The purpose of this special issue of the Nonprofit Quarterly is to call on grantmakers to acknowledge the importance of providing funding for the nonprofit infrastructure — a wide and diverse network of intermediary organizations at the local, state, regional, and national levels — that helps the individual nonprofit organizations supported by funders become optimally effective. What is infrastructure and why should funders support it? The answer is below.
Each year, foundations give away millions of dollars to nonprofit organizations engaged in efforts to meet some of the toughest challenges our nation faces. These nonprofits feed the hungry, house the homeless, provide healthcare, educate young children, support the arts, and provide outlets for citizens to express their views or to volunteer.
In most cases, these nonprofits are undercapitalized, understaffed, and stretched to the bone as they continually struggle to find and secure the resources they need to carry out their missions. Since September 11, 2001, this situation has intensified, with nonprofits responding to rapidly increasing needs while facing diminished resources, not only from foundations, but from public and other private sources as well.
Foundations have played — and continue to play — an important role in providing needed financial resources to the nonprofits they support. And, in recent years, foundations have increasingly realized the importance of providing more funding to help their nonprofit grantees obtain services or assistance that will build their capacity to endure over the long term.
The upward trend in the number of foundations providing support for building the capacity of their individual grantees, however, has not been accompanied by a parallel level of interest in supporting the organizations providing this capacity-building assistance. These oganizations are the intermediaries working at the local, state, regional, or national levels that offer management support, advocacy, data, training, technical assistance, and other services to grantees and thousands of other nonprofits that benefit from them.
These intermediary organizations (see the map on pages 28 and 29) are the nonprofit sector’s infrastructure. Like a body without a backbone, a sector without a strong infrastructure will crumble; yet, the nonprofit sector’s infrastructure — its role, what it contributes to society, and what it offers to nonprofits — is still largely a mystery to many funders. This lack of awareness threatens the stability of our nation’s nonprofit sector, and in particular, whether it can and will continue to serve, along with the public and private sectors, as one leg of the three-legged stool of a healthy democracy.
In recent years, for example, two of the largest funders that supported infrastructure development ceased funding in this area, eliminating nearly one-third of the financial investment needed to meet the nonprofit sector’s rapidly growing capacity-building needs. And while a few other funders have stepped in to help fill the gap, their contributions are not nearly enough to meet these increasing needs, nor do they provide the consistency the sector needs to grow and flourish. Now, more than ever before, nonprofits need management support; technical assistance in marketing, governance, technology and financial systems; and tools to document their impact. 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. They need help in communicating and evaluating what they do. And they need a strong academic base to train new professionals and generate rigorous research about the sector and its work.
Infrastructure organizations provide these crucial capacity-building services to nonprofits. That is why, as some of the funders who have supported the development and growth of the nonprofit sector’s infrastructure for many years, we are asking that all funders consider allocating at least some portion — whether it is one percent or one hundred percent — of their grant dollars to support for this infrastructure at whatever level they choose: local, state, regional or national. If only 1,000 funders contributed $100,000 apiece, it would not only make up the gap we currently face in ensuring the stability of this infrastructure, but it would also ensure the longevity of the nonprofit sector.
Before funders can contribute to the nonprofit infrastructure, however, they need to know more about what exactly the nonprofit sector infrastructure is, what it does, and what it contributes to their grantees as well as to society overall.
As with the private and public sectors, the nonprofit sector’s infrastructure comprises organizations at the local, state, regional, and national levels that help nonprofits become more effective, transparent, and accountable. Among these levels is a reciprocity that is vitally important. Local infrastructure groups need national infrastructure groups to help them monitor policy across states, obtain national-level data, conduct research, identify national trends, network for cross-learning and lobbying power, and engage in numerous other activities that benefit the sector broadly. National infrastructure groups depend on local or state intermediaries to provide them with information about the thousands of nonprofits “on the ground” with which they come into daily contact because this strengthens national advocacy efforts on behalf of all nonprofits.
No matter at what level one examines the nonprofit sector’s infrastructure — local, regional, state, or national — it has several common attributes. Specifically, this infrastructure does the following:
Advocates and represents the sector in public policy circles. Infrastructure organizations provide a “voice” for the sector in the conception, enactment, and revision of laws and regulations that affect either the nonprofit sector as a whole or the work of a subset of organizations. Such laws and regulations, for example, could restrict a nonprofit’s ability to lobby or advocate state laws or policies related to how government contracts are paid, in turn threatening the capital positions or financial management of thousands of nonprofits. At the national level, a number of groups exist to guard the advocacy rights of nonprofits and to promote advocacy as a tool; among them are Charity Lobbying in the Public Interest, OMB Watch, the Alliance for Justice, and the Advocacy Institute. These organizations teach nonprofits how to lobby, educate nonprofits about the legal parameters of such advocacy, and advocate for nonprofits’ right to engage in the public policy making process. At the local level, state associations may play this role; the Minnesota Council of Nonprofits, for example, has conducted major educational and media campaigns calling for a limit to state budget cuts to nonprofits serving poor and vulnerable constituencies in that state.
Provides training, management and other capacity-building services and assistance that help make nonprofits more effective. Infrastructure organizations offer technical assistance or training in fundraising, communications, strategic planning, business plan development, financial planning, technology, board development, and other key areas in which nonprofits often need help. Hundreds of management support organizations and state associations often provide these services across sub-sectors (arts, human services, health, housing, and so forth) and/or at the local, state or regional levels, through such organizations as CompassPoint (CA) and the Community Resource Exchange (NY). Many of these local capacity-building organizations stay abreast of best practices and research on organizational management and development through their association with the Alliance for Nonprofit Management, which provides rigorously review