Better communications seen as critical for nonprofits

Nonprofits are doing a poor job telling their story and need to improve their communications if they expect to survive in the face of serious threats to the social sector, a new report says.

Nonprofits believe government, the media and the general public do not understand the distinct values that make the social sector indispensable to society, and nonprofits also believe they need to communicate more effectively about their role and impact, says the report by the Listening Post Project of the Johns Hopkins Center for Civil Society Studies.

“Nonprofits are under assault today as perhaps never before, with consequences that could be profound for the future of these organizations and for those they serve, says the report, “What do nonprofits stand for?”

Half of over 750 nonprofits surveyed believe that “neither the general pubic nor government officials have a solid grasp of the nonprofit sector’s special qualities,” while over a third of survey respondents believe both the media and organizational funders are missing that information.

And nearly a quarter of respondents believe current and potential clients, customers, patrons and members are missing that information, says the report.

Sixty-two percent of respondents say the nonprofit sector does a poor job of articulating its special qualities to people outside the sector.

Nearly all nonprofits surveyed say improving their communications is important.

They also say undertaking a “serious, concerted and coordinated campaign to promote understanding of their core values” will require access to a range of resources.

Seventy percent say they need more resources for communications, 66 percent say they need to better understand how to measure their public benefit, and 65 percent say they need to better understand how to articulate their public benefit.

Better communication by nonprofits is particularly important in the face of an increasingly competitive marketplace that has created pressures that have pulled nonprofits “away from their historical modes of operation and from widespread widespread public assumptions about how nonprofits are supposed to operate,” the report says.

That volatile environment includes proposals to cap the federal tax deduction for charitable contributions as a common feature of budget-balancing measures “from both ends of the political spectrum,” the report says.

It also includes the imposition by a growing number of state and local governments of new taxes and other fees on nonprofits, and shifts in government payment methods that give advantages to for-profit businesses and have led to “significant loss of market share for nonprofits in a number of traditional nonprofit fields of activity.”

Nonprofits are “caught in a force field with powerful impulses pulling them simultaneously in different directions,” says the report, citing research by Lester Salamon, a co-author of the report and director the Center for Civil Society Studies.

Those impulses are pulling them “toward their voluntaristic past, toward greater professionalism, into expanded civic activism, and into deeper engagement with commercialism and the market,” the report says.

“While this movement toward a more commercial model has given nonprofits access to new funding streams and greater emphasis on efficiency, the resulting moving away from the most deeply held public conceptions of the sector has occasioned a series of challenges, including a key erosion of public trust,” it says.

And given the “enormous diversity of the nonprofit sector,” forging a consensus about the core values of the sector “poses an enormous challenge,” it says.

It is time for nonprofits, the Center for Civil Society Studies says, to “renew their value commitments and to develop the tools needed to communicate those values to the sector’s stakeholders in government, the public, and within the sector itself.”

Todd Cohen

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Long-term strategy seen as key to effective advocacy

To be effective, nonprofit advocates need to gear themselves for a long haul, be methodical, understand what drives public officials, build coalitions for the short term, and show strong leadership, a new study says.

Effective advocacy has become increasingly urgent in the face of a federal government committed to reducing the budget deficit by cutting spending, a weak economic recovery that “continues to leave millions of people without sufficient support,” a “deeply divided partisan Washington, D.C.,” and the landmark Citizens United decision by the U.S. Supreme Court in 2010 that “lowered the barriers to participating in the political area for business and trade unions,” says the study by Independent Sector.

“Nonprofits face great challenges getting their voices heard,” Independent Sector says in a statement.

The study, “Beyond the Cause: The Art and Science of Successful Advocacy,” is based on over 100 interviews, three surveys, three case studies, a review of existing literature on advocacy and lobbying by charities, and research on publicly available information about 528 organizations’ engagement in sector-wide public policy issues.

The study found five strategic approaches were “common ingredients” in successful advocacy both for corporate and nonprofit lobbying groups:

* Sustain a “laser-like” focus on long-term goals.

It is common among the most successful groups engaged in advocacy in Washington, D.C., to set goals over 10, 20 or 25 years, the study says.

“Little can be accomplished in a year” unless there are extenuating circumstances, like a national crisis, or if years of planning have taken place and a chance opportunity is seized, it says.

* Prioritize building the elements for successful campaigns.

Successful advocates “constantly invest in relationships with public officials, deepening their understanding of the issues and of the legislative process,” the study says.

