The Rundown - June 17, 2022
The latest news and notes from the nonprofit and philanthropic sectors.
The Rundown - Heat Wave Edition
It’s been a scorcher here in Ohio! Over the past few days, we have been under Excessive Heat Warnings from the National Weather Service as the temperature was 93 on Wednesday and 96 on Tuesday. The heat index hovered near 110. We have had heat before, but this heat wave feels a little off for mid June. It almost makes we wish we had a “Radi Aid” group that did things in reverse. Huh? Check this out…
The View from Above
The website Second Wave Michigan ran this piece introducing the new President and CEO of the Michigan Nonprofit Association, Kelley Kuhn to their readers. Kelley has a long history of supporting nonprofits in Michigan and has been with the Michigan Nonprofit Association for a few years.
I personally thought this interview was enlightening because it really articulated some of the challenges and opportunities the sector is facing from the tumult of the pandemic to just getting individuals more aware of the sector. I especially found these answers very insightful:
The last two years have drastically changed the way many nonprofits operate. As we move into a new normal, what things are organizations carrying forward, and what are they leaving behind?
Many nonprofits are not going back to offices. They're centering the needs of their people first, and realizing they want flexibility and a work-life balance. In an already under-resourced sector, that can be a real positive. How amazing would it be to not pay rent and other overhead expenses? Some nonprofits do, however, need that physical space. Our data tells us most are moving to a hybrid model. But we may continue to see an interesting shift in operational structures, and in people feeling like they don't have to be inside an office to be effective, and to create change.
The Great Resignation is rippling through the nonprofit sector. People are no longer able to say they're “mission-driven” when they can't make a living wage, afford childcare or attend any of their kid's soccer games. In response, some nonprofits are making permanent changes to invest in their people. This is the very best investment, because when your people are supported, and feel they belong, they pour into the mission. Mental health is also going to continue to be a huge issue. Nonprofit staff are carrying not only the burden of working in the capacity they do, but also the burdens of those they're serving, and the hardships they may be facing. We have to ensure that we've got the right benefits for people, including flexibility in the work schedule, and support services around employees’ mental, physical and spiritual well-being.When we spoke last summer, you wondered if, through the pandemic, we'd see an increased awareness of the vital role nonprofits play in communities? Has that happened?
I often use this example: If your house catches on fire, the police and fire department arrive to put it out. That's government. You pay tax dollars for those services to exist. But what happens when you don't have a house to go back to? It's a nonprofit who provides you a place to stay, food and clothing, should you need it. When the pandemic hit, and people were no longer employed, it was your local nonprofit who mobilized working with your schools to make sure breakfasts and lunches went out, and there are hundreds of other examples that speak to the important ways nonprofits have responded to the needs of community during the pandemic. Nonprofits come and fill all these spaces naturally.
Perhaps by their nature, nonprofits aren’t ones to pat themselves on the back or put the focus on themselves. The work that is being done in this sector each and everyday requires nonprofits to not only play an active role in achieving goals and objectives, but these groups are also conveners; nonprofits bring a diverse set of people, resources and processes together to solve tough problems, often on the individual level. And nonprofits do this work, usually quietly and diligently.
Kelley did a wonderful job of showing how critical nonprofit organizations are to any size community, large or small. We can all be grateful that there are individuals and organizations that are willing to improve our quality of life. Kelley also did a wonderful job of articulating how the curve balls of the last few years are providing some significant challenges to our sector.
It’s no secret that this sector is not a place to earn a lot of money, so leaders of nonprofits need to be more flexible with working their staffs to ensure that a good and positive work environment exists where people can thrive to be the best versions of themselves everyday.
Thanks Kelley for being a strong advocate of our sector!
Busting the Mythical World of Nonprofits!
The Stanford Social Innovation Review recently ran an excerpt from the book, The Business of Non-Profiting by Amy Fass. Amy is a proud alum of Stanford and is the current President and CEO of the California-based nonprofit Shoes That Fit.
