For years, nonprofits and businesses seemed diametrically opposed: Nonprofits “do good,” while businesses “make money.”
People who gravitate to nonprofits are passionate about “a cause,” come from the social sector or have liberal arts’ degrees in sociology or the like, while people who gravitate toward business have MBSs and are more hard-nosed, maybe even “insensitive.”
This stereotype often rears its head in our small rural county, which has more nonprofits per capita than any county in our state.
For the record, I’ve often worried about the disproportionate number of nonprofits in our county because it can create a capital squeeze, with the limited number of donors. Our recession has only exacerbated that.
One example: We support building a bigger, more acoustical arts center in our community and have offered to donate all the proceeds from one issue of our magazine to any approved plan. The offer is here.
I am reminded, however, of all the other pressing projects that could compete with a better arts center: paying for the new CORR building, ongoing improvements at the Sierra Nevada Memorial Hospital and so on. It’s a good point.
There’s more at play too.
In our community’s quest to support the nonprofits, sometimes the businesses side of our community winds up being villainized, which is unfair and counterproductive. After all, we are a community — and nation — built on “mom and pops.” We need to support our local, family owned businesses.
To me, being passionate about a “cause” and having a business sense should go hand in hand.
We’ve always supported the nonprofits around here, but, frankly, we also have noticed signs of:
•A lack of transparency and accountability of their finances and decision-making.
•Hiring based on cronyism, not merit.
•Single sourcing, not RFPs, in their business practices.
(You’ll never read about this negative perspective in The Union, because they are on a mission to grow their readership, and nonprofits are a big part of that. The new publisher was not brought on board to ruffle feathers.)
But outside our small world, there’s an interesting shift going on among the nonprofits: A rise of business degrees in nonprofit organizations.
That might seem like heresy to some nonprofit leaders, but as one reader here observed: “In an era of limits, the changing nature of philanthropy … nonprofits are finally getting the message: We are in the business of doing good, but doing good has a bottom line, one that must be consciously managed, measured and reported to be competitive. I think that is a very good thing.”
An article from the Harvard Business Review outlines the trend and the benefits that can come with a more business-like focus in running nonprofits. It is here.
One highlight: “While each individual leader brings his or her unique style of leadership, they share a common thread of applying an entrepreneurial and analytical mindset to field-based expertise to ask new questions and imagine new possibilities.”
Filed under: Uncategorized
We did an analysis of nonprofit organizations in the Sierra Nevada at Sierra Business Council in 2007 and found that almost 50% of all nonprofits in the core 12 county region were based in Nevada County. I think there are a number of reasons for this dynamic (if it still holds true).
First, a large number of nonprofits that were chartered (and a large number in Nevada County) were either no longer active or fell below the $25K per year threshold the IRS maintains for filing a 990 report. We found a disproportionately high number of nonprofits in Nevada County were dormant.
Second, industries tend to ‘cluster’ to create the business ecosystem they need to prosper, and nonprofits being no different than any other industry, clustered in Nevada County around the support services they needed, like community foundations, fundraising consultants, tech consultants, communications professionals, pockets of high income individuals with a connection to community, etc.
Finally, cultural movements have been influential in the location of nonprofits, and no recent cultural movements affected Nevada County more than the rise of a technology cluster and the rise of a ‘spiritual’ cluster around the Grass Valley Group and Ananda respectively.
On nonprofit accountability: I believe that it is very important that nonprofits be much more transparent and accountable in the future. It is important to remember that nonprofits are already more accountable than the typical private sector business. Their status is public; tax filings are public; board members are required to file conflict of interest statements if the organization exceeds a certain budget; and are required to have independent third party audits.
The rules are on the books, to be sure, though the budget requirements can be a real roadblock to transparency. Whether they are enforced properly is another matter. I can think of an example written about here where the filings weren’t up to date. I was hoping for more in The Union’s recent “exhaustive” report on nonprofits, but it was nothing more than cheerleading. There are some very serious management, fiduciary and policy-making matters to ponder, though I do appreciate living in a community that is so oriented toward “giving” and “volunteerism.”
