Nonprofits, funders looking for community partnerships

By Todd Cohen

[Note: This was written for Triangle Community Foundation.]

DURHAM, N.C. — Fixing local problems can be tough.

Charities that focus on community issues can find their work slow, messy and fragmented. With limited resources, charities face growing competition for funding, as well as rising demand from donors to show and measure their impact.

And because they often focus on a single issue or group of issues, many charities are not positioned to address the underlying and interconnected causes of the broad range of complicated problems in their communities.

The way charities operate, however, is beginning to change. A small but growing number of charities and funders are starting to work together to make a “collective impact” on local problems.

The challenges facing charities and funders working on the issue of community development, and the solutions they are developing to address those challenges, was the focus of a recent meeting of Triangle Donors Forum.

“Nonprofits don’t work in silos,” said Katie Loovis, director of U.S. community partnerships and stakeholder engagement for GlaxoSmithKline, and a panelist at the Donors Forum, which was hosted by Triangle Community Foundation on November 20. Building healthy communities “requires each [nonprofit] working together,” as well as sectors working together, Loovis said.

Moderated by Farad Ali, president and CEO of the North Carolina Institute of Minority Economic Development and a member of the board of directors of Triangle Community Foundation, the Donors Forum was held at the Holton Career and Resource Center in Durham.

Building capacity

Strengthening the organizational capacity of nonprofits is the focus of a “People and Places” initiative Triangle Community Foundation launched this year that focuses on groups working on the issues of community development, youth literacy, land conservation, and the arts.

That initiative grew out of a two-year effort by the Foundation to assess its grantmaking with advice from donors, nonprofits and civic leaders from throughout the region. A key goal was to identify “community benchmarks” the Foundation could use to find ways to make a greater impact with the limited discretionary funds it invests in the community.

As a general funder that is a “proxy for so many donors, and a vast number of nonprofits,” and with “limited resources and a vast region and many microcosms of communities,” the Foundation wanted to find “that sweet spot of funders and nonprofits and volunteers where we start to chip away” at addressing pressing community needs, Lori O’Keefe, the Foundation’s president, told the Donors Forum.

While the Foundation’s community conversation initially focused on finding ways to improve the delivery of services, she said, it eventually shifted to the organizational capacity and infrastructure of nonprofits.

Recognizing the widespread need of local nonprofits to strengthen their operations so they could make a greater impact through the services they deliver, the Foundation decided to make capacity-building the focus of its discretionary grantmaking.

Partnerships key

Alice Lutz, CEO of Triangle Family Services and a panelist at the Donors Forum, said partnerships are critical to the impact of her organization, a 77-year-old agency that focuses on mental health, financial stability and family safety.

“It’s partnerships that make a difference,” she said.

But partnership also are challenging, she said, because “the work doesn’t stop” while staff members responsible for delivering services also are devoting time to building partnerships with funders and other agencies.

Maggie West, program coordinator for the Community Empowerment Fund in Chapel Hill and another panelist, said her organization depends on collaboration and partnerships “more than we depend on funding.”

The Community Empowerment Fund operates with 250 student volunteers from Duke University and the University of North Carolina at Chapel Hill, pairing two students each with individuals who are homeless or at risk of being homeless. In 2015, it plans to add students from North Carolina Central University.

The students work to help each client focus on their goals in the areas of employment, housing and financial security.

“Communities are people that know each other and in relationship to each other can build mobility,” West said.

And while the organization’s volunteers, known as “advocates,” help their clients navigate through courts, housing agencies, health clinics, public-benefits systems and other agencies, “student volunteers are not going to be the experts,” she said. “So we depend on partnerships” with shelters, clinics, housing agencies, workforce development organizations and other groups.

Investing in collaboration

Loovis said many issues in a community are interconnected, and funders struggle to “change the way we fund and foster more collaboration” to address those issues.

“As the funding community, sometimes we get it all wrong,” she said. “The very things we have funded to create sometimes exacerbate the very things we don’t want to see.”

While they may “know fostering a healthy community requires addressing a broader array of factors,” she said, funders may opt to fund individual nonprofits, in effect forcing nonprofits to compete with one another for funding rather than encouraging them to work together.

