The business aspect of the nonprofit industry is one that is often overlooked. Sometimes thought of as only a community of “do gooders”, it’s easy to forget that, behind the heart, there is a backbone of business professionals who grapple with the same struggles as other businesses. Recently, nonprofit executives met to discuss the challenges their industry faces and solutions for a sector that is vital to the well being of the community. The roundtable was sponsored by City National Bank and held in Las Vegas.
Connie Brennan, publisher and CEO of Nevada Business Magazine, served as moderator for the event. These monthly roundtables bring together different industries to discuss issues and solutions.
HOW COLLABORATIVE IS THIS INDUSTRY?
Bob Brown: It was more competitive, [but] it is becoming more collaborative. I’m really encouraged by signs of hope such as the CEO Exchange where a group of larger nonprofits get together and have regular meetings and create strategies [to address problems in the nonprofit sector]. We are also looking to grow that group to cover more nonprofits, because I think we must have a voice for the safety net. That’s a very important thing for all these organizations.
Jimmy Monaghan: What we battle is a system problem, and for me specifically, is knowing what’s out there so I can make the right handoff. It’s not [just] a referral. [I want to be able to] call with them and make the warm introduction. I am really trying to combat the ideology of “my donors, my sandbox, so don’t touch.” I just want to help people. I want to help families. I want to help kids. I want to see child abuse ended and I want to see the problems that we’ve all gotten because of that ended. I believe that if we come together as one, the tremendous effect that we could have is astronomical.
Scott Rosenzweig: I believe that we need to start working more collectively as nonprofits to leverage what we have with one another. Sometimes we can be afraid because [we think another nonprofit is] going to steal a donor, but I have not found that to be true in my experience. I would love to see us working, not only more with one another, but also with the businesses that serve each individual organization.
Andy Bischel: I came in on the backside of a merger of two Boys and Girls Club organizations in the same community. It took eight years to make that merger happen. It literally takes a crisis to get nonprofits to merge, because they’ll go down fighting, but the benefit was tremendous. [Also, it is] easy to talk about culture, [but it is] really hard to actually get two cultures to merge together. [If you] think of two businesses merging, it’s the same thing on the nonprofit side. There was no place to go but up, and we’re in a much better place today because there isn’t that donor confusion.
Nicole Lamboley: I would like to see better collaboration statewide. We cover a lot of rural communities and they are suffering just as much as those in the urban and metropolitan areas. I think if we can layer and leverage our resources and talk about combined strengths, [then we can] fulfill the needs that are showing up as gaps in our communities. We all do incredible work, but [the next step is to] collaborate and look for that collective impact not only among the nonprofit community, but our business leaders and more importantly our policy makers.
Rosenzweig: It’s being best in class at what you do, not being so focused on the competition. I think there’s room for everybody to help a lot of people in our community, but I feel like we would be stronger together with those kinds of relationships and being able to leverage them. [In regard to] bad actors, I think there’s a lot of people in this room who know who the bad actors are, and we don’t share enough of that information, so we tend to recycle. What I would love to see is more of those types of honest, open, and transparent [conversations].
Lamboley: We learn from each other. We’re from different communities, but it’s no different than having different neighborhoods. We need to move donors and our supporters away from the [mindset that we are duplicating services] and more into how we are complimenting [each other]. We really need to change the messaging a little bit and [focus on how we can] work together because there are needs and gaps that are not being met.
Christina Vela: Imagine a family that has multiple touch points. You have a child in foster care, a young person with intellectual disabilities and then the mom is a victim of domestic violence. Although [nonprofits] are operating sort of vertically, families operate this way, and they are many times touching multiple systems. There’s a real importance for nonprofits to know each other well enough to say, “Here’s where I end, but here’s where the next organization begins” and that takes a lot of humility.
DID COVID HAVE A SIGNIFICANT IMPACT ON YOUR ORGANIZATION?