Jeff, now that The Union is no longer behind a paywall I am wondering if you could point me to their recent report on nonprofits. I am searching the site and can’t seem to locate it.
Mr. Frisch,
I read recently that non-profits account for one third of Nevada County employment. Can this be true?
If it is true, then what does that say about our local economy?
Also, can you expand on this statement?
“Finally, cultural movements have been influential in the location of nonprofits, and no recent cultural movements affected Nevada County more than the rise of a technology cluster and the rise of a ‘spiritual’ cluster around the Grass Valley Group and Ananda respectively.”
Judith, there is no specific North American Industry Classification System code for non profit organizations, they are blended into each industry sector, thus it is hard to come up with a specific number without a survey to back up the data. Our analysis showed an important component of the economy being in the not for profit sector in Nevada County, but I don’t believe it is anywhere near one third. I would frankly be surprised if it was more than about 5%.
Is the implication in your question that this says something specific about the health of our economy?
I think the new reality is that traditional idea of the ‘nonprofit’ is a little bit of an outdated concept. In many cases nonprofits provide services that would otherwise be provided in the public or private sector, things like feeding the homeless, preventative health care, early childhood education, or environmental restoration. In many cases the public and private sector work closely with these non profits and use them to provide services at a lower cost with less overhead leveraging their ability to move quickly with less bureaucracy than government or business. In many cases the existence of a vibrant nonprofit sector is actually an indicator of great efficiency in an economy.
http://www.census.gov/eos/www/naics/2012NAICS/2012_Definition_File.pdf
I have to go to an event, but will answer the cluster question more fully when I am back.
Judith, you asked me to comment on this:
“Finally, cultural movements have been influential in the location of nonprofits, and no recent cultural movements affected Nevada County more than the rise of a technology cluster and the rise of a ‘spiritual’ cluster around the Grass Valley Group and Ananda respectively.”
First, a caveat, I have never been a fan of the term ‘creative class’ because it unintentionally connotes a value distinction; the term is meant merely as ‘a set, collection, group, or configuration containing members regarded as having certain attributes or traits in common’.
Certain types of economic activities and industries (like the tech industry cluster that grew here starting in earnest in 1968 with the first major orders from the Grass Valley Group) have increasingly been considered ‘creative’ industries, and certain players, such as scientists, computer programmers, engineers, design professionals, artists, and even media workers and the professional services that grow around creative employment have increasingly been defined as a ‘create class’. These people often are a significant generator of other social sector, creative, and mission driven industries, including nonprofits.
Research done at the University of Toronto popularized by social scientist Richard Florida shows a direct link between these ‘creative class’ activities, and supporting or affiliated activities like the activities that nonprofits engage in.
It is actually a pretty simple story: creative people want to creative things both at work and in life, and inspire other people to do creative things. Those people start rubbing together an after work they create things like public radio stations, centers for the arts, and organizations to save rivers.
In the economic development field there is an entire school of thought around encouraging a ‘creative class’ economy. There is certainly some controversy around whether Mr. Florida’s research proves this, but its clear that like gas solidifying into planets, certain places become places where certain activities cluster. Its easier to invent a new product or be inspired to express yourself artistically in a place where others are creating a new products or expressing themselves artistically and thus we have Silicon Valley and Santa Fe.
Religious and spiritual movements are by definition defined as nonprofit activities by the IRS. But religious cultural movements, like the spiritual movement in the late 1960′s that led hundreds of people to gather in Nevada County to found the Ananda community, have a history of spinning off other religious (and thus in modern times nonprofit) organizations. People drawn to spiritual experimentation tend to either find their bliss, as many drawn to Ananda did, or continue to experiment to find their bliss, and often attract others to their vision.