In the piece, Fass argues that there are two myths that nonprofits run into all the time as they operate. The first myth is that nonprofits should not make a profit. Fass not only argues that nonprofits should make a profit; the “nonprofit” moniker is nothing more than an IRS designation. Fass doubles down on her argument and says that nonprofits have no only make the fiscal bottom line work out, nonprofits have other bottom lines to manage as well.
Not only does a nonprofit need to have healthy financials to survive (and to receive funding), it needs to create a SOCIAL BENEFIT to society, as well. It is in effect running two businesses. I would argue that thriving nonprofits are some of the best-run businesses around since they have to thrive in not one, but two arenas. In fact, I would argue that many for-profit businesses could learn a great deal from nonprofits.
A second myth that Fass tries to fight back against is the thought process that says having low overhead is a good metric for a nonprofit’s effectiveness. Often for the nonprofit director, this is the bane of their existence as they go out and hustle for money from funders. I have always found it interesting (perhaps ironic) that foundations and funders, that are nonprofits themselves, are the only ones that have asked me about our nonprofits’ overhead. I have never had a donor ask me what our overhead rate is.
And let’s face it, overhead is a very nebulous term. What exactly is overhead? Is it wages and benefits? Is it wages and benefits of front line staff? Is it wages and benefits of administrative staff? Funders do realize that if our front line staff didn’t do the jobs we asked them to do, our organizations could not meet the goals and objectives others are help funding, right? In a round about way I am saying that wages and salaries aren’t overhead.
Fass explains it this way:
For nonprofits, the “customers” we work with cannot pay for our services. So we have to run what NPFF calls a “subsidy” business to cover our costs. Components of a subsidy business can include fundraising, in-kind contributions, investment income, earned income ventures, and “sweat equity” through reliance on volunteers and (much too often) underpaid staff. Because we are not catering to paying customers, we always need third parties to fund social enterprises; “self-sufficiency” is another myth.
To grow an organization’s impact and expand its reach, nonprofits need “profits” so they can invest in their own work, improve their infrastructure, and take calculated risks. You will never grow your organization if you cannot make investments in it. Breaking even is never enough.
But the goal of the nonprofit is what is so different from traditional business. We need to make money in order to grow the organization SO WE CAN CREATE A SOCIAL BENEFIT! No one is profiting off the income; it is ultimately invested into the good of the organization.
A Quick Note of Thanks!
Thank you all for subscribing to this newsletter. The subscription numbers continue to grow and from what I am learning, this side job seems like it has “sticking power”. I am not getting inquiries and calls from literally all over the world wanting to partner and work together to create value for you, the non profit and philanthropy leader. I feel very excited about the future of this newsletter and if you have any ideas or comments, please feel free to share them with me at pinnaclestrategiesltd@gmail.com
I know many of you have shared this with your friends and colleagues and I am very grateful. Thank you! If you haven’t shared it yet…..well, here is your chance….
Ready to Learn Something New?
Spring is a wonderful time to visit Indianapolis and it opens a perfect opportunity to sharpen your skills and meet new professionals in the field. I would encourage you to look at some of the offerings of The Fund Raising School at the Lilly School of Philanthropy at Indiana University’s campus in Indianapolis. The professional development school has great programming both on-line and in-person both in Indianapolis and at other sites across the country. Take a look at their course offerings here!
Other Ways to Connect
Our coaching practice has openings starting here in 2022. If you are interested in working with me to get your nonprofit organization on a track to achieve the big missions you have for your organization, please reach out to me at pinnaclestrategiesltd@gmail.com.
Here are some other ways you can keep in contact with Pinnacle Strategies!
Check us out on our LinkedIn Page
Check us out on the Celebrating Leadership Facebook Page.
Want to help support this newsletter?
I hope you have found value in this newsletter. If you have found it valuable and want to help, the best thing you can do is “hit the heart”! By liking this post, you help other people interact with it. Also, sharing and commenting is very helpful as well. Thank you!