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In the collective pain of this moment, when our days are filled with death and fear, a new America is being conceived of and demanded. But moments are made by movements. If we want to change the world, it could be instructive to pay attention to a group of people who have radically changed their own.

“The Tenants who Evicted Their Landlord,” Michael Desmond, New York Times

This is one of those times we can feel parts of the so-called “nonprofit infrastructure” straining mightily to appear relevant, even while others are right on the mark. Faced with an existential crisis of immediate consequence and epic proportions, some focus firmly on the survival of current institutions: will “nonprofits” survive or not? But is that really the question? The one we have in front of us right now is more like, “What forms will we be taking when the environment begins to stabilize, and how do we retain our most important functions as they will be needed by the public?”

In any case, in this article, we are responding to The Health of the US Nonprofit Sector, the most recent report of the Independent Sector (IS). For the uninitiated, IS is an organization that has, over the years, often claimed to represent the sector as a whole even while it has been dominated by larger nonprofits and foundations. In that role, it has taken on a number of well-funded initiatives that have, over the last few years, consistently failed to advance the sector’s practices. I might suggest that this may long have been baked into the design of that organization.

Indeed, in 2005, when IS was in the midst of one of those initiatives, NPQ ran an article by Scott Harshbarger wherein he charged leadership groups in the sector with “ragging the puck”—assuming the ultimate defensive posture by always trying to run down the clock on any attempts at sectoral reform, particularly of philanthropy. Then and now, these efforts at delaying in the face of opportunities to progress get cloaked in “leadership” language that implies the organization is taking action. Reports are issued, numbers with no meaning made are presented, and nothing really much changes except that a lot of money that might be useful elsewhere is spent.

The mission of IS, by the way, is to support civil society, not the nonprofit sector per se, but this is the ultimate contradiction: The report reveals a calcified view of a civil society that has been institutionalized. And that institutionalization is a lens that’s used over and over, even when communities and movements are already miles down the road, giving due consideration to where complacency in the face of oligarchy, ever-worsening inequality, and longstanding structural racism has brought our democratic life.

This is what’s most disturbing about the latest Independent Sector report. It’s a bid to save frameworks and institutions rather than change them—and that, right now, is not leadership.

NPQ took IS on earlier this year when it released the findings of a survey it undertook in conjunction with its DC lobbying firm, Washington Council. Therein, it characterized nonprofits with staffs between 500 and 5,000 and with budgets that averaged $80 million annually as “mid-sized.” But the portion of US nonprofits with budgets on that scale is minuscule and could never be characterized as mid-sized. Don’t take it from us; Candid shows that more than 66 percent of nonprofits function on budgets less than $1 million. In addition, the survey itself was tiny, capturing only 110 responses.

The survey’s design was clearly built, as one could note from the then-current lobbying efforts of IS, around making a point about the PPP forgivability needs of larger organizations in terms of stimulus dollars. It was, in other words, a manipulation, and therefore an affront to the concept of credible data at a time where the credibility of such data was important to protect in pursuing a strong policy agenda.

This incident suggests that two things are true: IS has not really abandoned its primary accountability to large organizations, including its own funders and board members, and IS does not respect research enough to do it or present it in a fair and even-handed way. We are only making this point because we see in the report itself that IS has mixed into its recommendations (purportedly drawn from the research presented) an oft-repeated suggestion that it be funded as the central holder of a national survey project, a job which it clearly is not up to. Here’s how that came across:

  • It is important for…practitioner organizations, to request funders cover the real costs associated with an annual survey of a nationally representative sample of nonprofits.…[I]n the future, Independent Sector anticipates releasing…a comprehensive annual report.” (p.31)
  • Under “Data Recommendations for Financial Resources”: “1) The sector needs to create a representative, annual survey of nonprofits….3) Annual, nationally representative research and analysis.” (p.10)
  • Under “Data Recommendations for Governance and Trust”: “1) The sector needs a sustained, annual assessment… 2)…therefore, the sector would benefit from a nationally representative survey of nonprofit organizations and their board members.” (p.19)
  • Under “Data Recommendations for Public Policy & Advocacy”: “1)…The sector needs a nationally representative survey of nonprofits.” (p.24)

It is with no artifice that the report concludes, “Independent Sector is committing…to producing a data-infused report of increasing quality….” (p.32)

This isn’t the first time IS has confused a so-called study with a campaign to get itself funded. We would direct readers to an article we published by NCRP’s Aaron Dorfman, “Study about Nonprofit Advocacy Spoiled by Outrageous, Self-Serving Recommendations,” similarly in immediate advance of its conference. There, Dorfman points out:

The primary recommendation is that a single organization should be anointed as the “convener, coordinator and driver” of a process to improve advocacy on sector-wide issues and should be given an annual budget of $5 million for the next four years to carry out the work. The unstated implication is that Independent Sector should be that organization. This audacious recommendation is not supported by the research and, in fact, directly contradicts the findings from this very same report.