This is not new in American history; the burned over district in upstate New York in the second great awaking was not called that because of wildfires, it was ‘burned over’ by faith, the location of the birth of Mormonism, Adventism, Millerism, a new brand of Pentecostalism and Oneida. Faith rubbed elbows with faith, nonconformists gathered and innovated, and new faith was born.
Nevada County had both, a creative industry and a spiritual movement. Pretty ripe ground for the rise of nonprofits.
I was curious about the pay wall for the Union online coming down, Nope. still there-
“To get full access to this article, a web subscription is required.” is what I got-
Like most other news, the nonprofit report is still behind a paywall. I tried to subscribe for $1/day to find the information Judith was referring to, as well as help out Steve. In fact, I tried on Saturday to sign up for the $1/day service to read Dave Schmall’s column. I keep getting a security code error. Trouble is, I’m successfuly using the same credit card (American Express Platinum) to buy souvenirs for my son, and dinner, at Spring Training in the same timeframe. I guess The Union doesn’t want this business. LOL.
Jeff,
Here’s the link. Hope it helps.
http://www.theunion.com/news/obituaries/4589689-113/revenue-gross-nonprofits-county
Thanks for posting the link Judith. I think the statement that nonprofits “employ at least 600 people” and that considered aggregately would be the third largest employer in the County is kind of apples and oranges. If you took all of the workers aggregated into many of our industries and compared them to one business they would look big. According to the Department of Finance there are about 27,000 people employed in Nevada County, so total nonprofit employment would comprise about 2% of the labor force.
Thank you Steve,
You might understand how an average citizen would look at a statistic like that and wonder how it is going to work. I can see that it is more complicated than I thought.
I scrolled through the census list you provided. What am I looking for?
Judith,
I do believe there is a preponderance of nonprofits in our community, given its size.
I also believe it is endemic of a lack of good paying, private sector jobs.
Instead of launching their own business, people launch their own 501 3(c). It’s been going on for years.
The Union report celebrated nonprofits, as we all should. “Volunteerism” and “giving” are good qualities for any community to have.
But sometimes I worry this gets a little out of balance. And it can breed a real sense of entitlement, sometimes at the expense of the private sector.
It’s perfectly acceptable to ask the same questions about transparency, accountability and cronyism among nonprofits that come up in other sectors of our society. But I often find it’s a “taboo” subject in our community.
Judith, I included the NAICS code info show just how complicated the economy really is–within many of the sectors outlined there there is both a for profit and nonprofit sector–and how hard it is to really tell what is going on without more specific research. I really think 30% is an inadvertent exaggeration by your source.
OK. So “combined (nonprofits) would be the third largest employer,” the article reads. That’s still a big part of the workforce for our community.
Jeff, as you will see in another post, that is 2% of Nevada County’s work force. Don’t get me wrong, that is significant, and nonprofits are an important contributing factor in our economy, but I don’t want to let a potential false impression that nonprofits are one third of our economy stand.
Sounds like in this and the other recent nonprofit posts on this blog, ‘nonprofits’ are being lumped together into one group. Maybe that’s a direct follow-on from GVDA’s decision to exclude nonprofits regardless of what they actually do.
The tone, both on this blog and in the GVDA’s decision, from an ‘outsider’ point of view, i.e. without having actually met or spoken with any of the GVDA folks directly, is one of ‘Hatfields and McCoys’. Either you’re for profit or you’re agin’ it.
It would be very interesting to see the numbers on how many small (<$25k) nonprofits here are active but do not employ anyone. I can speak from experience having been a part of two of those: the groups are not DFH's, neither are they VIPs – we actually have jobs, and many are middle-class-retired from jobs, in other fields not related to the mission of the nonprofit. From comments here and on other threads, and from the tone of the posts themselves, that must come as a huge shock. The passion to be a part of the community group, a.k.a. the 'nonprofit', does not come from the desire to make a living off the donated or taxpayer dollar – it comes from the passion for the community. Volunteerism, etc – you've spelled that out but it doesn't seem like you've made the connection.