Those “building phases” include conducting research, developing policy solutions, building relationships with potential allies, testing key messages with targeting audiences, building out grassroots and “grass-tops” contacts, and “deeply understanding the priorities of public officials,” the study says.

That work is “time consuming, expensive, ongoing, and must be conducted by an organization with the ability to maintain the knowledge and relationships garnered throughout the process,” it says.

The most successful advocates, it says, were as active during the building phase as they were during the campaign phase.

* Consider the motivation of public officials.

Building relationships with public officials takes time, the study says, but “few investments are more valuable to achieving success in the public policy arena.”

Successful advocates, it says, invest a lot of time “in understanding the policy environment and the players, including a thorough knowledge of public officials’ backgrounds, family histories, connections, and the priorities of their constituents.”

* Galvanize coalitions to achieve short-term results.

Coalitions can help aggregate “diverse voices, skills sets and other assets necessary for advocacy,” the study says.

While successful organizations did not always use coalitions as their only vehicle for advancing their cause, it says, coalitions that were successful “tended to form around a specific issue at a given moment in time and disband once their goal had been achieved or retool for the next issue.”

Key to effective coalitions, it says, are “strong leadership, a shared vision, clear decision-making structures, and members who brought complementary assets to the table and who put some ‘skin in the game.'”

* Ensure strong, high-integrity leadership.

Successful advocacy groups are headed by individuals with “high integrity and transparency,” a reputation for “being an honest broker of information,” relationships that “reflect a level of trust between the leader” and colleagues and target audiences, and the “ability to articulate a compelling vision and mobilize people around it,” the study says.

Still, despite their successes, many organizations engaged in advocacy efforts that were “duplicative, uncoordinated, and did not maximize their combined assets,” the study says.

And in the face of escalating sector-wide challenges, it says, the sector should develop “shared, long-term goals,” increase the “number and depth” of relationships with a broader range of key public officials, improve coordination among organizations, and increase the “visibility and clout of the sector, particularly with government officials.”

The study calls for “strong leadership to organize the sector around a common agenda.”

With Congress set to look more closely at the charitable sector through tax reform in 2013, it says, the nonprofit and philanthropic sector should “align its efforts by creating a joint strategy that will enable organizations to better serve the growing needs of American communities.”

Todd Cohen

Nonprofits urged to spur new industrial revolution

By Todd Cohen

RESEARCH TRIANGLE PARK, N.C. — The earth is dying, choking on its own pollution, and while the European Union has embarked on an ambitious “Third Industrial Revolution” fueled by green energy and networked digital technology, the human species is running out of time.

Nonprofits and other civil-sector players should convene business, government and philanthropy to talk about how to spark that new economic model and “biosphere consciousness” in the U.S.

That was the message that Jeremy Rifkin, a futurist and adviser to the European Union and Germany, delivered this month to 650 people attending the annual conference of the North Carolina Center for Nonprofits.

The civil sector represents a new “commons,” Rifkin said. “That’s where we create social capital, where we create our stories.’

And while that social sector has been surging in the wake of the collapse of the capital markets four years ago, and represents the fastest-growing employment sector, nonprofits also represent a sector that is “parasitic,” relying on support from government and philanthropy, he said.

But the new economy that Rifkin said has been taking off in Europe, particularly in Germany, will create new types of jobs and institutions built on clean energy and collaboration that will result in continuing growth of nonprofits and other social-benefit organizations.

The world, Rifkin said, is in the midst of an “epic-making global economic crisis” that has given rises to a “species crisis” that could mean the end of human life.

“Our species is in trouble,” he said.

The market crash four years ago simply marked the “aftershock” of an “economic earthquake” that exploded 60 days earlier when oil hit its peak price on world markets, sending prices throughout the supply chain “through the roof” and shutting down purchasing power throughout the world, he said.

“We have reached the end game,” he said.

And despite modest recovery in recent years, oil prices surged again in the first quarter of this year, and “purchasing power is shutting down all over,” he said. “We are in a second downturn.”

Compounding that economic crisis is a second crisis, with pollution from the industrial revolutions of the 19th and 20th centuries having created a crisis that poses a grave threat to our species.

“Climate change is much worse than we are being told,” Rifkin said.

“Our science models are now showing we are in the sixth-greatest extinction event on this planet,” said Rifkin, who is 67. ” We could lose upwards of 70 percent of all life by the time little kids are my age. We’re asleep.”

The new industrial revolution, like the two before it, is occurring because humans are changing “energy regimes” and will require “new communications systems,”  he said.

Green energies, distributed with the help of the Internet, will produce a new economy that is “organized collaboratively” and “scales laterally.”

