Earlier this week on Twitter, Idealist.org Founder Ami Dar posted this ominous tweet:
My first thought was: oh no, not another one. Not another nonprofit infrastructure group (those that provide capacity building, technical assistance, consulting, workshops, training, conferences, advocacy and research for the nonprofit sector) on the verge of shutting down. Like many of you, I have a personal connection to Idealist.org because I found my very first full-time nonprofit job on their website. My second thought was: the nonprofit sector needs Idealist. We can’t let it go down like this.
I expect Idealist.org to launch a “Save Idealist” fundraising campaign like so many other nonprofits have done in the past year. A local campaign here in DC that recently achieved major success was “Save WEAVE,” a call to the community to keep WEAVE open so they could continue to provide services to domestic violence victims in the city. But while some of the campaigns to save direct-service programs have been successful, Idealist.org will be the first nonprofit infrastructure organization to launch a public fundraising effort of this sort. (That I know of.) For a non-direct service nonprofit, it’s hard to know what the response will be. As those of us who work in nonprofit associations or capacity building organizations know, it’s much harder to sell a nonprofit that helps other nonprofits than it is to raise money for a nonprofit that helps the poor. Believe me. I did it for over five years. It was tough. The pool of funding sources for non-direct service programs has always been slim, and is only getting slimmer.
Unfortunately, Idealist.org is not the only nonprofit infrastructure organization in financial trouble.
- Last September, the Chronicle of Philanthropy reported that the Council on Foundations had laid off 16% of its staff amidst decreasing attendance at its meetings.
- The Nonprofit Times reported in April 2009 that the Association of Fundraising Professionals had plans to lay off 14% of its staff, despite record conference attendance that year.
- The Council of Nonprofits has also made a round of layoffs, and now seems to have less senior staff than in previous years. Last year, the Council also made the difficult decision to cancel its 2009 Nonprofit Congress.
- The Alliance for Nonprofit Management began making shifts in their operations in late 2008, with an ongoing series of candid and transparent messages from the Board to their members. Like this one: After difficult and thoughtful deliberation, the Board feels that the most responsible action we can take at this time in order to preserve the mission of the Alliance and insure that members continue to have a voice and place to go for support, is to make major reductions in our budget. These reductions have included restructuring the Alliance with a significant reduction in our staff and engaging a management company (Raffa & Associates) on a pro-bono basis, and one part-time interim program manager to manage the day-to-day functioning of the Alliance.
It makes me wonder, once again, what the future holds for nonprofit infrastructure groups. How are they planning to weather a financial storm that doesn’t seem to be letting up? How will organizations change their revenue models, management structures, and program offerings to be sustainable for the nonprofits they are tasked with helping? I’m thinking particularly of nonprofit associations as they gear up for the 2010 conference season. Are groups still moving forward with the traditional conference program model that costs attendees hundreds of dollars in registration fees and travel? Or are more folks getting hip to the idea of hosting “unconferences” like the amazing one I attended in DC called Social Justice Camp? It was free and it was awesome. And better than many of the nonprofit conferences that I paid big money for.
The ongoing financial and programmatic challenges for nonprofit infrastructure groups is what Clay Shirky meant by the “institutional dilemma.” I’m almost through reading his fantastic book, Here Comes Everybody: The Power of Organizing Without Organizations. You should read it, too. In the book, Clay talks about how technology has allowed for global collaboration to happen without the assistance of corporations to manage their work. How groups of individuals can effectively organize themselves for social change in lieu of operating under the umbrella of an established organization. To be sure, Clay’s book isn’t an indictment of traditional organizational models. He’s not saying that self-organizing groups of individuals will completely take over the role of “the institution.” But what he does do is point out the precarious nature of institutions:
In a way, every institution lives in a kind of contradiction: it exists to take advantage of group effort, but some of its resources are drained away by directing that effort. Call this the institutional dillemma – because an institution expends resources to manage resources, there is a gap between what those organizations are capable of in theory and in practice, and the larger the institution, the greater those costs.