Rosenzweig: There was a lot of fear [during the pandemic]. Whether it was the population that we served, our staff [or our] donors, there was just a lot of fear out there. [But] we put our heads down and kept granting wishes and we never stopped granting wishes. I talked to so many donors who said, nobody’s calling anymore and I wonder how much fear played into that. [I wonder] how many people stopped calling because they were thinking, “I don’t want to burden my donor right now,” or “I don’t want to burden this organization.” But if anything, we leaned harder on the businesses that had helped us through [the pandemic], as well as our individual donors, and we found true success with that.
Liz Ortenburger: Strong nonprofits thrived, but nonprofits that were not strong in leadership or finances really struggled. Those nonprofits that were well positioned before and had good leadership had good business because there was so much to take advantage of.
Lamboley: I would say we all rose to the challenge. We didn’t stop, we didn’t think, but [we did] fear for our employees. And now [we are] exhausted because the work is still there and there is an expectation that we are going to take up the needs of the neighbors we serve into the next phase [post pandemic].
WHAT BUSINESS CHALLENGES IS THIS INDUSTRY FACING?
Tiffany Tyler-Garner: I also want to note, particularly as it relates to workforce issues we grapple with, [which are] issues other businesses grapple with; in some instances [nonprofits have] greater constraints. As a nonprofit, you’re not in a position to do some kind of retention package or other [methods] in which folks are attracting or retaining a workforce.
Vela: As an employer and a service provider, [we struggle with a] shrinking workforce because [workers] can make more money at other places. In the past, [we were] able to pull in people because of the mission and the work, [but] it doesn’t work the same way anymore. Our millennial workforce wants different things than just feeling good about their job.
Monaghan: I have an incredible expectation of my staff and I believe there needs to be transparency amongst staff. Expectations must be clearly defined, even if they’re high. If they’re not achieved, then we have to figure out why. If it is a performance issue, that we need to move on from that.
WHAT SHOULD INDIVIDUAL AND CORPORATE DONORS KNOW?
Brown: There’s a humility to working in a nonprofit that you acquire by working with people. You really understand that you’re providing a service that this community needs, but not everybody recognizes that and it’s important to communicate that to the community on a regular basis. We could not have a community if we did not have these nonprofits doing what they do. That’s my message to the community – we need your help. We’ve just come through several crisis as organizations and we need help. Whether it’s a donation, volunteering for a board or helping volunteer to do the work, we need all these things and it is vital right now for this community.
Bischel: I think [donating] is still relationship based and I don’t think that ever changes. It’s about asking and being upfront.
Julian High: The idea that we are only allocating 25 percent of the [funds] we actually raise is a misconception that’s been out in the community and around the world for a very long time. I do think that companies have a need for engagement along with donations from their employees. And I think a lot of the large gaming companies, at least here in southern Nevada, have their own foundation. In an effort to better manage employee engagement, [the gaming companies will] pull those campaigns from United Way. I think the longer-term solution is [asking] how does United Way partner with the companies to make us an attractive partner in ways that are outside of the corporate campaign and eventually we [can] earn that business back? Or perhaps we figure out new ways to engage employees that do not necessarily come in through a workplace campaign.
Lamboley: One way that businesses can support [nonprofits] is by making their employees aware of having corporate giving programs, workplace donation programs, and places where an employee or group can help direct some of the donations. That way they begin to understand the services that are provided by a variety of nonprofits rather than keeping it just at a corporate level. I think for corporate giving programs, in regard to new millennials and what people look for [in donating], an employer is sort of their community base. But sometimes we have to provide an opportunity or educate people in the workforce. There [are also] corporate matching programs [and] it doesn’t take a lot for every so many dollars. Maybe [the employer can] make that investment to a nonprofit of [their employees] choice. I think there’s some creative ways that the business community can continue to leverage and layer their support along with that of their employees and the household members of those employees as well.
Ortenburger: If I was a business looking to invest in a nonprofit, I would ask two questions of the CEO. How do you watch your cash? And what CEO groups do you belong to? Because we have got a level of CEOs within the nonprofit community that vary tremendously. What we need from the [business] sector that is investing in us is [to do] some due diligence around who is leading that nonprofit.