But that was then, and this is now. Besides the self-serving recommendation, this report contains little that is truly original or useful in our current context. It cites multiple surveys of nonprofits done all over the country, seeing them as useful even when the information gathered in many of them was too small, nonspecific, speculative, or static to be of much use. Additionally, the timelines of each piece of research mix “new” COVID-related data with information as old as a decade or more, with the newer findings drawn from multiple small samples. Though lengthy and filled with graphs, it’s a confusing read.

We have suffered from limited and unimaginative reference tools like these for decades, and to our detriment. When we compare this even to survey-based studies done in the small business sector, there is a stark difference in quality and nuance.

Penultimately, IS has demonstrated an inability to keep up with the sector and make meaning of what is emergent and of consequence in real time. For instance, the current pandemic-related recession has very harsh implications for some types of organizations over others, and some of those organizational types comprise the human infrastructure of our communities. Setting aside the aforementioned problems, by using a broad brush to look at what is happening for nonprofits writ large, it neglects the very real differences in vulnerability between one field and another. Thus, it loses meaning and usefulness. And finally, circling back to the point about the institutional lens being used, the entire report is lacking a frame about democracy and activism. The section on advocacy neglects to mention some of the most powerful and notable advocacy and self-advocacy trends in our sector, concentrating primarily on what nonprofits do for themselves as institutions.

Overall, the report neglects to include in the frame any mention of the macro-scale issues driving politics and policy right now. This may be an attempt at nonpartisanship, but it fails to address some immediate threats and opportunities, and that is emblematic of the problem that holds all of us back from addressing central issues that must be faced to facilitate an active democracy.

To be sure, the task is a complicated one. You want to be nuanced and respectful of sectoral variation, so the data is specific enough that people can meaningfully use it, and yet you also want data that’s comprehensive in scope. The tension between these objectives is why research design is so important. There are, however, options, and we know this because we have seen this year a number of reports that have done a far better job of striking that balance. For instance:

Speaking of strategy, there are a number of sectors that are challenged to adjust their business models. We write about this regularly at NPQ, and while the outlook in some cases is indeed dire, it is also true that we regularly find innovative ways to rework business models to serve community. Oddly, sometimes the for-profit sector has a better understanding of this. At NPQ, we are hardly big fans of McKinsey, but we have to admit that their compilation of research articles released last month, titled What Now? Decisive actions to emerge stronger in the next normal, at least has the virtue of asking the right questions.

What now, indeed? The IS report has some recommendations, but even when they are not directly self-serving, they fail to capture the civil society that exists outside of the formal nonprofit sector and which faces so many hostile forces—a pandemic, unvarnished white supremacy, and economic deprivation, to name a few.

Earlier this year, at NPQ, we published a series of articles on the Great Recession of the late 2000s. We noted that nonprofits came out of the Great Recession stronger than before, but the civil sector that nonprofits serve did not. Now, we risk seeing a similar dynamic play out, only with far more severe consequences. A recent Washington Post article noted that six months after the pandemic shutdown occurred, the top quartile of the US population has higher employment than before, even as the bottom half of the US is facing depression-level unemployment.

In the end, the report, which IS says took them two years to produce, is more of a loosely organized compendium of other people’s research of varying degrees of credibility than a health index. It raises none of the core questions the sector is struggling with, sidesteps specificity and meaning, and advances its own interests when it should be focused with laser clarity on what is happening at ground level among people who understand what details matter to whom, and when.

NPQ depends upon a wide field of researchers in and around the sector to help provide the data and, often, some of the analysis we need to help advance the work and leverage of nonprofits, national and local policy, and regulation, but the rigor of that, and the degree to which researchers actually take up the questions currently in play at ground level, matters greatly. This report is not a convincing test of those capacities.