Community group booths aren't there primarily to make money – if at all. They are there to spread a message – and each one is part of the story that defines the community – that makes it a great place – and that ultimately draws a lot of people back to visit downtown and the rest of the community. A sterile environment probably isn't as much of a tourist draw.
The decision to go from zero employees to one is not to be taken lightly. It has rocked our boat in the past. If the mission can be accomplished with zero employees, maybe with limited specific short-term contracting work only as needed, with specific and critically-reviewed statement of work, just like in the for-profit world, that is a huge benefit. Basically spending money in the nonprofit world is not to be taken lightly, just like in the for-profit world. "Be a good steward of the donated dollar." Combined with "do unto others", regardless of your religion, it's a solid credo and pretty easy to follow.
I don't doubt that there are nonprofits out there that fail to follow that set of guidelines – just like there are for-profits out there that fail to follow that set of guidelines. But, this 'Hatfields and McCoys' business is just silly, not to mention that it's an inaccurate and offensive oversimplification. Community groups are part of the community and it's sad to see that anyone feels the need to exclude the very thing that sets the community apart from anywhere else.
Tom,
As a matter of fact the “Hatfields and McCoys” tone was in the email from the Political Outreach committee to the Nevada County Democrats at the very beginning of this discussion. It gave an incomplete view of what the GVDA was doing. The GVDA has said repeatedly that it is expanding its own booth for nonprofits (such as The Center for the Arts) to distribute their own literature. I would encourage you to speak directly with the GVDA leadership to get their perspective.
Mr. Grundy,
Do you remember when C.I.B.A. ( California Indian Basket Weaver’s Association) was operating in Nevada City?
I made a donation to them when I first arrived in the county. You can imagine my dismay when I read the Union article some months later and learned of the 50K embezzlement, by a paid employee, that sent CIBA’s funds to the blackjack tables in Reno. It was a nasty shock.
It was also a first impression of this community. I came away realizing that it is only human nature to take something for granted if you didn’t really earn it and I also perceived the pervasive cynicism, and resulting sense of entitlement surrounding the generosity of donors.
No hillbilly vendetta here, just the firm belief that all non-profits, regardless of their mission, should be vetted and be able to stand up to thorough scrutiny.
We made a donation to the APPLE Center and were disappointed how that unfolded at the end, certainly without our input. I wanted to use it as a learning experience for our son about sustainability.
Sorry to hear of your experience. No, I don’t remember that group – might predate my time here. Completely agree that nonprofits, as well as for-profits, should stand up to scrutiny. Fortunately (hopefully?) that’s an outlier. We’ve probably all been shafted by businesses from time to time (or more frequently?) but we still mutually agree to do our business in the world of capitalism.
Seems like the bottom line is that a lot of folks just don’t see that there’s any value to the local economy by hosting informational tables from community groups.
Jeff, I understand your choice to redirect the Hatfields and McCoys reference to somebody else, but, that’s subjective, it’s in the eye of the beholder, and I disagree with you. I think the Hatfields and McCoys split came from your posts and your repeated ‘safe and smug’ replies that there is no law against walking around with literature, or suggestions that somebody else start up their own nonprofit showcase event. Those suggestions come across as pointless, victorious, childish, smug, and defensive.
As far as I know, GVDA is free to invite or not invite whoever they want – that’s not the point – that’s not what’s being challenged, at least not by me. My point is that I think GVDA is missing out on a huge free benefit to promote the community and the downtown area, not to mention all the money that nonprofits pay to sign up for booths, by choosing not to invite nonprofits. I will make a point to get in touch with them to hear more of what prompted the change – it’s very curious.
I’ve got to go to work at an unrelated for-profit job now, at a computer behind a firewall which won’t let me post to your website.
