This is the time of year when most people think about giving to their favorite nonprofit. So how is the nonprofit sector doing, and what are some common challenges for nonprofits in Rhode Island? For one, the sector continues to grow. Rhode Island organizations designated as public charities, excluding religious institutions, number 3,286. That’s up from 1,888 in 2005 and 1,442 in 2000. Nonprofits, including the hospitals and universities, employ 18 percent of Rhode Islanders and it is estimated that $8 billion in revenue is generated by nonprofit organizations. But the sustainability of the sector is fragile. Public funding through federal, state and local government is eroding. It is harder and harder for Rhode Island nonprofits to garner support from corporate donors. It seems counter-intuitive that the sector is growing in numbers while funding is shrinking, but that is the case.
With all the growth and competition for dollars facing local nonprofits, how can they be successful? My recommendation is to follow these steps: lead, collaborate, evaluate, repeat.
By lead, I mean that nonprofits must invest in their current and future leaders to ensure that top talent is attracted to and retained by the sector. Every level of an organization must be actively involved in leadership development and professional growth.
Nonprofits must collaborate in ways that make sense. Nonprofit leaders should know the players in their field and find new ways to work more efficiently and effectively. Complicated social problems require complex solutions and collaboration is a tool for finding new and better social solutions.
Nonprofits all strive for the common good, but they should all be asking if or how they are making a difference. Evaluate the work; know how to define success and know when you need to change course. Evaluation doesn’t need to be a fancy or expensive undertaking, but every nonprofit should know what works and what doesn’t.
Once an organization invests in leaders, finds new ways to collaborate, and builds a system to evaluate their work, the cycle should be repeated. Successful programs will up the ante for leaders, who then may need to find new partners.
Nonprofits also depend on the generosity of individuals, but gifts can take many forms and service to a nonprofit can be as valuable as a large donation. I’d like to dispel some myths that I have heard about board service:
• Myth No. 1: Only rich or well-connected people can be on a nonprofit board.
In fact, most nonprofit boards are comprised of people who are not in the 1 percent. What all board members must be, however, is passionate about the mission and services of their organization. There are thousands of nonprofits in Rhode Island and they are actively recruiting new board members on a regular basis. So if you love a local nonprofit or have the desire to give back to the community, find an organization that excites you and that you believe in. If possible, volunteer to make sure that you are a good fit for the organization and that the organization is doing the kind of work that you can champion.
• Myth No. 2: If you join a nonprofit board, the only thing you really have to give is your time.
This is a dangerous myth, because it places a nonprofit in fiscal jeopardy. Every board member must make a personal donation to the organization, based on their individual ability to give. Think about it: if a nonprofit is seeking donations or grants and their own board doesn’t financially support the organization, then why should anyone else? Not only must every board member make a donation, but every board member is responsible for the sustainability of the mission. That means that every board member must be involved with fund development, in some way.
• Myth No. 3: All boards require many years or even decades of service.
It’s true that in a recent survey of Rhode Island nonprofits, we learned that 27 percent of nonprofit boards do not have term limits. So maybe for those organizations, board service actually does require a decade or two of commitment!
Most nonprofits have a good flow of board members rotating on and off the board, with the average term limit being three years.
So this season, find ways to contribute – your time, talent and treasure are assets that will make our nonprofits strong and better able to meet their missions for all Rhode Islanders. •
Jill Pfitzenmayer is vice president of the Initiative for Nonprofit Excellence at The Rhode Island Foundation.