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.

Building community by investing in nonprofit capacity

By Todd Cohen

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

RALEIGH, N.C. — Marbles Kids Museum created a program to train its staff to help develop early literacy skills in visitors to the museum.

Triangle Family Services developed metrics on the use of its space that helped dramatically reduce the “no-show” rate among its clients.

Both Raleigh nonprofits were among 22 in the Triangle that received grants from Triangle Community Foundation to assess their operations, and among 21 that received additional grants to use those assessments to strengthen their organizational “capacity.”

The Foundation’s total investment in the effort, which included learning “cohorts” designed to provide training for participating nonprofits and help them share best practices with one another, was $330,000.

“Running a nonprofit is a business, and one with an extremely important outcome,” Pat Nathan, a member of the Foundation’s board, told 85 guests attending TCF Connect, an event in October at the North Carolina Museum of Art attended by 85 Foundation donors and nonprofits.

A similar event for donors and nonprofits was held in Durham and attracted 40 people.

Building capacity

Building the capacity of nonprofits in the region that work in the fields of youth literacy and community development is the focus of the first phase of a “People and Places” initiative Triangle Community Foundation launched in 2014 that also will invest in nonprofits working in the fields of land conservation and the arts.

The Foundation decided to make capacity-building in those four fields of interest its focus as the result of a two-year effort to assess its grantmaking with advice from donors, nonprofits and civic leaders from throughout the Triangle.

Lori O’Keefe, the Foundation’s president, told donors and nonprofits attending TCF Connect that its dollars for making discretionary grants are limited and its donors want to see the “direct tangible impact” of grants from their funds.

“As much as we want to give from our hearts, we have to invest in organizations’ ability to grow and expand and be successful,” O’Keefe said. “We have to be accountable for what the return on investment is.”

In the fiscal year that ended June 30, 2014, discretionary funds available for grants to community programs totaled $1 million, or the investment income on 15 percent of the Foundation’s $189 million total assets.

“It’s important for us as donors to recognize that for organizations to feed more kids or buy more books,” O’Keefe said, “they have to be able to invest in their infrastructure, much like a business.”

Literacy, community development

Nathan, founder and president of Dress for Success Triangle NC and a former sustainability executive at Dell, moderated a panel that focused on the issue of organizational capacity and included Sally Edwards, president of Marbles; Alice Lutz, CEO of Triangle Family Services; and O’Keefe.

Since Marbles was formed seven years ago through the merger of Exploris and Playspace, hundreds of thousands of children have visited the museum, Edwards said.

“We knew we had such an opportunity to make such an impact in early literacy but didn’t have the capacity to make it,” she said.

So with a grant from Triangle Community Foundation, Marbles assessed its capacity in the area of youth literacy, looking at factors such as its staff and exhibits to determine how it might best improve its organization to better focus on early literacy.

A second grant from the Foundation allowed Marbles to develop and launch a program in collaboration with Motheread, a Raleigh-based national training and curriculum development organization, to train its staff to help develop the early literacy skills of visitors to the museum.

Triangle Family Services, which works to help families experiencing family violence, financial crisis and mental health issues, was looking for ways to streamline its operations.

With five business units spread across multiple locations and operating seven days a week, the agency was using a complicated process for assigning its rooms for clients to meet with its staff.

Triangle Family Services used an initial grant from Triangle Community Foundation to¬† identify the need to improve that process, and used a second grant to develop and adopt a “systemizing of metrics and measures across all program areas to make it simple and accessible” to assign space for clients, Lutz said.

The result: A reduction — to 5 percent from 18 percent — in the no-show rate among mental-health clients.

Gearing for change

The “People and Places” initiative is part of a larger effort at Triangle Community Foundation to find ways to be a more effective partner to donors, funder of nonprofits and resource on local community issues, Lacy Presnell, chair of the Foundation’s board, told guests at the TCF Connect event.

“When we work together,” he said, “we are stronger and can increase the positive impact we have on our communities.”

In the fiscal year ended June 30, 2014, he said, the foundation received over 220 gifts totaling over $25.2 million, and made over 3,700 grants totaling over $15.4 million invested back into the community.

In assessing its grants, he said, the Foundation found the biggest fields of interest that received funding were education, arts and culture, followed by housing and human services, religious activities, and health care, he said.

Today, with $189.4 million in assets and celebrating its 30th anniversary and the 100th anniversary of community foundations in the U.S., Triangle Community Foundation is “trying to stay in step with rapid growth in the region,” said Presnell, who serves as general counsel for the state Department of Environment and Natural Resources.

Retooling for impact

O’Keefe said the focus of the Foundation’s grantmaking is local, with three-fourths of all its grantmaking remaining in the Triangle, and donor advised funds accounting for nearly two-thirds of the grant dollars that stay in the region.

The Foundation has been retooling, looking for “how to best deploy the flexible funds that have been given to us by past and current donors, and how to put them back into the community for the best use,” she said.

In talking to donors, the Foundation learned that while they were “excited about the programs, they were not always sure how it connected back to their funds and grantmaking.”

And finding that donors already were funding programs in the areas of youth literacy, community development, the arts and the environment, she said, the Foundation decided to focus on capacity-building in those four areas.

Partnering for success

Jessica Aylor, director of community investment at Triangle Community Foundation, told guests at the TCF Connect event that partnerships with nonprofits is one of central roles the Foundation is playing.

“We are taking more of a partnership approach with our programs, trying to strengthen the capacity of nonprofits, giving them grants and putting them in learning cohorts” where they can learn from one another, she said. “Stronger nonprofits end up with greater impact in the community.”

Funding for the Foundation’s “People and Places” community programs that focus on youth literacy, community development, land conservation and the arts is available from Fund for the Triangle, created through gifts to the Foundation by donors “who wanted us to be more strategic in our funding,” she said.

Getting involved

In addition to donating money, said panelists at TCF Connect, donors to Triangle Community Foundation and to nonprofits have many other opportunities to get involved with nonprofits they care about.

Donors can contribute time as volunteers, either working directly with a nonprofit’s clients or in the back office, or can serve on boards, committees and task forces, they said.

At Marbles, for example, a donor could volunteer to help deliver programs or with committees such as one working on a master-planning process to expand the museum’s campus, Edwards said.

And at Triangle Family Services, donors can serve on boards, task forces or a facilities committee that currently is looking at how to get a sump pump for the organization, or can attend a coffee chat with the CEO on the first Friday of each month from 8:30 a.m. to 9:30 a.m.

Donors, nonprofits and local residents also can attend the Foundation’s What Matters event on April 1, 2015, that will feature stories about giving and data on the Triangle, and will focus on “how the region is changing and how to be thinking for years ahead,” Aylor said.

This past April, the What Matters event attracted 500 people and focused on community innovation.

“Community foundations,” she said, “are places for people to learn together and support causes they care about.”

O’Keefe agreed.

“The community foundation field is about connecting resources to opportunities and needs,” she said. “The more we learn together, the more work we can do.”