Capital Region Cares Capital Region Cares 2017-2018 - Page 14

n Opinion Sustainable STRATEGIES NANCY BRODOVSKY, FOUNDER, SACCONNECTS I am a champion of nonprofits. I found it was easy to raise money for worthy causes and a great way to enhance and give back to my community. I welcomed the skills and ex- periences I acquired in the nonprofit arena for the last 40 years — first as a long-time volunteer, and then in the last five, as a professional consultant recruiting individuals to serve on boards. Nonprofits have a tremendous impact on our state and our community. According to the Impact Foundry’s An Economic Report Card 2017-2018, in the four-county Sacra- mento region (defined as El Dorado, Placer, Yolo and Sac- ramento counties), there are over 16,000 nonprofits. They represent more than $34 billion in assets and $1.5 billion in annual revenue. The nonprofit sector needs to be recog- nized as a major economic participant to our region. But many nonprofits are or will soon be in financial crisis. Some basic problems faced by nonprofits were high- lighted in a 2015 survey conducted by the Nonprofit Finance Fund. Fifty-three percent of nonprofits nationally had three months or less of cash on hand; 48 percent weren’t able to meet the demand for their services leaving significant un- met needs. Only 51 percent had collaborated with other or- ganizations to improve or increase services offered. Nonprofits need to obtain sustainable funding, which starts with diversifying their sources. I’ve seen the same companies, foundations and individuals solicited over and over again. During the 2008 financial crisis, there was much talk in the nonprofit community about the “new normal” approach to operations and fundraising. When nonprofits believed they couldn’t go back to the same companies and individuals, they tried to be creative and looked for alter- native funding sources. Have nonprofits been successful at these new approaches, or have they gone back to their old comfortable ways of asking the same sources for money? Nonprofit leaders must be appropriately trained in fiscal management, strategic planning and staff/crisis manage- ment as these skills are essential to their success. There’s another tough question we need to ask our- selves: Do we have too many nonprofits in our region? The 14 CAPITAL REGION CARES 2017 | first step to starting a nonprofit should not be a great idea for a particular project, but instead an assessment around an issue, organizations impacted by it and potential ser- vices already available to address it. As a region, we need to take a hard look at where there might be duplication of, as well as gaps in, services. This sort of strategic planning is enabled by enhanced communication and stronger collab- oration between executive directors across variations and locations of service. Collaboration — and even mergers — could be the solu- tion to existing and future problems. There are nonprofits that are passionate about their mission but are too small to be economically sustainable unless they collaborate or merge. Particularly for those organizations with annual budgets under $250,000, this type of strategy may enable them to realize economies of scale and enhance their long- term impact. Those nonprofits, with professional guidance, should determine which should merge and which can con- tinue to function through collaboration. They can then reorganize their structure and work together to generate great interactions, a synergy of ideas and collectively cre- ate programs with a broader scope, wider appeal and more successful outcomes. A dialogue amongst our community leaders with con- sultation from our nonprofits needs to take place in order to examine methods of making our nonprofits more sustain- able, efficient and effective. Currently, mergers seldom hap- pen until an organization is financially desperate and on its last breath. I would hope some of these nonprofits could ask themselves the hard questions and entertain the possibility of being stronger together. Greater influence in the commu- nity through a merger and or collaboration could stimulate real action. In the for-profit world, mergers frequently create greater value to customers, clients and shareholders. This has been accomplished less frequently by nonprofits. Prior to consid- ering a merge, serious concerns need to be identified: dif- ferent cultures, fear of change, job security, loss of identity and control and merging of board leadership. Each one of