Unlike centralized sources of energy like coal, oil, gas and shale gas that are found in only a few places and require “huge military investment” to secure, renewable energies like solar, wind, geothermal, forestry waste, tides and garbage can be found in “our backyard” and are adequate to “provide for our species,” Rifkin said.

The third industrial revolution, to which the European Union has committed itself, will be built on “five pillars,” he said.

Those include generating one-third of all energy from renewable sources by 2020; decentralized collection of that energy, mainly from green buildings and businesses that will function as “micro-power” plants; storing that energy; using the Internet to create a “nervous system” for distributing that energy by converting energy transmission lines to a “smart grid;” and plugging in our cars, buses and trucks, creating electric vehicles and transportation.

Building the infrastructure for that revolution will result in a massive creation of jobs for 40 years, Rifkin said.

It also will result in new roles for business and nonprofit organizations, and new jobs in the social sector.

Power and utility companies will “continually decrease production of centralized power,” Rifkin said. “They’ll make money by selling as little of their own energy as they can.”

That change will require “shared savings agreements” and intermediaries that will broker the sale of power from coops and other micro-producers, including individuals, to the power companies.

The new economy will consist of “distributed capitalism,” based on a decentralized infrastructure.

And anyone will be able to use the internet to buy and sell power and a broad range of products and services, using the web for their marketing and distribution.

“This is power to the people,” Rifkin said. “Peer to peer is power. We are moving from an industrial era to a collaborative era.”

That shift also reflects the move “from ownership to access,” he said.

Still, he said, “we’re really racing against the clock.”

And the U.S. has failed to commit itself to the new economy.

“We have got to change consciousness,” he said. “We have to move from geopolitics to biosphere consciousness.”

Nonprofit leaders in North Carolina should create a task force that includes representatives from business, civil society and government to “talk about how to set up this infrastructure,” he said.

“It will start in the civil society,” he said. “You create social capital. You start the conversation. You bring the parties together. You can do this.”

Nonprofit sector ‘in great hands’

Fiscal discipline, organizational flexibility and innovation, and a commitment to critical services and the nurturing of future leaders mark the work of the most effective nonprofit leaders, a new report says.

“It seems the sector is always concerned about the next generation of leaders,” The NonProfit Times says in its 15th annual NPT Power & Influence Top 50. “It appears the sector is in great hands.”

Unlike government, which is “heaping more and more responsibility on the sector as it abandons its responsibilities,” the newspaper says, “these executives have balanced budgets. ”

Their nonprofits “continue to answer the call in times of crisis,” it says, “and have nurtured their core truths, found a few more and are working to improve life across the globe.”

Fifteen years ago, the push in the sector was for “institutionalization, getting bigger and strong,” while today the key is “flexibility,” it says.

“Many of the leaders at the largest organizations were late to realize the transition from all work and no play for the staff was eroding to a more balanced lifestyle,” it says. “That is true, too, for volunteers.”

And while “technology was going to save us all,” and has facilitated the ability to not be in the office,” the newspaper says, “it has ushered in the 24-hour work cycle.”

Today, there is “little time for the big idea to germinate and grow to scale, which

would frustrate the leaders 15 years ago,” it says.

An “eclectic mix of young and old,” it says, the sector must continue “to nurture talent as the Baby Boomers approach retirement.”

Today’s leaders, it says, “have found the way to innovate and manage through these evolving structures.”

Nonprofits urged to do better at growing leaders

By Todd Cohen

The nonprofit sector faces a crisis in leadership, and needs to be more systematic in developing a pipeline of new leaders, a new survey says.

Studies in recent years have forecast a mass exodus of executive directors as a result of retirement, burnout and lack of support from boards.

And The Bridgespan Group estimates nonprofits will need to hire an additional 640,000 senior executives by 2016.

A new Bridgespan survey says nonprofits recognize they face leadership gaps but are not sure how to address them.

Nonprofits should pay more attention to leadership development and succession planning, Bridgespan says.

The biggest obstacle to better leadership development “may be the behavior of leaders,” it says.

“Many nonprofit leaders (including nonprofit boards) confront the question of leadership development only when faced with a succession crisis,” it says. “And by then it may be too late.”

Among over 225 leaders responding to the new Bridgespan survey, nearly two-thirds disagreed with the statement that their organization is “highly effective in developing a strong internal and external pipeline of future leaders.”

Bridgespan also has produced a guide, known as “Plan A: How Successful Nonprofits Develop Their Future Leaders,” that is designed to treat leadership development as a “proactive and systematic investment in building a pipeline of leaders within an organization, so that when transitions are necessary, leaders at all levels are ready to answer the call.”