What this means is that no matter how much we want Idealist.org or Council on Foundations or Council of Nonprofits or Alliance for Nonprofit Management to stick around, there will always be inherent challenges to what they are able to do for the nonprofit sector in the long-term. As Clay points out:
Running an organization is difficult in and of itself, no matter what its goals. Every transaction it undertakes – every contract, every agreement, every meeting – requires it to expend some limited resource: time, attention, or money. Because of these transaction costs, some sources of value are too costly to take advantage of. As a result, no institution can put all its energies into pursuing its mission; it must expend considerable effort on maintaining discipline and structure, just to keep itself viable. Self preservation of the institution becomes job number one, while its stated goal is relegated to number two or lower, no matter what the mission statement says. The problems inherent in managing these transaction costs are one of the basic constraints shaping institutions of all kinds.
The approach that several infrastructure groups have taken so far – layoffs, program cuts, management changes – seem to have had a positive impact to their financial bottom line, but I’m not sure that it translates into success for their respective missions. Do I want Idealist.org to stick around? Yes, of course. But I’m more concerned with preserving their mission versus their organization.
UPDATE: The Council of Nonprofits says it made the decision to cancel the 2009 Nonprofit Congress not because of financial difficulties, but because it didn’t want to burden it’s members with paying travel and attendance costs for the conference in New Orleans. Instead, they held a 2009 Member Meeting and Lobby Day in Washington, DC. They are now officially “moving away from the Nonprofit Congress.”
What do you think? Will new and better models begin to emerge that will be a win-win-win for nonprofit infrastructure organizations, their members and the nonprofit sector overall? Do you know of any that are bubbling up?
Rosetta- this is one of my favorite posts of yours to date. I’m slowly realizing what an infrastructure nerd I am.
I think you’re spot-on with your question about changing models of infrastructure groups. Unfortunately, I also think that these groups will be slow to change because they tend to be some of the more traditional in the sector. I’m thinking of the thorough study, led by the Nonprofit Quarterly in 2008, which documented the urgent need for infrastructure funding (http://tinyurl.com/qcoe6z). I don’t recall it dealing with the question of alternative models; instead it focuses on preserving the existing one(s). This is the kind of status quo mindset that may require a crisis in order to change.
Thanks Elizabeth! I’ve been an infrastructure nerd for a while now
It actually baffles me how many people have not read the Nonprofit Quarterly’s report, even if their organization was profiled in it! Particularly the piece they put in there about the Council of Nonprofits: “There is widespread agreement among those interviewed for this report that NCN has not yet lived up to its potential.”
Hi Rosetta! As one of the authors of that report, I want to caution that that measure of NCN is now quite old and preceded the current leadership. The states are the immediate emanation point for a lot of the current policy and financial issues that most nonprofits are dealing with in this economic miasma and the state associations, in many cases, are right in the thick of those concerns. NCN seems to me to be a particularly crucial network in that it connects and circulates information about emerging policies, problems and strategies. Look here for more information by and about some of the states and their state associations.
http://www.nonprofitquarterly.org/index.php?option=com_jomcomment&task=trackback&id=1669&opt=com_content
And, Elizabeth, the infrastructure study, which people can access at nonprofitquarterly.org was not focused on the preservation of existing models so much as it was focused on the fact that funding seemed systematically to flow more freely to organizations that served larger and more well off nonprofits and foundations than it did to those entities that served the smaller and mid-size organizations that make up most of the sector. This makes no sense in any number of ways.
I am most struck by the broader applicability of this:
“Do I want Idealist.org to stick around? Yes, of course. But I’m more concerned with preserving their mission versus their organization.” (Rosetta)
and this:
“This is the kind of status quo mindset that may require a crisis in order to change.” (Elizabeth)
Far beyond the context of infrastructure groups, these statements address the prevailing mindset among the majority of existing nonprofit organizations. Consciously or, more likely, not, the continued existence of the organization is presumed and becomes the de facto raison d’etre, at the risk of influencing or even overriding decisions that affect the advancement of mission.