Funders also tend to invest in short-term programs, even though fixing complex problems can take longer.

“How do we fund things and recognize this isn’t a one-year deal, change the funding stream and realize this is a long-term approach,” she said.

And while funders “want nonprofits to show outcomes,” she said, funders may not be providing the funding nonprofits need to evaluate their work.

GlaxoSmithKline wants to change the way it funds nonprofits, and is working with Triangle Community Foundation to “figure out how not just to fund one nonprofit but groups working together,” possibly with “more than one business funder at the table,” she said.

“If we do want healthy communities, this is complicated work,” she said, “and we do all have some room to improve.”

Incentives for partnerships

Bob Johnston, who is founder and executive director of Global Vaccines, a nonprofit in Morrisville, and attended the Donors Forum, suggested that philanthropic funders that want to invest in solutions to complex community problems might take the approach of agencies like the National Institutes of Health that fund scientific research.

His own university labs once operated like “an island,” said Johnston, a former professor of microbiology at North Carolina State University and former professor of microbiology and immunology at the School of Medicine at the University of North Carolina at Chapel Hill.

“You wrote a grant, got funding, and there was competition, and actually drives a lot of innovation,” he said. “But as science has moved forward, the goals are too big for individual labs.”

So the NIH now issues “calls for proposals” that spell out a big goal, knowing that “no one entity can satisfy that goal,” said Johnston, who created a donor advised fund at Triangle Community Foundation.

It then becomes “incumbent on people applying for funding to assemble the consortia that are important to whatever that goal is,” he said.

So if philanthropic funders want to set an ambitious goal for addressing a community problem, they can issue a call for proposals that will give community groups “an incentive to organize themselves” to apply for funding, he said, “Having it come from the ground up could be a real advance. It would be up to individual people and agencies to come up with consortia and the groups that can do it. Your decision the would be who can do it best.”

‘Coopertition’

Lutz said nonprofits working in the area of human services have “little room for mistakes.”

While nonprofits ought to be able to learn from and build on initiatives that don’t work, she said, “funders move on to another organization.”

The challenge is to find ways to pilot new programs, “identify mistakes, and then turn to funders and in partnership move through that system,” she said.

What is needed, she said, is “coopertition,” or a combination of cooperation and competition.

Loovis said there is a “push-pull” between funders and nonprofits.

“In some ways, nonprofits are ahead of us,” she said. “In some ways, funders are a little ahead of nonprofits.”

When GlaxoSmithKline decided to pursue a strategy known as “collective impact,” she said, it wanted to invest $500,000 each in tackling community problems in two communities in other parts of the U.S.

It assumed local nonprofits in each community were ready for a collective impact strategy “and we would come in and work and learn from them,” she said,

One of the communities already had a strong funding community, largely because of several big funders, she said, but that philanthropic infrastructure was lacking in the other community “and we really struggled as a funder.”

So instead of making a collective impact investment in the second community, GlaxoSmithKline shifted gears and is considering making a planning grant to pave way for a collective impact initiative.

Collaboration and mergers

Haywood Holderness, who is pastor emeritus at Westminster Presbyterian Church in Durham and attended the Donors Forum, said the Triangle is “ripe for more collaboration and mergers among nonprofits.”

The number of nonprofits in Durham, for example, has soared and now is many times the state average on a per-capita basis, yet many nonprofits operate in silos, he said.

But with the Baby Boomer generation of nonprofit founders retiring, the time is ideal for funders “to talk to nonprofits about more collaboration or even mergers,” he said. “You guys can make that happen.”

Steve Toler, who is a public relations and communications consultant, former vice president for public affairs in North Carolina for Verizon, and attended the Donors Forum, said the business community was “light years ahead of nonprofits” in mergers and acquisitions.

“We’re not seeing that” in the nonprofit sector, he said.

Lutz said mergers require mediators and investment from funders to provide incentives to nonprofits to talk about merging and give them the time needed to pursue merger conversations while continuing to serve clients.

As part of its People and Places initiative, Triangle Community Foundation is working to better understand and address the challenges of building the capacity of nonprofits to address pressing community issues.

“We know all our donors are not ready to fund that capacity-building infrastructure…yet,” O’Keefe said.

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