Our Nonprofits Are Too Good to Fail

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Editor’s note: A version of this op ed appeared in today’s Times-Picayune.  That’s why the piece is written in the first-person serious.  Feel free to use it as your own, without attribution.

While the feds were bailing out large investment banks on Wall Street, our local nonprofit organizations were having a financial crisis of their own.  The great majority of them operate on shoestring budgets.  They feed the hungry, house the homeless, and heal the sick with the limited resources they’re able to scrape together from individual and institutional donors.  Raising enough money to keep the lights on is a never-ending task.  A recent survey of our community’s not-for-profit organizations (available at the Greater New Orleans Foundations website, www.gnof.org) revealed that almost 59 percent received less than a quarter of their revenues from public sources, and an even larger number received 25 percent or less of their funding from foundations.  Close to half of all survey respondents had three months or less of operating reserves, making their financial situation precarious, to say the least.

In sharp contrast with this gloomy picture of their financial health are the myriad contributions these organizations make to the well-being of our city and our region.  Across the US, nonprofit organizations are responsible for 12.9 million jobs, or approximately 9.7 percent of the country’s workforce.  Every dollar granted to a charity or charitable program produces $8 in direct economic benefits—this according to a 2011 study by The Philanthropic Collaborative titled Creating Jobs and Building Communities.

Beyond their contributions to our region’s economy is the important work they do in keeping us bound together as a community.  They provide avenues for the wealthy to work shoulder to shoulder with the poor to improve our city; they help us bridge the racial, ethnic, and class differences that so often divide us.  The many organizations in our region devoted to the arts and culture help preserve the very special character of New Orleans and its people.

We ignore the health of these organizations at our peril.

This is not a time of great prosperity for many of us.  When times are hard, we need to ask what’s most important to us, our families, and our communities.  We should consider what our community would look like—what it would feel like—without the thousands of nonprofit workers who dedicate long hours on short pay to make this a better place for all.  Consider what New Orleans would be like without its homeless shelters, without its food pantries, its hospitals and schools, its afterschool programs, its museums, and its parades.

As we better understand our priorities as a society, the many contributions that our nonprofits make to our region should move us to contribute more to them, not less, during this giving season.  Our community’s charities are just too good and too important to fail.

 

Comments

[Elizabeth Castillo]

Bravo Albert! Thanks for keeping the issues so clear and understandable.

I'm struck by the contrast between your thoughts and a recent article in the Winter 2012 Stanford Social Innovation Review ("Social Impact Markets: Why A Market for Social Innovation is Needed Now More Than Ever").

That author advocates for competition and market dynamics to winnow out organizations that are not delivering sufficient innovation and impact. His basic message is that low performing organizations are not worthy of philanthropic investment.

The unsurfaced assumption that doesn't get voiced is that it's ok for nonprofits to go out of business. While this may be true for a few, this philosophy could easily lead to the demise of safety net services in a community. It would be interesting to see computer modeling of the long-term impact of his investment strategy.

On a positive note, I do agree with his recognition of non-financial resources as a valuable and overlooked source of support,and I appreciate the work he is doing there.

Keep up the great work Albert! We greatly appreciate your perspectives and your time and energy spent sharing them with your sector peers. They enrich our thinking and actions.

[Albert]

Thanks, Elizabeth. I worry also about the excessive focus on innovation. We know how to end homelessness, for example; we just don't want to pay for it.

[Almost Isn’t Good Enough]

Thanks, Elizabeth. I worry also about the excessive focus on innovation. We know how to end homelessness, for example; we just don't want to pay for it.

[raising money]

good color your site nice posting i like this blog.

[fundraising]

Thanks, Elizabeth. I worry also about the excessive focus on innovation. We know how to end homelessness, for example; we just don't want to pay for it.