Tom, our data is old, but in 2007 it showed that more than 75% of the nonprofits chartered in Nevada County have revenue below $25K and do not employ anyone.
For at least some of the not-for-profits, major income is grant funded. These grants, both government and private, are sourced from across the country, not only from some well heeled local citizen. There is a tremendous amount of revenue brought and seeded into the local community via non profits.
As a timely addendum, I just received word that last week SYRCL was granted $28,600.00 from Interior to continue work on the Hammond Bar restoration project. That money will employ local labor and buy/rent local equipment. http://www.grants.gov/search/search.do?mode=VIEW&oppId=218554
Well said, Ralph. And equally so, people who help “ring the register” at local merchants provide sales tax dollars that flow directly into the community.
“Is the implication in your question that this says something specific about the health of our economy?”
I think anyone living in Nevada County already knows about the health of our economy. I am wondering how a proliferation of non-profit organizations will help. They may have a new face in the “new reality”, but they still need donations to operate. I am no economist, but my folks always told me, “You can’t take out more than you put in.” This is why I was somewhat skeptical about the proposed Alpha restoration plan to involve so many non-profits. As Nevada City waits, the building is deteriorating badly and the town is suffering for it. What has happened with that?
(BTW, congratulations to Grass Vally on snagging a deal to have the Holbrook Hotel remodeled, and on National TV. Whoever managed that is one smart cookie.)
Then there is the issue of how non-profits are run. How efficiently do our non-profits operate? Is there national a rating system, and if so, how does Nevada County compare to others communities across the nation?
Enjoy your event. I’ll check back this afternoon.
charitynavigator.org is a good rating system (you can see most of the financials, see how much the CEO makes, etc etc), but, probably none of the small locals would show up on that.
Judith, there is no standardized legally recognized national rating system, but there are a set of things that all nonprofits need to do in order to maintain their nonprofit.
1. They must file a 990 federal income tax form (under penalty of perjury) and those are public information
2. They must do an annual third party audit (under standardized auditing protocols) and that is public.
3. They must file their Articles of Incorporation with the Secretary of State’s office and those are public.
4. If they have more than $2 million revenue they must have a separate financial audit committee that is not the same as the board executive committee to create a double check.
5. Their board members must file conflict of interest statements.
Finally, there are a couple of top notch third party rating systems which you can Google:
Great Nonprofits run by the Better Business Bureau
Guidestar (which SBC uses)
Charity Navigator
But I think the best advice is that you should know who you donate to. Ask your friends and neighbors, develop a relationship with the people you donate to, ask them to see their audited financial statements.
And I repeat, nonprofit corporations are just like for profit corporations, just a lot more transparent. For profit corporations do not have to show anyone they don’t want to their audited financials or articles.
Nonprofits that do not set and maintain high financial accountability standards should be punished by the public with reduced donations.
One final issue. Most people assume that nonprofits survive on donations. That is often not the case. They may earn income by providing services, they may have business income from investments, they may even create and market products. The definition of a nonprofit is not that it is supported by donations, it is that it serves a public purpose that provides public benefit and any excess income is reserved for that purpose.
Also – sorry to hear about your experience with the APPLE center. I am in the exact same boat.
Tom,
I’m not redirecting anything. Read Jim Firth’s original email for yourself. I was merely reacting to it. You appear to be wearing an “anti business” chip squarely on your shoulder. It’s unbecoming. Instead of “making it a point” to contact them, why don’t you just educate yourself first? It’s that same attitude that has people wondering whether there should be a loading zone for local merchants near the Nevada City Boardwalk, rather than a bike rack. Listen to the concerns that are being expressed.
I don’t read any “anti-business chip” on Tom’s shoulder.
