June 13, 2010; Source: Star Tribune | Several Minnesota nonprofits spoke with Daniel Johnson, a board member of the Charities Review Council and past chair of the Minnesota Council on Foundations. He penned an op-ed for the Star-Tribune based on their insights on what’s changed for the sector.
To Johnson, the nonprofits describe a “new normal” that has “rocked” the state’s social sector. The increasing service demands and constrained revenue streams aren’t news. Despite the bravado in the national press about post-recession charitable giving coming back, the nonprofit leaders Johnson talked with “believe the traditional financial underpinnings of the sector won’t return.” The recession will put some out of business, which one foundation president said, “will be a good thing” resulting in a stronger nonprofit sector.
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But few nonprofit board members sign up to be part of the dissolution of the organization they’ve signed up to lead. The message that this op-ed writer gleaned was that to survive, nonprofits will have to be focused on earned revenues and “a capacity for prudent risk taking, including the ability to throw a safety line to others.” That means, in part, collaboration, not just for its own sake, but “apply(ing) the lessons from the private sector’s vast merger and acquisition experience to hasten consolidation.”
We wonder how many nonprofit leaders really know the experience of for-profits and mergers, the high failure rates, and the promethean challenge of blending organizational cultures. Moreover, not all nonprofits are service providers. We hope that that foundation leader who told Johnson, “Let those that will die, die,” remembers that many small, community-based nonprofits give voice and representation to populations whose issues and interests get lost in the larger, less-than-community-based organizations.—Rick Cohen