Lamboley: I would say there’s a real misunderstanding about what a nonprofit corporation is. [For example] the charitable registration statement that is part of the filing for nonprofit corporation paperwork was implemented through the Secretary of State’s office a number of years ago because we had people who were soliciting funds. They were a nonprofit corporation, which is a state established entity, not an IRS tax code, so if you’re a 501(c)(3) organization, you can solicit charitable contribution and the donor gets a tax benefit. [But] there’s [about] 30 501(c)(3) designations and I think that confuses a lot of people. A soccer team might be a nonprofit corporation, but it’s not a charitable entity. It doesn’t meet the IRS definition, [but] they legally are a nonprofit corporation, they’re just not a charitable nonprofit corporation. I think there’s some due diligence that the business community could do.
Ortenburger: We don’t go after businesses for a lot of money because we run a business in which my clients are not here for you to see. A shelter is not a place for you to tour and see what women and men struggling with domestic violence look like, so there’s an issue there with what’s affecting nonprofit [funding]. I think what businesses and nonprofits need to do is uncover where the gaps are and [find out] who’s truly filling those gaps. There needs to be a better way for the investors at the state level and at our local business level to understand what’s happening. At the CEO Exchange [we have discussed] what it looks like to [create] a report card. We can’t scientifically measure hope, so then what does it look like to have an index of nonprofits so that a company looking to invest can actually have apples to apples to look at?
Tom Kovach: I think locally there is too great of a view by nonprofits as dependent on corporate giving. The problem with that is 90 percent of giving comes from individuals, not from corporations. I would encourage corporate givers to add or replace their requirements to make the nonprofits demonstrate that they are getting a significant portion of their funding from households or foundations that are not tied to corporations because that is going to create a healthy environment for that nonprofit and for all of us.
WHAT CHANGES WOULD YOU LIKE TO SEE IN FUNDING?
Ortenburger: We need a better system statewide and locally to help people know where to invest and what that dollar does, but not to put restrictions on that dollar. I don’t need [donors] to tell me “This is for diapers.” I need them to say, “Here’s $50,000, we trust that you will invest this in a way that makes sense.”
Kovach: The biggest challenge that we face in 2022, which unfortunately I think is due to the pandemic, is [being able to] collectively secure more funding from outside the state to support what’s happening within the state. As an example, federal funding is typically based on residents, and we all know that we serve a lot more than just the people who live here. COVID relief funding certainly was an example of getting a lot more funding than we typically have, but that obviously is not sustainable. I believe that we still need to place toward the top of our collective agendas, the work we can do together to bring more federal and private resources based on funders outside of the state into the state.
Ortenburger: We have a fiscal infrastructure at the state level that does not understand the mechanisms tied to federal funding, so it hamstrings nonprofits that are ready to grow. I don’t believe that decision makers at the state level have a clear grasp on what is actually needed to help us grow from a federal funding standpoint and I don’t think there has been a consistent enough voice at the nonprofit level to echo that. There have been bandaids, [but] there’s no clear fix.
IS TRANSPARENCY AN ISSUE IN THIS INDUSTRY?
High: I think transparency is the foundation of private assistance in the nonprofit sector, because if we have full transparency, it gives people visibility and accessibility into the organizations where we serve. We’ve done a good job at United Way [with being transparent]. We are very inclusive about transparently during our grantmaking process, how we involve the community, and the systems that we use to track that. For anyone in the nonprofit sector, transparency has to be the foundation.
Tyler-Garner: We need to be transparent about the ways in which our social issues connect to some very real business issues. For example, there is a connection between economic development and workforce development and something like childcare assistance or housing assistance. I think the more we get to clarity about the ecosystem, which is not just nonprofit organizations, it’s not just businesses, it’s any number of stakeholders, the better we’re going to get around this whole discussion about duplication of services and collaboration.
Rosenzweig: When you [discuss] transparency, it’s not just [about] my 990 (IRS tax form). Look at the fact that we have 23 months of liquidity right now in our organization. Please look at everything else that we are doing. Ask me for our KPIs (key performance indicators). What are our plans for this year and three years and ten years? Because it’s plotted out. We have it based on our information and our knowledge about what we do. The same way every single person at this table, I believe, truly has those numbers. They know where their organization is headed, so when you look at a program ratio or you just look at a 990, are you seeing the full picture? Because we run our businesses like a business too.