In our community’s quest to support the nonprofits, sometimes the businesses side of our community winds up being villainized, which is unfair and counterproductive. After all, we are a community — and nation — built on “mom and pops.” We need to support our local, family owned businesses.” Quote from above article
Good Morning,
Here is an example of a non-profit villainizing a local business which supports the non-profit through dues etc. The commercial section of Pine Street during the Madre Gras festivities had Three(3) hat vendors side by side . The Hat Store ,which supports The Nevada City Chamber of Commerce, is being villainized . Not only The Hat Store but also Our City Government. These foreigners do not have a business license, pay sales tax to maintain our City etc.. They most likely are not even from Our County. This is not the only event the Chamber does this to our local businesses . Do not ask me why they do this , ASK the C of C Board of Directors and/or your Council Member !Our little businesses have enough competition in this world , They do not need it from a Organization that most businesses support. One does not have to think very hard why many do not or leave with treatment like this to a member of an Organization which is suppose to support the Locals.
Niel:
On this I think we share a common view.
In the “olden days” of the 80s, when 15-20,000 people routinely packed the town on Father’s Day for the Nevada City Classic, the chamber developed a policy for street vendors that worked. It was also used on July 4th, Constitution Day, etc., but the need for a firm policy arose because of the mass of vendors who used to grab space for the bicycle races.
In deciding which vendors to put where, first priority went to the merchants. It always went to merchants. If a merchant wanted to go out on the street with their product, they got the spot. Next came Nevada City-based non-profits. Then came other Nevada County non-profits. Then came other Nevada County commercial businesses.
Our final categories for vendor placement were out-of-county non-profits and then out-of-county commercial businesses.
But guess what? Darned if we ever had enough vendor space for anyone in the final two categories. Funny how that always happened.
I recall in 1983 or ’84 that an out-of-town commercial vendor parked his food truck on North Pine on Saturday night, off the course, so that he’d have a great spot during the race. But thanks to then-Police Chief Bill Beard, the fellow who owned the food truck was told (politely, of course) to hit the road. And he did.
It was a system that worked and always gave first preference to the local merchants who wanted to sell product in front of their store. And no matter what happened, vendors selling a product available elsewhere in town were never placed in front of a shop with similar merchandise.
I am an unabashed supporter of the chamber, but if what you describe happened, then maybe the street vendor policy is due a fresh look? Maybe it’s something you can help with when the chamber begins to consider its vendor locations for Summer Nights?
Yes Steve it happened! I was appalled at the attitude of the to allow this to happen. Than again a few years back there were 3 hat vendors in front of The Hat Store during Victorian Christmas.
The GVDA board should circle the wagons and re-think these proposed changes soon! This proposed policy will stimulate “ill-will” and hurt the downtown. Changing the market(post Ray Diggins) needs to be handled carefully. Our downtown(GV & NC) business districts are one of the most valuable community assets we have, and they are the perfect venue for “community” events. Peter V., Tom G., and Steve E. and others make great points on why the market should continue including community groups.
woops – posted under wrong thread – re-posted!
Glad to see Ray Diggins’ name finally came up in this thread. Methinks it’s also part of the subtext of the dissent: Folks who liked it Ray’s way.
Ray had reached the end of his time managing the market. His passion and commitment will be hard to match. He did the job, because he loved it – and it showed. The market needs some new ideas and energy. Knocking out our eclectic community groups is a step backwards. Bring on more local based food, vendors and entertainment – there is plenty of room for improvement and new ideas.
I have mixed emotions about nonprofits versus for profits. Muhammad Yunus suggests the concept of social businesses. This is where corporations seek public benefit instead of profit. Their mission statements contain a purpose of social benefit. Employees are proud to work in these businesses and play an active role in managing profits for the good of all. This can be a most effective model.
Nonprofits are paid with donations, to produce a specific result, by those who are unwilling or unable to do this themselves. There is an incentive for nonprofits to “show” results in order to attract donations. The essential caring connection to those being helped often becomes distorted as a consequence. Charity Navigator will not show problem.
