October 27, 2019; MiBiz.com
Four nonprofits have banded together in an effort to leverage resources, increase efficiency, and expand their impact in Kalamazoo, Michigan. In doing so, the Kalamazoo nonprofits have joined a trend that NPQ has written about before; last year, for instance, we profiled a similar effort in Rochester, Minnesota.
In Kalamazoo, the idea for a shared service collaborative emerged after venting sessions among executive directors turned into a visioning session, as they recognized they were experiencing similar administrative issues. The group sought to answer a single question: “What power would we have to address issues in the sector if we worked together?”
Two years of holding in-depth conversations, building trust, and gathering stakeholder feedback led to the creation of Hub ONE. Comprising the Boys & Girls Clubs of Greater Kalamazoo, Prevention Works, Urban Alliance and Big Brothers Big Sisters, the new collaborative will focus on creating a shared service-delivery model. With each organization working to combat an aspect of generational poverty, the partnership appears to be a natural fit.
Moreover, with donors and funders requiring most funds to be used for direct services, many nonprofits find it difficult to invest in core mission support activities, such as accounting, human resources, and talent development. For the member organizations of Hub ONE, this was one of many reasons to join forces.
In a press release announcing the new initiative, four long-term goals have been outlined:
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- “The creation of a shared-service delivery model to address intergenerational poverty and the unique challenges faced by individuals and families served by these organizations.”
- “More effective use of community resources, achieving cost reductions through shared functions and responsibilities, economies of scale, and less turnover of personnel.”
- “Increased professional development attained through collective hiring, training, and retention efforts based on best practices.”
- “More comprehensive care for individuals and families achieved through a holistic approach to the delivery of services.”
To clarify, Hub ONE is not a merger, nor is it a new, independent nonprofit. While the collaborative will hire a chief of staff to manage day-to-day operations and navigators who will assist families in obtaining services from multiple organizations, its work will be led by the executive directors with input from boards of trustees, donors, community partners, and other nonprofits. In the spirit of continuous collaboration, the four nonprofits eventually intend to collocate.
To make the collaborative work, gaining the buy-in of the Kalamazoo community has been essential. In an article for Second Wave Media, Danielle Sielatycki, CEO of Prevention Works, noted that during the initial planning stages, the group met with funders and partners to discuss if they would be interested in backing such an initiative. The Stryker Johnston Foundation was the first to sign on, investing $8.3 million dollars over a three-year period.
The collaborative has also received support from local businesses. Old National Bank will donate the 2021 proceeds of its biennial fundraiser, 100 Cooks That Care, to support the growth of Hub ONE. According to Luke Kujacznski, Executive Director of Urban Alliance, consolidated fundraising efforts have been warmly received by the community. Consolidated fundraising also provides benefits to each organization as well. With equity being the centerpiece of the partnership, the organizations have agreed to distribute money based on need.
NPQ has been steadfast in advocating for supporting full costs of organizations. (To learn more on the case to cover full costs, read here, here, here, and here). In the article “10 Reasons Why the 15 percent Charity Overhead Myth Prevents Social Change,” Gail Pico notes that overhead caps stifle social progress by restricting funding for use in effective management (e.g. professional development, evaluation, and strategic planning), keeps direct-service employees in poverty, and discourages innovation by not permitting organizations to take risks in trying new methods.
Each member of Hub ONE has been negatively impacted in some way by overhead myths. For instance, many of their employees are eligible for the programs they offer. Consequently, the group asserts that much of their time is spent trying to hire and retain employees who are driven to leave the sector for better pay. Sielatycki hopes the new collaborative will free resources for member nonprofits to pay employees more competitive wages, thereby helping reduce turnover and its associated retraining and onboarding costs.
The fact that each organization works with the same population reinforces the benefits of working together. Ultimately, Hub ONE hopes to shift mindsets away from competing for grants, donors, and clients and to focus on what Vu Le refers to interconnectedness, the idea that the success of nonprofit sector is tied to the understanding that we are all interconnected despite varying missions. NPQ looks forward to seeing how Hub ONE moves forward with their vision to create a “paradigm shift to drive change” within Kalamazoo’s nonprofit sector.—Chelsea Dennis