Alicia Philipp: Nonprofits adjusting to economic recession

alicia-photoBy Guest Columnist ALICIA PHILIPP, president of the Community Foundation of Greater Atlanta

Some call it the new normal. Others call it a sea change. Whatever you call it, it’s clear that all organizations, whether for-profit or nonprofit, are looking at new ways to do business in today’s world.

In the nonprofit sector, organizations are working with a decrease in dollars paired with an increase in demand. But even as this shift in balance makes work challenging, it’s also critical to remember that in the nonprofit field, the success of the clients we serve depends on a wide network of organizations.

The issues facing today’s families don’t occur in isolation – if income security is a challenge, it’s likely that financial literacy or child care could be needed as well. A nonprofit may focus on one area of a client’s needs and then consider working closely with another nonprofit to transition a client who needs their service as well. This is what today’s individuals and families need – to be helped along a continuum of care.

Nonprofits exist for one reason – to serve the needs of clients. Everything else is secondary. So if there is an opportunity to work with another nonprofit focused on a similar area, is it seen as competition or collaboration?

Earlier this year the Georgia Center for Nonprofits conducted a survey of its members and shared some startling highlights:

• 58 percent of all respondents have less than 3 months in reserves;

• The biggest declines in revenues are in corporate donations and sponsorships;

• 28 percent had layoffs in 2008, and 30 percent expect layoffs in 2009;

• 58 percent have decreased program related spending;

• Facing an increase in demand, 38 percent feel they can sustain those demands for six months or less.

At the same time, several nonprofits are considering new approaches to help meet the increase in service demands and decrease in revenue:

• 37 percent would consider merging with another organization;

• 63 percent would collaboratively market with other groups;

• 47 percent would consider outsourcing their back office.

That’s exactly the kind of thinking that can help nonprofits during such challenging times. We can’t assume that we have to operate in the same traditional ways we have before.

Just a few months ago, the Community Foundation awarded a grant to several organizations serving girls in the region to encourage them to collaborate. Several of them had known of each other since they were working in the same space, but they hadn’t met together before or viewed the other as a resource. Now these girls’ groups have decided to pursue a combined marketing campaign focused on the issues facing today’s girls and are on the verge of interviewing several firms to do the work.

Recently Jewish Family and Career Services (JCFS) partnered with the Gateway Center to transition their Project Connect program focused on the homeless population. Project Connect provides intensive case management for the chronically homeless. The program has been fully funded since 1988 through a variety of measures and is completely grant driven.

The Gateway Center provides a full spectrum of services for the homeless population in Atlanta partnering with several other agencies to provide employment services, substance abuse programs, food services and more. Relocating Project Connect to the Gateway Center allowed JFCS to greatly reduce overhead from running a separate office, and it allowed the Gateway Center to pull in a fully funded program.

But the best part about this isn’t just the benefit to the organizations – it’s the benefit to the clients. This innovative partnership means more homeless individuals getting the full care they need.

While nonprofits are being challenged by the increased demand for services from individuals and families facing unemployment, foreclosures and homelessness, there’s a group on the front-lines of this crisis who are suffering as well.

Staff members and volunteers at direct service agencies have shared stories of overwhelming need and frustration as they struggle with the stress and trauma of how to cope while working in the trenches.

Families First recognized this need and took the opportunity to provide their expertise to help strengthen the sector. Just a few weeks ago, Families First worked with United Way of Metropolitan Atlanta and the Community Foundation to create the “Help the Helpers” program providing counseling services to local nonprofits, service providers and volunteers.

At the Community Foundation we’re working differently as well. Like many others, we’ve had to make internal cuts including eliminating staff positions, reducing benefits and limiting professional development.

But we also took the opportunity to rethink the ways we support nonprofits through our multiple competitive grantmaking programs.

We expanded the range of issues we support, and our two priority areas are now general operating support and nonprofit effectiveness. This allows us to do a better job of strengthening nonprofits in our region so they can continue to serve more people in need.

These are challenging times. Philanthropists are stretching themselves to give more. Nonprofits are stretching themselves to think differently. This kind of work is never easy, but it is an opportunity.

The beauty of philanthropy has always been about passionate people working with new approaches and flexible and creative ideas. This is not new for us, and we will come out of this a stronger sector and a stronger region.

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