Greg I agree with you that social businesses, or public benefit corporations, are a good alternative.
But your statement “nonprofits are paid with donations, to produce a specific result, by those who are unwilling or unable to do this themselves” show both an appalling lack of knowledge about the breadth and diversity of the nonprofit community and a stereotypical prejudice akin to the critic of education who says, “those who can, do, those who can’t, teach”.
Hi Steve,
The statement seems reasonable to me. Would you explain why you disagree? How would you disagree or agree with the rest of the statement about nonprofits tending to decline over time?
I think I am misunderstanding your statements Greg. If so, I stand corrected.
First, I think it is important to define what a nonprofit organization is. It is a corporation, just like a private sector corporation, but its surplus revenues are dedicated to a public or mutual benefit rather than being redistributed to shareholders. There are many types of nonprofit organization ranging between the traditional charity (I give the committee to end hunger $5 and they buy and distribute food) to religious organizations (I donate to maintain my church) to homeowners associations (I give money, they buy services). Nonprofit corporations operate for purposes that are religious, artistic, literary, charitable, scientific, educational and in the interest of public safety.
If what you meant was that people use nonprofits to provide a service because they can’t provide that service themselves you are absolutely correct.
There is a very diverse set of economic models within the nonprofit community. Some are funded by donations, but many nonprofits earn their income by providing a service, managing endowments, or selling products, etc. One problem nonprofits face is that private sector business models are understood more easily because we are used to the shorthand–when someone says a business gains equity by investing in a company everyone understands what that means–there is no commonly understood shorthand for nonprofits.
Here is a nice article from the Stanford Social Innovation Review explaining some of the other models:
http://www.ssireview.org/articles/entry/ten_nonprofit_funding_models/
Second, I think the observation that nonprofits ‘decline over time’ begs the question, “compared to what?”
Our review of nonprofits in Nevada County did indeed show that many nonprofits are either dormant or very low functioning–with revenue below $25K per year–but a similar review of private sector corporations would likely show similar results. One can simply go to the California Secretary of State’s web site where both nonprofit and private corporations are required to register to see a pretty good example of the fact that private sector corporations also fail or decline over time. Only a certain percentage of start up businesses are going to survive and the ground is littered with good and bad ideas that never got off the ground. So I guess that ‘non-profits decline over time’ is true aggregately, just like saying business fails all the time is true. I can’t think of a single business still operating since the Roman Empire, does that mean ‘all businesses fail”.
Even though you may be agreeing, I don’t think we are connecting on what I said, Steve. I am not talking about the process of long term stagnation but the forces in general within the nonprofit culture that compromises their effectiveness. In the typical nonprofit the delivered product is the perception that a positive difference is resulting and the donor is the purchaser of the product. I’ve seen this relationship carried to the extreme in Pakistan with “nonprofits” renting buildings to set up “Ghost Schools” for a photo op to lure in the donations. More or less, though, the same type of structure distorts the creativity and commitment within any donation based nonprofit.
For this reason I’ve chosen to avoid donations in the nonprofits I run at this point. We may not be successful according to a financial analysis but we are wildly successful on the ground where it counts.
I am 100% committed to developing this alternative model, where there are only participants instead of donors, and I hope to prove this approach enough for it to become the preferred approach. Social businesses are a version of this model.
Greg, I think you’re right, we may not be connecting, but I’m not sure why.
I agree with you that dependence upon donations, and thus dependence on the vision of the donor, is not a good model. SBC is essentially set up as a social business–we provide services that meet our mission, the mission test is rigorously enforced, the mission is operationalized through a strategic plan and a business plan, we engage stakeholders in implementing the projects that deliver the services, more than 75% of our revenue is fee based rather than donor based, we measure performance against a set of outcomes we hope to achieve, and adaptively manage which projects we pick if we fail to meet outcomes–SBC is essentially a not for profit business with a social mission.
