Imagine a world without nonprofits. Nonprofits are the lifeblood of many communities, serving to fill a hole left by business and the public sector. Most of us here know this. That’s why we’re with the Talk for Change toastmaster’s club.
How many nonprofits are there? How many are big or small? According to a 2010 Urban Institute report, nearly 45% of the 1.6 billion registered nonprofits – that’s 714,000 of them – have annual budgets of less than $25K. Seventy-four percent of all public charities have annual expenses less than $500K. Not surprisingly, most nonprofits struggle to stay afloat.
I didn’t understand the extent to which small nonprofits struggled until my partner became the executive director of one that served South Asian survivors of domestic violence. With an annual budget of $250K, and a small staff of five and many volunteers, the organization had trouble getting the scale it needed to make its infrastructure run smoothly and efficiently. In fact, I’d find myself driving my partner to the store to get supplies and toilet paper, because she was the only one permitted to have a purchase card. No doubt her time could have been much better spent directing the organization than running errands!
Experiencing and observing these types of issues in many of the small nonprofits I volunteered with, I became very interested in using my management, technology, and organization development experience to research and think about ways to alleviate the infrastructure issues experienced by small nonprofits.
A growing number of reports, such as recent report from the Management Assistance Group funded by the Meyers Foundation, have brought attention to the lack of infrastructure to support nonprofits. Unfortunately, these reports have focused on nonprofits that have annual budgets of $1M to $4M or more, nonprofits that already have a considerable amount of resources to work with. Many foundations and management support organizations have suggested smaller nonprofits merge to address the infrastructure problem, but for many reasons, mergers are not always the most appropriate answer. I would like to suggest that improved collaboration and collaboration support could be what makes a difference to many small nonprofits.
I propose four strategies for collaboration that offer a lot of promise in improving nonprofit infrastructure:
- Collaboration through life cycle stage,
- Collaboration through programming,
- Collaboration through constituencies, and
- Collaboration through geography.
Let’s take a look at the first strategy: collaboration through life cycle stage. Susan Kenny Stevens in her book, Nonprofit Lifecycles, outlines seven typical stages of a nonprofit: idea, start-up, growth, maturity, decline, turnaround, and terminal. Each stage has characteristic patterns of behavior and capacities. Nonprofits that have similar budgets or staff size are often at the same lifecycle stage.
Nonprofits who are at the same lifecycle stage have an opportunity to collaborate by sharing their infrastructure systems – a human resources manager, an IT system, or an accountant. Consider this: if 20 organizations pay $500/month for a total of $6K a year for accounting services, then we would have $120K/year to hire an accountant, a bookkeeper, and cover overhead costs for those 20 organizations. Compared to the $12-24K per year that many nonprofit organizations are paying, $6K would represent a considerable savings.
The second collaboration strategy is collaboration through programming. Nonprofits with similar programmatic strategies or programmatic functions can also share infrastructure. Most nonprofits employ one of four programmatic strategies – direct services, public advocacy, public education, and/or community organizing. The skill sets staff and volunteers need to succeed in each of these areas are fairly similar, and conceivably, nonprofit organizations could collaborate on training materials, volunteer manuals, or policy manuals.
Some nonprofits, typically management support or technical assistance organizations, also have similar functions. Some provide information technology services like NPower; others provide media and communications. A simple example, but consider the opportunities to share resources and reduce costs if organizations that produced media campaigns shared a film or sound recording studio.
A third collaboration strategy is collaboration through constituency or identity base. Nonprofits that work with the same constituency have the opportunity to create a web of programmatic services that meet a particular community’s needs through various stages of community development. They can also share infrastructure resources.
If the nonprofits reside in the same location, they have an opportunity to share equipment for similar services they provide. A great example of this in the Pacific Northwest: three organizations that work with immigrants pooled their resources to purchase 100 translation headsets for $10K. They share these headsets amongst each other for their various training programs. If the organizations had purchased them individually, they would have paid considerably more.
If the nonprofits don’t reside in the same location, they can share services that don’t rely on a physical location. For example, 20 organizations across the country that all need their written and audio materials translated into Spanish or Mandarin, could together hire someone to perform fulltime written and audio translation for all their public education materials.
The last collaboration strategy is collaboration through location or geography. Nonprofits that work in the same community can, for example, share infrastructure such as office space, kitchen or training facilities, and IT or phone service. The growing number of nonprofit centers is a good example of this strategy.
The four strategies I’ve outlined – collaboration through lifecycle stage, through program, through constituency, and through geography – I believe can make a significant difference for small nonprofits and their struggle to stay afloat. I’m interested also in applying these strategies not just across nonprofits, but also across all three sectors – nonprofit, business, and government. Studying and exploring these strategies has been the nexus of my work, and I look forward to continuing to develop these creative collaborations.