To Elizabeth’s point, I think it’s fair to say that crisis has arrived, in terms of economic conditions and their double-edged impact on both the need for nonprofit services and the funds available to organizations. Months ago, much discussion was focused on the likely acceleration of nonprofit mergers in the interest of streamlining and better addressing need. Yet the reality has not matched that expectation. Instead, the most common reactions on the part of organizations have included those you mentioned — layoffs, budget cuts, compensation freezes and reductions. These actions represent survival, not evolution.
As a human resources management consultant to nonprofit organization, my empathy is certainly with the people involved — noprofit employees — but organizational and job preservation should not be the primary concern.
For-profit businesses can and do often fail and cease to exist in response to shifting demand, resources, and technologies. Their own absolute or relative performance — or lack thereof — also plays a role. At other times, a less drastic result is merger or other significant organizational change. Organizations evolve and new organizations emerge in response. We expect and accept all of this as a reflective of “the market”.
In the same way, nonprofit organizations can and should fail, cease to exist, change, and come into existence over time as a result of the dynamic interaction between need, resources, technologies, and performance. That is evolution. Freer expression thereof, less hindered by self-preserving organizational mindsets, can only result in superior impact and fulfillment of the collective nonprofit mission.
Hi Rosetta,
We at CompassPoint deal with that exact question constantly which in turn moves us to experiment and explore better ways to support nonprofit organizations. In part we are very critical of our own work because pretty much all of us here do NOT see our work as just consulting or training – but part of something bigger. In fact we see ourselves as people working within social justice/change movements – our vehicle or tool being the infrastructure/management support we provide. Having that vision keeps us focused on the “why” we do the work we do (and not focused on just putting on another event, class, conference, program, etc.). I believe (from personal experience) groups like Idealist have the same approach. In a recent discussion I had about the work we do, this statement added clarity to this idea of sustaining organizations “Social movements/change doesn’t happen in a neat 12 month time frame, it requires long term commitment and effort. The sustainability of organizations, groups, and individuals who are committed and positioned to lead and support that change is a valuable component of that movement.”
Also sustainability does not = doing the same thing.
Again, great thought provoking post Rosetta. If you’re ever in the Bay Area please think about coming to visit us!
-Nelson
I would love to come visit you guys at CompassPoint! I like your reminder that “sustainability does not = doing the same thing.” When I see all these groups making layoffs, it seems that they are trying to save money so they can continue business as usual. I would like to see more organizations rolling out new and innovative ways of offering value to the sector. And I think “why” is the most powerful question for infrastructure groups right now.
I really love the insights in this post. I think that the point made above about mission statements moving to the side in the face of self preservation is something that I have struggled with in past fundraising positions as well. You shed light on a particularly interesting subject – how these organizations are dealing with finances, and still maintaining their passion for what they are out in the world to accomplish.
When I left my old nonprofit association, it was because of that type of situation, not enough people attending our events and lots of questions on where to go next. We had lots of events and conferences, many that charged $50+ to entrepreneurs for best practices and networking, things that many other providers on and off line were providing for free and better. A year and a half later, the organization has regrouped, rebranding themselves, co-sponsoring events and conferences with other “rival” organizations and relying on on volunteers with professional experience to help with these events.
I think the future of the non-direct service sector will come in properly assessing their market, which is the people they are needing to serve. Also, engaging people in all sectors to pitch in their professional experience on a volunteer basis as much as possible, until such time comes, if it ever comes again, that we will be able to sustain full-time staff to run this sector.
Speaking as one of the voting delegates to the first Non-Profit Congress, and speaking only for myself, I think that a fundamental strategic error was made when NCNA decided to move away from the voting delegate model to that of being just another non-profit conference.
What I observed was that as a delegate people took their responsibilities to the entire sector seriously and tried to make sure that the concerns of small, middle and large non-profits were addressed. When that approach was abandoned (without input from the delegates) it turned what could have grown into something special over time into just another conference that’s competing with other non-profit conferences. There are plenty of areas where non-profits need to work together for the benefit of all.
Regards,
Bill Huddleston
http://www.cfcfundraising.com
BillHuddleston@verizon.net