Nonprofits Need Faith in Themselves

by Todd Cohen

Giving USA has released its annual estimates on charitable giving in the U.S., and the picture is bleak.

While overall giving grew to $290.89 billion in 2010, up 2.1 percent in inflation-adjusted dollars, that growth represents only a small step on the path to recovery from a combined loss of 13 percent in 2008 and 2009.

And if giving keeps growing at the same pace as in 2010, it could take five to six more years “just to return to the level of giving” before the economy collapsed in 2008, says Patrick Rooney, executive director of the Center on Philanthropy at Indiana University, research partner for the Giving USA Foundation.

An even grimmer picture emerges from an analysis of the Giving USA data by Ruth McCambridge and Rick Cohen of The Nonprofit Quarterly.

They see “not only a crisis of declining charitable giving reaching human services or social-safety-net groups, but a class divide where the groups that do well in charitable solicitations are those with connections, with the social-class interrelationships that give them automatic access.”

Charitable giving for human services, they say, “is very much the province of the less-moneyed donors, the payroll-deduction donors, the people who volunteer at the shelter or food pantry or clinic because they know the tangible importance of those institutions to their communities.”

Not counting giving to agencies in the U.S. to support relief efforts in Haiti, for example, overall giving to human services in 2010 took the biggest hit among all nonprofit subsectors, falling 5.6 percent in inflation-adjusted dollars, The Nonprofit Quarterly says.

In comparison, it says, inflation-adjusted giving to education and to arts, culture and humanities – subsectors with big institutions that have fundraising prowess and “personal connections to the affluent sectors of our economy” – grew 5.2 percent and 5.7 percent, respectively.

Further reflecting the class schism in giving, The Nonprofit Quarterly says, charitable bequests in 2010 grew 16.9 percent in inflation-adjusted dollars, and giving to foundations, fueled by giving to family foundations, grew 0.2 percent, compared to a 1.9 percent drop in giving by foundations.

There is “class divide in our society,” the Quarterly says, “and it is reflected in a class divide in charitable giving.”

What does this all mean for nonprofits, most of which are small, community-based organizations?

It means nonprofits need to get over it.

Nonprofits are the unsung heroes of our society, and they face huge challenges in building and sustaining their organizations and effectively serving their clients and communities.

So they need to stop blaming forces beyond their control for their problems, get their act together, and start taking charge of their business.

They need to move beyond their sense of helplessness and entitlement, think for themselves and take responsibility for their condition and their survival.

They need to push their board members to start fulfilling their role, setting a vision for the organization, making sure the staff gets the resources it needs, and providing their own support and connections to help raise money.

Nonprofits need to talk candidly with individual donors and foundations about their needs, not pretend all is well when it clearly is not, and push for operating support instead of taking on new programs – and costs – simply because they seem more likely to appeal to funders blind to nonprofits operating needs.

Nonprofits need to be more resourceful about strengthening their organizations and helping their staff and boards do a better job, while being a lot more skeptical before investing their scarce dollars in mediocre consultants and trade groups that make big promises but fail to deliver on them.

Nonprofits need to engage the kinds of donors, board members and volunteers who genuinely want to improve the organization so it can better serve its clients and community, and steer clear of dabblers and hangers-on who see their contribution to a nonprofit simply as a ticket to social prestige and connections.

Nonprofits need to be more forceful and effective advocates for public policies that recognize the indispensable role charity plays, and that provide incentives to encourage greater investment in a sector that takes on the symptoms and causes of urgent social and global problems beyond the mission or focus either of government or corporations.

The class divide in America and in the charitable marketplace is a fact of life, as is the deeply-wounded economy, and neither are likely to change any time soon, if ever.

Instead of bemoaning inequities in the way charitable resources are distributed, nonprofits need to have faith in themselves.

They represent, after all, a sector of society that characterizes itself as independent.

So nonprofits should embrace their independence, trust their own experience and judgment, tap into and build on their value as a community asset, and engage supporters and partners who truly want and are able to help them learn, lead and grow so they can more effectively serve people and places in need.

Todd Cohen is editor and publisher of Philanthropy Journal; reprinted with permission.