-, rather than profit-driven, is more difficult to measure. They need capital funding, loans and assistance in using technology to implement programs and activities. And they need to learn how to lobby, just like their for-profit counterparts do, so that their programs, services and missions are protected and strengthened over the long term.

Getting donors to understand the need for this kind of assistance is not easy because capacity-building is not sexy or exciting. It is slow, careful and behind-the-scenes work to strengthen the ability of the organizations to address the issues that donors say they care about. As Mary Ann Holohean, chair of Grantmakers of Effective Organizations is fond of saying, "If you haven't lain awake at night worrying about how you're going to make your payroll, you don't understand capacity."

Nonprofit fundraisers have long understood that most donors, including private foundations, are not as interested in supporting the management of organizations as they are in providing money for the programs, services, or activities that directly affect beneficiaries. The public uproar over the American Red Cross's decision to set aside a percentage of the funds raised post-September 11th so that it would be able to respond to future attacks underscores both the need for more understanding about what it takes to run these organizations and the importance of providing resources to help them do it better. As Jonathan Small, president of the Nonprofit Coordinating Committee of New York, notes: "The media and the public seem to be under the impression that there is a group of thousands of people standing by, fully organized and trained to provide the range of services and operational activities needed to deal with disasters."

Perhaps because of these misperceptions, most nonprofits say that securing support for long-term capacity building is an uphill climb. Less than five percent of current foundation grants, for example, are allocated toward improving nonprofits' performance, including strengthening their infrastructure-the sector's training, technical assistance, data gathering and management support arm, which is still in a fledging stage compared to the private and public sectors. This has to change, says Clara Miller, president of the Nonprofit Finance Fund. "We need more investment in the nonprofit infrastructure so that these organizations have the capacity to sustain their efforts beyond this crisis and respond to future events, if needed."

In addition to more funding, ensuring that the nonprofits the public relies on to serve those most in need will have the capacity to do so will require more collaboration with the private and public sectors. It will also take more understanding among nonprofits about the importance of incorporating capacity-building strategies into their day-to-day efforts-something to which some organizations are still indifferent. Above all, it will depend on the "public's knowing about nonprofit organizations and the contributions they make," says Barrett. Mario Morino, chair of a nonprofit social investment firm agrees: "The men and women who work every day in nonprofits may not wear the badges of our police and fire departments but the services they perform are crucial to the health, strength and unity of our nation."

1 Les Salamon, America's Nonprofit Sector, New York: Foundation Center, p. 22.

2 Urban Institute, National Center for Charitable Statistics, 2002.

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