The guide offers a three-year “road map” that spells out an organization’s leadership needs, identifies future leaders, and suggests five interconnected strategies to build leadership.

Engaging senior leaders is a key strategy, with most respondents to the survey, for example, saying their organization’s CEO is “actively engaged in building a strong pipeline of leadership candidates,” but a majority also saying senior leaders “aren’t held accountable for their development efforts.”

To build leaders for the long-term, Bridgespan says, the CEO “must serve as the de-facto chief talent officer,” signalling the importance of leadership development, setting expectations for the team, and putting “the process in motion by first developing the people who report directly to her and then asking them to do the same for their teams.”

By holding herself and others accountable for results, Bridgespan says, “she communicates her commitment to the rest of the organization.”

A systematic development effort, it says, starts with “an understanding of the future leadership capabilities required to achieve the organization’s strategy.”

Yet only 39 percent of survey respondents say they understand the leadership capacity their organization will need to three to five years to achieve its strategic goals.

Leaders grow mainly through “well-designed on-the-job experiences,” Bridgespan says.

Yet while many nonprofits offer their staff members “stretch” opportunities, it says, the most successful groups are “systematic” about leadership development, “consciously building the right skills in the right people over time.”

While doing that effectively requires a “clear understanding of the development needs of each individual,” Bridgespan says, only 29 percent of leaders surveyed say potential leaders have development plans in place.

Internal promotions are not always enough develop future leaders, even at the best-prepared organizations, Bridgespan says.

And while its data show that organizations are relatively strong in external hiring, hiring new leaders represents just the first step.

And while it is critical to make sure the first few months on the job are planned carefully so new leaders can succeed, Bridgespan says, 40 percent of leaders surveyed disagreed that they bring “on-board and successfully integrate external leadership hires.”

Finally, it says, it is critical to monitor and improve the process of developing leaders.

Successful nonprofits gather data to ensure they are doing what they set out to do, making progress toward their leadership-development goals, and are continuously adjusting their process based on what they learn.

Yet the survey underscores a great need to improve that tracking and learning, Bridgespan says, with only 29 percent of leaders surveyed saying they regularly collect data to evaluate their progress and understand which leadership-development practices and supports are most  effective.

To be effective in developing leaders,  Bridgespan says, nonprofits should start “with the basics” and improve over time.

New source for nonprofit news, services

Friends,

After 21 years of reporting on the charitable world, I have officially launched Philanthropy North Carolina, offering news and media services for nonprofits.

I also have left the Philanthropy Journal, a publication I edited since founding it in 1993.

I left because the Institute for Nonprofits at North Carolina State University, PJ’s home since January 2010, eliminated my job, saying it wants to take PJ in a different direction. A second position at PJ also was eliminated, and the remaining two PJ staffers quit.

Through Philanthropy North Carolina, at www.philnc.org, I will continue to report on nonprofits, foundations, corporate giving, individual philanthropy, fundraising, and trends and best practices in the charitable world.

And I will be providing writing and advisory services for the sector.

I also will continue to write about nonprofits and philanthropy in my regular columns in the Business Journals in the Triangle, Triad and Charlotte areas of North Carolina, and for The NonProfit Times.

So please visit Philanthropy North Carolina, sign up for my free newsletter and RSS feed, send news when you have it, and keep me in mind for writing or advisory work you may need at your organization.

Details about the services I am offering can be found on the Philanthropy North Carolina website.

This is an extraordinary time for charitable world.

The economy has slammed nonprofits and funders alike, and the future is uncertain, if not grim, to say the least.

But tough times also represent an opportunity for change and innovation, and for getting back to basics.

I look forward to continue reporting on the important work all of you do, and working with you to advance our collective mission of serving people and places in need.

Todd Cohen

Giving inches up; recovery from plunge slow

Charitable giving in the U.S. grew slightly in 2011, regaining some of its losses from the collapse of the economy in 2008 but posting a two-year pace that marks the second-slowest post-recession recovery since 1971, a new report says.

After adjusting for inflation, giving grew 0.9 percent to $298.42 billion from a revised estimate of $268.91 billion in 2010, says Giving USA, a report from the Giving USA Foundation and its research partner, the Center on Philanthropy at Indiana University.

In 2010 and 2011, giving grew by an average rate of 1.1 percent, compared to an average of 2.6 percent, after adjusted for inflation, in the two-year period after each recession over the past 40 years, the report says.

