On the Funding Front (May 02)

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Every now and then I will come across a simple quote that seems to say it all for that point in time. Here’s one from Peter Drucker:

“To survive and succeed, every organization will have to turn itself into a change agent. The most effective way to manage change successfully is to create it.”

This resonates like crazy for me. It drives me nuts when others define the environment and my trusted partners and I are relegated to being pieces on their game board. Especially when it’s a game I don’t want to play.

For instance, it has always bothered me that discussions with nonprofits about capacity building focus primarily on internal factors – our boards, human resource systems, planning and evaluation mechanisms, etc. These are obviously very important to address but I find that the most significant factors limiting our power and effectiveness are external to our organizations. Lately I have been niggling at everyone who will listen to expand the discussion and look at how we can collectively change some of the external factors that limit us.

For instance, one point made often by our friend Pablo Eisenberg is that, if funders are interested in building the capacity of nonprofits, we must attend the elementary problem of there being, in many organizations, insufficient funding to cover core costs. Unfortunately, although this problem gets quite a bit of lip service among funders, it appears that the trend in funding core — operating costs is headed in the wrong direction. According to a recent study by the National Committee on Responsive Philanthropy (NCRP), operating grants, as a proportion of all grants by the top 100 foundations, have fallen from 9.3 percent to 7.1 percent! This is terrible news, particularly in light of the fact that foundation assets have taken a hit and, surprisingly (I’m kidding, folks) foundations are not responding by raising their payout rates.  

Click here to read the recent study by the National Committee on Responsive Philanthropy (NCRP)

On another funding front are the state and federal budget cutbacks. We have been hugely impressed with the energetic and, to date, highly effective state budget advocacy campaign spearheaded by the Minnesota Association of Nonprofits. Their version of going to the mat with Jesse Ventura (get it? This is probably a tiresome joke for Minnesotans, but it’s the first time we’ve used it) included a remarkably effective media campaign examples of which we have attached. We love this campaign because it challenged the way the discourse was being had — it changed the way people understood the game.

Finally, on May 13th and 14th TSNE hosted 350 nonprofit leaders from 31 states at our annual conference. Many of the participants were associated with community-based organizations working in low-income communities. Having that much collective wisdom in one room gave us the opportunity to ask:

“What are the trends that are affecting the health and well being of our organizations and communities?”

You can see the responses to this question in the “Feature article” below but we would also love to have you add to the knowledge base. What trends (positive and negative) do you think we should all be attending to — particularly with regards to the health of our communities? Because that is the end result we have to keep our eyes on, friends. We will continue to use all of your feedback to guide what we choose to cover editorially, here and in the Nonprofit Quarterly and in our online dialogues.

Hope to hear from you soon!