Nonprofit Groups Must Go Lean to Make Best Use of Money
March 7, 2009, Democrat and Chronicle -- Donors increasingly tell me they feel there are too many nonprofits and too much duplication and inefficiency in the service delivery system.
Non-profit staff and volunteers may take offense and argue the point, but it's an ever growing perception, and perception defines reality.
It's time that nonprofits face the fact that they need to do business very differently.
United Way stands ready to help. We've established a special "synergy fund" that covers the cost of providing technical assistance for agencies that want to consolidate programs or merge operations.
We'll also provide a special grant once a merger is completed. Some people have told me they feel the synergy fund drains dollars that otherwise could go to existing programs. This is not about supporting "existing" programs. It's about supporting programs offered by agencies willing to do business differently.
Particularly during these challenging times, every nonprofit needs board members who are knowledgeable, willing to be advocates, willing to give of their own resources and willing to enlist others to the cause.
These are good characteristics. But when board members' loyalty to an agency blinds them to the fact that services are not being delivered as effectively or efficiently as they could be, that's not good.
Volunteers can't be barriers to a nonprofit that wants to consolidate programs. Volunteers don't "own" the agency. Their role is to be good stewards of the dollars entrusted to the agency and to ensure that the services are there for the people who need them — regardless of whether "their" agency is delivering those services.
Take the case of the YWCA. Three years ago, the YW took a hard look at itself. It examined the service programs it was offering women and children, and then identified other providers in the community providing the same or similar services. The result: The YW discontinued about a dozen programs and reduced staff and administrative expense. Now leaner, the agency is stronger and more focused. The YW recognized that other agencies might not deliver the programs in the exactly the same way they had delivered them. But they also had the intellectual honesty to admit that those differences meant more to the staff then they meant to the consumer. Other nonprofits need to follow the YW's leadership example.
They need to define their core competencies and have the courage to shed programs.
The agencies that look for ways to deliver services more collaboratively — or discontinue some services entirely — are the ones that will emerge from this current crisis in a position of strength. Time will tell which agencies chose to seize the opportunity.
Carpino is CEO of the United Way of Greater Rochester.