Individuals accounted for 88 percent of all giving, with living individuals accounting for 73 percent total giving, and bequests and family foundations accounting for 15 percent.

Giving by living individuals grew to $217.79 billion, an increase of 0.8 percent after adjusting for inflation.

Individual giving as a share of disposable personal income was flat at 1.9 percent in 2011, the same as 2009 and 2010, but far below the 2005 high of 2.4 percent.

Corporate giving totaled $14.55 billion, down 3.1 percent from 2010 after adjusting for inflation, and represented 5 percent of total giving.

Corporate pre-tax profits, traditionally a key factor in corporate donation levels, grew 4.2 percent, compared to 25 percent in 2010, the report says.

Between 1971 and 2011, giving by companies grew more slowly than the average inflation rate, with donations by U.S. companies growing 3.1 percent a year, on average, during the period, compared to inflation that averaged 4.4 percent a year for the period.

“Corporate generosity is real, and the nation’s charities would certainly feel its absence should the contributions go away,” Jim Yunker, chair of the Giving USA Foundation, says in a statement. “However, at a year-in, year-out 5 percent-sized slice of the giving pie, pragmatic nonprofits should consider additional potential funding sources when planning their appeals.”

The report calculates total giving by roughly 117 million households in the U.S., 12.4 million corporations that claim charitable donations, an estimated 99,000 estates, and about 76,000 foundations.

Those donations go to about 1.1million charities registered with the IRS, plus at least 222,000 religious organizations.

Gifts by bequests totaled an estimated $24.41 billion in 2011, up 8.8 percent from 2010 after adjusting for inflation, and represented 8 percent of total giving.

Giving by foundations totaled $41.67 billion, up 8.8 percent after adjusting for inflation, and represented 14 percent of total giving.

Religious groups received $95.88 million, down 4.7 percent when adjusted for inflation, and accounted for 32 percent of all giving, the most of any sector.

That represented the second straight year of lower giving to religious groups, the report says, citing declines in church membership and attendance, especially among mainline Protestant denominations, as well as the changing economic climate.

Those declines coincide with average population growth in the U.S. of 1 percent a year, on average, the report says.

“Any charity that is heavily dependent on its members for the majority of its annual budget needs to be cognizant of issues that could affect growth, commitment and donations,” Thomas W. Mesaros, chair of the Giving Institute, the group that formed the Giving USA Foundation, says in a statement.

Giving to human-services totaled $35.39 billion, down 0.6 percent after adjusting for inflation, and represented 12 percent of overall charitable donations.

Still, giving to human services was the third-highest ever, trailing only 2008 and 2010, the report says, adding that human-services giving typically is strong during times of perceived need.

“It is possible that pertinent messaging from these charities is still resonating with donors,” it says.

Giving to education totaled $38.87 billion, up 0.9 percent from 2010 after adjusting for inflation, and represented 13 percent of all charitable donations, while giving to health totaled $35.39 billion, down 0.4 percent after adjusting for inflation and representing 8 percent of overall giving.

Giving to foundations fell 8.9 percent in inflation-adjusted dollars to $25.83 billion and represented 9 percent of overall giving, while giving to “public-society-benefit” groups such as United Ways and the Combined Federal Campaign grew 0.9 percent in inflation-adjusted dollars to $21.37 billion and represented 7 percent of overall giving.

In comparison, the report says, the three largest donor-advised funds in the U.S. – Fidelity Charitable Gift Fund, Schwab Charitable Gift Fund, and Vanguard Charitable Gift Fund – realized average growth of 77 percent in contributions received between 2010 and 2012.

Giving to arts, culture and humanities grew 1 percent in inflation-adjusted dollars to $13.12 billion and represented 4 percent of all charitable giving, while giving to international affairs grew 4.4 percent in inflation-adjusted dollars and represented 8 percent of overall giving.

From 2001 to 2011, giving to international groups grew 167.1 percent when adjusted for inflation, representing the fastest growth of any sector for the period.

Since 1987, giving to international affairs grew at an annual average rate of 9.4 percent, compared to a 4.4 percent average annual rate of inflation.

Giving to environmental and animal groups grew 1.4 percent, adjusted for inflation, to $7.81 billion, or 3 percent of overall giving, with gifts of $1 million or more to support the ongoing cleanup from the 2010 oil spill in the Gulf of Mexico likely contributing to the increase.

And giving to individuals, mainly medications from operating foundations created by pharmaceutical makers, accounting for 1 percent of overall giving, and another $8.97 billion, or 3 percent, representing “unallocated” giving.