I think we are both engaged in the same quest to change the nonprofit culture, merely working in different geographies with different missions.
Well, good.
It is important to not fall into the trap of evaluating nonprofits by how many they employ or how efficient their delivery system is.
I posted the link above, but here are the quotes in the Union article to which I was referring.
“According to Nevada County’s Center for Nonprofit Leadership, those 154 upper-echelon nonprofits have a collective budget of $75 million each year and spend $34 million in salaries and benefits to employ at least 600 people.”
“Combined, those nonprofits would form the third largest employer in the county, behind the county government and Sierra Nevada Memorial Hospital, which has its own nonprofit — one of the largest around.
Combined, those nonprofits would form the third largest employer in the county, behind the county government and Sierra Nevada Memorial Hospital, which has its own nonprofit — one of the largest around.”
Oops! Sorry for the glitch there.
Not only do I not read an anti-business bias in Tom Grundy’s remarks here, I have worked with Tom for a few years across the table from him in several non-profits and I’ve not seen any such bias there either, or among others in those groups for that matter.
In fact, I was about to commend Tom for offering comments here that conform most closely to my personal experience with local non-profits. First of all, he points out, in so many words, that it’s not possible to paint all local non-profits with the same brush. The testimony here in this thread as to the good the bad should make that obvious.
In contrast to Jeff’s repeated reference to an attitude of “entitlement” among members of some non-profits, Tom properly reminds us that “we actually have jobs, and many are middle-class-retired from jobs, in other fields not related to the mission of the nonprofit.”
Amen to that. The most severe criticism I’ve heard of local non-profits (until reading the threads in this blog) came from local conservative bloggers, who often complain that local non-profits “kick back and live off of grant money.” I suppose in their view the taxpayers are the makers and the non-profits are the takers. That myth is completely at odds with my own experience.
Most non-profit volunteers I’ve met work full-time at jobs unrelated to their volunteer work, give many hours every week (sometimes in very strenuous labor) over and above their jobs because they feel passionately about saving a local watershed, for instance, or supporting more businesslike development in our community.
In my experience, the most dedicated and selfless and public-spirited citizens in our community are precisely the passionate and unpaid volunteers for those local non-profits that are running more on volunteer labor than on grant money.
Thanks Don, but with all due respect, your experience is based on your “like minded” pursuits with Tom and some of the others who have commented on these threads: In short, “like minded” people agreeing with and rallying around each other. By coincidence or not, it’s a CLAIM GV reunion. Nobody’s holding the Democratic Central Committee leadership responsible for firing off a nasty email, either. They’re just defending an ideology. That’s fine, but I’d be more interested if you and others actually contacted the GVDA, its board and listen to their perspective. In fact, I’m surprised that no one did before speaking out. Go to a GVDA merchant meeting and hear their perspective on this market. Find out why many don’t think it’s been working. In short, I’m challenging you to break bread with some “unlike-minded” people and see what you can come up with.
Curious whether the NC merchants have expressed any disenchantment with the NC Sat. Grower’s Market. Anybody in a position to know?
As a nonprofit participant with Little World Community Organization I can attest that NC Farmer’s Market run’s a tight ship and it is good. I am allowed to participate two times a year in a limited number of spaces. This makes for a more diverse and not overwhelming level of nonprofit participation.
I am expected to show up on time with the other commercial vendors. Once I was a little late and that was clearly not appreciated, and I was sorry.
My informal poll of the business people I know in town yields mixed revues. Some merchants welcome the farmer’s market and the street fairs while others resent them see them as competition.
It probably has something to do with the kind of business one is in.
This whole discussion is about ‘like minded pursuits’ on both sides. Perhaps the GVDA could have communicated better why they made the changes? In the end they will reap what they sow.
I want to be 100% clear that nothing in any of my posts is intended to address the issues of the GVDA and its decision to limit nonprofit participation. My comments are directed solely at the larger issues of nonprofit management practices and business models.